I have never explicitly used this technique, but I have certainly examined problems, systems, and opportunities from all the perspectives contained within it. This is true of many techniques described in the BABOK. I often note that every formalized technique or analytical framework is just an organized way of getting you to do what you should be doing anyway, if you were particularly experienced, creative, or thorough. I further frequently note that all described techniques can be and are criticized. While these techniques can inform and clarify the thinking of an experienced practitioner, less experienced practitioners have to start somewhere, and this is an interesting technique for directing analysis to many important considerations.
As someone who has studied economics for much of my life, and especially in the last two decades, I appreciate that economics is the study of choices made under conditions of scarcity and that, contrary to many people’s impressions, those choices do not always involve money. It may be similarly tempting to evaluate all business (or organizational more generally) activities in terms of money, but the balanced scorecard techniques forces the analyst to look at other areas. A monetary value can be placed on every activity, sure, but you have to drill down through any layers of cause and effect to see what they might be.
The balanced scorecard explores a business or system across four dimensions:
- Financial: Inspiring analysts for look at considerations other than finance does not mean that it doesn’t need to be considered. After all, if an organization or a process continually loses money, it won’t be around for long. (Accounting, by the way, along with the recognition that one of the three functions of money is to serve as a unit of account, is one of thee great discoveries of humankind.)
- Learning and Growth: This encompasses employee training, corporate culture, and all manner of innovation and improvement. It can even involve training the customers. Improvements in financial performance can result in tracing back through all activities to see how the effect the ending outcomes.
- Business Process: This involves measuring the performance of people and processes internally, and customer satisfaction externally.
- Customer: This dimension focuses of the customers’ needs and satisfaction.
There is some overlap between those ares, but the point is to get analysts to focus on each area, specifically.
Analysis of each of those dimensions involves:
- Objectives: What is the organization trying to accomplish?
- Measures: How can the organization determine whether it is succeeding?
- Targets: These must be expressed in terms of things that can be measured (in theory). TQM defines “quality” as adherence to requirements (i.e., a result either meets defined standards or it does not.). This attempts to turn continuum problems into discrete (yes/no, pass/fail) problems.
- Initiatives: What activities will the organization take to improve or maximize performance within each dimension?
It may helpful to construct a table, but since multiple objectives, measures, targets, and initiative can be defined for each dimension, that’s probably overkill.
Again, this isn’t a method I’ve ever explicitly used. As the BABOK notes, it does not take the place of other types of absolutely necessary forms of analysis. I believe it’s main utility is to inspire analysts to consider things from different points of view.
I once had the insight that most of the stuff in the training materials for my Scrum certifications was kind of beside the point, but that flipping through the three slim notebooks of course notes one morning every couple of weeks might help keep some ideas fresh in my mind. Reviewing the list of fifty BABOK techniques may serve a similar purpose.