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Need of IS and balanced scorecard

Short answer

Information systems provide timely data for decision making, efficiency and competitive advantage. The Balanced Scorecard measures performance across financial, customer, internal process, and learning and growth perspectives; IS supplies the data for these measures, presents dashboards, and guides IS planning to align with strategic goals.

Why do we need Information Systems? Explain the relationship between balanced scorecard and Information System.

Why we need Information Systems

  • To collect, process and deliver accurate information quickly for decision making.
  • To automate operations and reduce cost, time and errors.
  • To gain competitive advantage through better service and new products.
  • To manage large volumes of data and share it among departments.
  • To support planning, control and reporting, including legal records.
  • To improve communication with customers, suppliers and employees.

Balanced scorecard and Information System

The Balanced Scorecard (BSC), proposed by Kaplan and Norton, is a strategic performance management framework that measures an organization from four perspectives instead of only finances:

          Vision & Strategy
  +-----------+-------------+
  | Financial | Customer    |
  +-----------+-------------+
  | Internal  | Learning &  |
  | Process   | Growth      |
  +-----------+-------------+
  1. Financial - profit, revenue growth, return on investment.
  2. Customer - satisfaction, retention, market share.
  3. Internal business process - cycle time, quality, efficiency.
  4. Learning and growth - employee skills, innovation, IT capability.

Relationship:

  • The IS supplies the data for every BSC measure (sales data, customer feedback, process logs, training records).
  • Dashboards in an EIS/ESS/BI tool display the scorecard in real time with drill-down.
  • BSC guides IS planning: IS projects are chosen if they support a strategic objective in one of the four perspectives.
  • Information systems themselves are measured under the learning and growth (IT infrastructure) perspective.
  • BSC links IS investments to business strategy, making the value of IS visible to management.

✓ Answer checked by Claude Opus 5.5 (high effort)

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