Scorecards present Key Performance Indicators (KPI’s) that the company/department deems is appropriate to gauge success at achieving strategic goals. These reports are metric centric. As a general rule, KPI’s provide information which gives the reader a quick glance of success from a financial, operational, and risk perspective. A successful scorecard will assist the company drive profitability, reduce costs and provide insight into risk.
Qualities of the basic scorecard include –
- Simple, intuitive and easy to read
- Department/business specific metrics – metrics impacted by team activities.
- Tolerance ranges displayed and highlighted when breached
- Nine to twelve key metrics to grade performance
- Benchmarking to gauge how the company’s performance measures up to its competitors and peers (external data).
How to start – Identify nine important activities the team accomplishes, that contribute to the strategic objectives or compliance obligations of your business. Build metrics that measure activity success.
Note – data presented rates how the company is faring based on established targets, i.e. based on your annual plan. This type of report does not do a good job at presenting trend data.
What is your experience?© Copyright 2012 Regis Quirin, All rights Reserved. Written For: CFO Tips - What you need to know, to be a CFO TODAY!