More and more these days as I visit project management offices across the country, I end up talking about scorecarding and balanced scorecarding. These terms are part of a popular trend in management at the moment which is based on the simplest of management principles. Scorecarding refers to simply setting goals for certain results in the business and then tracking those results on a regular basis. (See? I told you it was simple). The notion of balanced scorecarding carries the notion one step further to include four related categories with the corporate vision into a single scorecard.
The scores for such a process come in two flavors. The first are subjective scores. A manager might be asked, for example, to rate on a scale of 1 to 10 the degree of alignment of his current project with corporate objectives. The second type is objective, something us project management types are much more comfortable with. An objective measure is something that comes from hard data. For example, this task finished 10% later than planned.
The process of scorecarding is of itself remarkably productive. The simple act of looking at an objective and determining the degree of completion with that objective establishes a natural structural tension between where you are and where you want to be. It also keeps the staff focused on what is important by continually bringing them back to the objectives being measured. This type of thinking is, of course, no surprise to project managers. Tracking results against a plan is the very core of project management thinking. What is interesting, I think, is that this kind of thinking is now extending into every aspect of an organization and the objectives being measured now extend well beyond a list of tasks in a project to encompass almost every aspect of the organization.
To, I am sure, no one’s surprise, these processes have been automated into a range of products and customized software which target the scorecard entry and the display of results across the enterprise with view to providing management with advanced indicators of what is working and what is not. Moreover, these systems are able to standardize the entry of data and the speed at which it is entered. Reports for virtually everyone in the process from the lowest to highest employee give instant feedback on where you stand with the objectives you had, what your score is in different areas and how it compares to previous periods.
So, what does this have to do with enterprise systems? Well, there’s not much one can do about automating the subjective scores, they’ll always have to be entered by hand but the objective scores is another matter altogether. Implementers of scorecarding systems look with a hungry eye to centralized data systems such as the corporate ERP or HR systems. The data in these systems provide great sources of information that can establish without argument the score for a particular category. The movement towards enterprise project management systems is now providing a new and exciting source of metrics which can deliver automatic results to the scorecard system.
As interesting as all this is, there is something else to consider in a scorecard or balanced scorecard environment and that is what you should be scoring. Choosing the metrics which represent the elements of the organization which most affect results takes the eye of an experienced expert. So move forward with an open eye when you’re looking to keeping the right score.