Oracle Enterprise Performance Management - The CIO's Guide to Oracle Products and Solutions - page 98

developed software does not sufficiently contribute to results as expressed
by the other (e.g., financial) performance measures.
So, how does a company adopt a successful scorecard approach?
According to Kaplan (2001 pp. 72-78):
Each organization we studied did it a different way, but you could see that,
first, they all had strong leadership from the top. Second, they translated
their strategy into a balanced scorecard. Third, they cascaded the high-
level strategy down to the operating business units and the support depart-
ments. Fourth, they were able to make strategy everybody's everyday job,
and to reinforce that by setting up personal goals and objectives and then
linking variable compensation to the achievement of those target objec-
tives. Finally, they integrated the balanced scorecard into the organiza-
tion's processes, built it into the planning and budgeting process, and
developed new reporting frameworks as well as a new structure for the
management meeting.
The key, then, is to develop a scorecard that naturally builds in cause-
and-effect relationships, includes sufficient performance drives and,
finally, provides a linkage to appropriate financial measures. At the very
lowest level, a discrete software system can be evaluated using balanced
scorecard. The key, here, is the connectivity between the system and the
objectives of the organization as a whole.
Developing Benchmarks
The central component of any scorecard is benchmarking. Merriam
Webster's online dictionary definition of benchmark is: “A point of refer-
ence from which measurements may be made.” It is something that serves
as a standard by which others may be measured.
The purpose of benchmarking is to assist in the performance improve-
ment process. Specifically, benchmarking can:
1. Identify opportunities
2. Set realistic but aggressive goals
3. Challenge internal paradigms on what is possible
4. Understand methods for improved processes
5. Uncover strengths within your organization
6. Learn from the leaders' experiences
7. Better prioritize and allocate resources