If you are a business owner considering using a framework for strategic management, you have definitely heard of BSCs and KPIs. While these acronyms may strike fear into the hearts of newbies, they are used globally to measure the performance of various institutions, from schools and government agencies to military units and small online businesses. Since its introduction in the early 1990s, this tool has gained great popularity due to its comprehensive approach to business assessment: in addition to the traditional financial and time perspectives, the developers of the Scorecard have offered three non-financial areas: education and Learning, Customer Service, and Internal Process Perspectives. Due to these aspects, this performance evaluation system can give a broad vision of what happens within your company. However, there are both pros and cons to this approach. Next, we will try to point out the positive and negative aspects of this tool on the example of a hotel company.
Dashboard Designer
Finding a trustworthy officer who can properly design and identify the most essential components of your hotel business is crucial. Individual managers belonging to different departments may try to portray their divisions as the most important elements of the company (room service managers may concentrate on their work, while hotel restaurant managers may view meals as the cornerstone). cornerstone of the entire company). That’s why it’s a great idea to hire an impartial specialist or an independent manager to design the BSC and list the key performance indicators.
Advantages: An experienced and unbiased manager can create a perfect scorecard template for your particular hotel unit or the entire network. In this case, the BSC will be a great tool to analyze the success of the hotel and see the cause and consequence relationships between the financial and non-financial perspectives.
Disadvantages: A manager with personal preferences and inclinations may create the wrong template with irrelevant KPIs (usually too narrow to give a holistic view of the company’s state of affairs). Wrong KPIs make the whole system difficult to understand and useless. In addition, wrong indicators can lead to wrong conclusions and decisions that can drastically affect a good business structure.
data processing
It is impossible to get an assessment without collecting data. In fact, the entire Balanced Scorecard is about collecting and analyzing data. But how accurate is the information you get from your managers and customers?
Advantages: In case you get information from an unbiased source, it serves as a great tool to gauge your customer satisfaction and other aspects. For example, you can use the ‘mystery shopper’ service for your hotel unit: send them to the restaurant, reception hall or wherever to get a third party evaluation of the quality of service. Mystery shoppers can be found at many marketing research agencies.
Disadvantages: Continuous reports can be very distracting and can decrease overall productivity. Staff can also take the idea of the BSC halfheartedly and fill out forms in a hurry. Also, sometimes KPIs can involve getting very obscure information that simply cannot be measured in numbers.