Scorecard and Other Performance/Cost Management Tools
Scorecards are not used in isolation as a management tool for strategy or for control purposes. They do work well in conjunction with other performance/cost management tools. The SHAPs study reviewed the use of other management tools in conjunction with scorecards. Respondents were asked to identify if they were using other performance and cost management tools and if so, how effective the tools were in helping them to achieving their vision/goals. The list of tools included:
Benchmarking
Target costing
Pay for performance
Six sigma (6 Sigma)
Reengineering
Performance measurement
Materials resource planning (MRP)
Activity‐based costing (ABC)
Just‐in‐time manufacturing (JIT)
Total quality management (TQM)
Theory of constraints (TOC)
Budgeting
Breakeven analysis (BE Analysis)
Scorecard system (Scorecards)
Strategic planning
Strategic alliances
Economic profit (EP)1
Enterprise resource planning (ERP)
Variance analysis
Standard cost accounting system (Standard Costing)
Resource consumption accounting
It was observed that the Best Practice group, in almost every instance, use these management tools in combination with scorecards and receive greater value than the NSBG Adopters (those who report no significant benefits from their scorecard system) using the same tools (see Exhibit 8.10 ).
Exhibit 8.10: Best Practices versus Adopter Reporting No Benefits from Scorecards
The SHAPs study looked at effective scorecard Adopters, those who were receiving ...
Get Scorecard Best Practices now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
