The Application of the ERP Balanced Scorecard

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Enterprise resource planning or ERP is a system or a piece of software that has the ability to manage and handle all the business information and functions from the shared storage of data. Usually, this is a package of commercial software that supports flawless integration of the information that a company generates. Many experts believe that ERP system so a sophisticated yet very complex when compared to the other softer systems. This offers solutions that are essential to different processes in the business including planning of production and the management of the control and warehouse departments. Because of the popularity of ERP, the vendors of this type of software package has experienced major leap in sales for several years now.

On the other hand, the balanced scorecard is seen as one of the most useful tools when it comes to the decision making process. A businessman needs to know the exact condition or status of his company in order for him to make the right and unbiased choices. This is what the BSC does for him. He is given the opportunity to view the health of his company in different perspectives such as the customers, the financial aspect, learning and growth of the employees and the internal processes. All of these things are essential and will enable a business to succeed in the volatile world of business.

Combining them together, you get he ERP balanced scorecard. This is a powerful tool that will help you not only in performance measurement but also in aligning your goals with the strategies. Managers have already seen the efficiency of the ERP balanced scorecard as it empowers the evaluation of information technology from their point of view. There are three things that should be considered in this type of BSC. They are the objectives, measures and the benchmarks.

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For instance, your objective is to manage risks. In measures, you can appoint the outcomes of internal audits as well as the execution of the plans for security. You can also add here the delivery of the assessment for disaster recovery. For the benchmarks, you can simply assign the defined business practices. The ERP balanced scorecard is a modified version of the BSC. This is often utilized in order to evaluate the implementation of the enterprise resource planning software and to assess the continuous operation of the installation of ERP.

As mentioned, the lanced scorecard reviews the four perspectives in the business. When the ERP is applied on the scorecard, there is an added perspective here. It is the project viewpoint, which covers the requirements of each project in the company as well as the identification of the crucial path and the milestones. The fifth perspective represents the tasks that are involved in project management. While most of those who implement the ERP system focus only on the financial and internal processes aspects, the ERP balanced scorecard helps them to concentrate on the customers and the development of the company. The improvement and the growth of the business is very important as it allows the generation of alternative values that are meant for conceivable progress paths to support implementation of flexible systems.

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