Elements

A Balanced Scorecard system is comprised of the following elements:

Perspective: Perspectives are the various viewpoints from which it is possible to consider the modeled connections. Usually there are four perspectives. However, the number of perspectives can vary depending on the business requirements.

Scorecard: Scorecards assist in monitoring the success achieved in making the overall strategy a reality. They encompass both current and planned key figures, as well as initiatives that are tied to objectives, and therefore also to strategies.

Strategy: A strategy is the top element of a scorecard. It is a part of the overallenterprise strategy, which is divided into sub-strategies for the sake of modeling.

Strategy category: Strategy categories are a means of classifying the defined strategies into groups. The basis is a one to many relationship: one strategy category groups together multiple strategies. Strategy categories help a user keep an overview when modeling. Objective: An objective describes a strategic goal within the framework of a perspective. Objectives are joined together into an overall strategy by means of cause-effect chains. The extent to which objectives are reached is determined by comparing the actual and planned values of the key figures that are assigned to the objective. Initiative: Initiatives are a set of activities that share the realization of one or more objectives as their purpose. A responsible person, a timeframe, and specific resources are allocated to each initiative.

Key figure: Key figures assist in measuring the degree to which the strategy has been put into effect. They are assigned to objectives and also receive a status thatallows a qualitative pronouncement to be made on the current value of the key figure as compared with the plan value (unsatisfactory, satisfactory, good, excellent, and so on). In addition, a firm may organize the key figures in a Value

Driver Tree (see section 5.2.3.2).

Risk: Risk can be seen as a completing factor to the other elements. There is the option of assigning risk to the key figures of a Balanced Scorecard and of quantifying the effects of key figures on risk. This opens up the possibility of integrated management of opportunities and risks. Certain companies have a legal obligation to set up a risk management system (see section 2.5), and these are thereby assisted to that end. Along with its verbal definition, a risk receives any number of value fields for a comprehensive and qualitative description of the risk situation.