BSC indicators serve as measurement targets, they allow to evaluate the quality of the company's progress towards the implementation of the development strategy. They can be defined only in the case of clearly defined limits. Selecting the appropriate parameters is a secondary task, since if the goals are incorrectly formulated, the company will not achieve success, even if the indicators are well suited to them. It is recommended to use two or three characteristics for each setting.
Without target values, such balanced scorecard tools as management indicators lose their meaning. The difficulty of defining them is increased by the fact that it is difficult to designate a level that will be realistically achievable.
Selection of indicators of the degree of achievement of strategic goals
Usually, a balanced scorecard ios database is developed for a period that coincides with the long-term planning period, i.e. 3–5 years. Target values for such a period of time are determined for the data that characterize the final results of the corporate strategy. It is necessary to set these limits for the medium-term period of 12 months for leading indicators that can change in a short period, because the strategy is implemented in the current year as well. The data system becomes balanced in relation to the time frame for achieving results.
Short-term plans are broken down into time periods (quarters, months, weeks, days) and their content can be reflected in the form of planned values. Indicators and their target limits are used to manage activities. The actual results obtained are compared with those planned, and if there are deviations of the current situation from the adopted settings, this becomes a signal for action.
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In order to move along the planned development path, it is necessary to implement the corresponding long-term measures. This is the name for all projects, programs, initiatives and other actions that serve to achieve certain strategic goals.
By distributing the organization's projects according to the goals of the balanced system, it is possible to understand the degree of contribution of each of them to the process of achieving long-term goals.
If it does not contribute anything to their accomplishment, it is necessary to determine whether its results are reflected in the fulfillment of the basic indicators. If here too it is not possible to determine a significant contribution, then this project does not need to be implemented.