What Balanced Scorecard software is available and how do I choose?
For a more detailed listing see the Software Database on this website.
In 100 Words
The key thing is to be clear on:
- your own reasons for using the Balanced Scorecard tool and/or needing strategy management software;
- the extent of your need - single or multiple scorecards? One or many locations?
- data collection and reporting needs;
- existing IT infrastructure and licenses held,
before deciding on or even considering software. There are currently about twenty different software packages available that are sold specifically to support the reporting of Balanced Scorecard data. This doesn’t include general-purpose software (e.g. spreadsheets such as MS Excel, or Groupware, such as Lotus Notes). Establishing what (if any) software is best for a given circumstance is difficult. Most single Balanced Scorecards can be managed using Excel or similar office tools.
It is also important to be aware of what software does NOT do - it is not a substitute for the work needed by your own managers - to agree content and when and how to report and review performance and to continually input data into the chosen reporting tool. Balanced Scorecard is not primarily an IT project - it is a management discipline with associated processes.
Introduction and ‘Caveat Emptor’ - Buyer Beware
This FAQ does not provide a categorical answer to whether you should or should not invest in specialist software nor recommend a particular solution as these are questions of specifics for your organisation; rather it describes features and factors that should be considered, and attempts to give some examples of the software that is available.
The aim of a Balanced Scorecard is to provide simple, relevant and concise reporting of the performance of an organisation. Current best practice suggests a Balanced Scorecard should have about 20 objectives, each with one or two measures. Tabulating such data is not difficult but where multiple Balanced Scorecards are needed and data is collected from many sources and locations then complexity increases.
A recent report found 21 specialised Balanced Scorecard software packages on general sale. This is on top of custom/in-house developments of ‘office’ or other (e.g. EIS) software. The key differentiator between these packages is largely their additional features. The number of additional features varies hugely, and in general the price reflects this variation.
How to decide
There are two decisions to make: whether to use software at all, and if so, which software to choose. The first decision should be influenced by current practices, and should reflect what is right for your organisation. It is easier to take this decision once the scope and purpose of the Balanced Scorecard has been clearly established. The choice of which software should centre on consideration of what additional features beyond simple data reporting are likely to be useful. It is likely that if your organisation already has an established base of multifunction software, then adding a Balanced Scorecard module to this may be the most effective choice. If not, one of the simpler stand-alone specialist packages may well suffice.
In the download below you will find a table in which we summarise some categories of software supplier, and give a few examples of the products available. We have not included pricing for each product because of the many different variables which impact the end price for a specific organisation and need. We do, however, lay out some of the principles firms use on which to base their pricing, for example:
- user numbers - sometimes divided between administrators, ‘write’ users and read only users;
- content - data only or full strategy management functions;
- annual licence fee or on a usage basis.
It can be assumed that the annual cost will be US$20,000 upwards and may well be $100,000 plus.
What else does Balanced Scorecard software do?
Usually the software is designed to facilitate data gathering, data presentation and its subsequent communication within an organisation. Some packages also aim to support the management processes needed to use the software on a day-to-day basis – for example by allowing “alerts” or “actions” to be attached to specific measure reports.
Most packages offer interactive database effects, such as ‘drilling down’ to see trend or analysis data that support or amplify understanding of a reported measure and provision of augmented presentation features (e.g. colourful, sometimes animated, displays that show current measure status symbolically). The more complex packages also allow for the tracking of projects associated with particular measures, or integrate reporting of multiple Balanced Scorecards through a single program.
Software from the bigger, multi-application vendors usually links into a suite of other applications (such as business modelling, data mining, CRM etc.) – the type of applications offered determined by the product catalogue of the vendor rather than any specific needs of a Balanced Scorecard user. The extent to which access to these other applications is useful needs to be assessed on a case-by-case basis. In general none of these extra features are solely to support the use or deployment of a Balanced Scorecard but they can be extremely valuable in integrating it into the organisation and/or being a fuller aid to strategy management.
Automatic Data Collecting – only half the answer?
Most packages have some ability to extract Balanced Scorecard data from existing databases automatically. Whilst this is useful, bear in mind that typically:
- In our experience about half the measures relate to infrequently recorded results (e.g. survey results) or are subjective scores entered manually.
- About half will be ones previously not collected/reported by the organisation.
Either way automatic data capture features will probably only be useful for about half the data on your Balanced Scorecard.
What the software does not do
Software does not implement the strategy for you nor design a good Balanced Scorecard based on that strategy. In most cases it also does little to ensure that the Balanced Scorecard is subsequently used effectively. In this respect Balanced Scorecard software is no different from any other application: buying personal organiser software will itself not ensure that its users will get to more meetings on time. Overlaying software on a badly designed Balanced Scorecard will simply result in an expensive tool that doesn’t deliver the intended results.