--- title: "Balanced scorecard in ICT projects" subject: "ICT Project Management" chapter: 15 key: "semester_7/ict_project_management:balanced-scorecard" source: https://www.bctengineer.com/q/semester_7/ict_project_management/balanced-scorecard site: BCT Engineering --- # Balanced scorecard in ICT projects ICT Project Management · Chapter 15: Balanced scorecard and ICT project management - Asked in: year not given; year not given - Video: [The Balanced Scorecard explained](https://www.youtube.com/watch?v=zf-d-O7hVhM) — Sim Institute - Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14 - Page: https://www.bctengineer.com/q/semester_7/ict_project_management/balanced-scorecard - Whole chapter: https://www.bctengineer.com/md/semester_7/ict_project_management/chapter-15 ## Question What do you mean by a balanced scorecard? How does it help in ICT project management? ## Short answer The balanced scorecard is a strategic performance system translating vision into objectives and measures across financial, customer, internal process, and learning/growth perspectives. In ICT project management, it aligns projects with strategy, provides a balanced evaluation beyond time and cost, and aids project selection and monitoring with leading and lagging indicators. ## Answer The **balanced scorecard (BSC)** is a strategic performance measurement and management system, introduced by Robert Kaplan and David Norton (1992). It translates an organisation's vision and strategy into objectives, measures, targets and initiatives across four perspectives, giving a balanced view rather than financial results alone. #### Four perspectives ```text Vision and Strategy +-----------+-----------+------------+ | Financial | Customer | Internal | | | | processes | +-----------+-----------+------------+ Learning and growth ``` | Perspective | Key question | Example measures | |---|---|---| | Financial | How do we look to shareholders? | ROI, cost, revenue | | Customer | How do customers see us? | Satisfaction, retention, response time | | Internal business process | What must we excel at? | Cycle time, defects, quality | | Learning and growth | Can we keep improving? | Training hours, skills, innovation | Each perspective has: objectives, measures (KPIs), targets and initiatives, linked by cause-and-effect (learning leads to better processes, which lead to customer satisfaction, which leads to financial results). #### How it helps in ICT project management 1. **Aligns projects with strategy**: select and prioritise IT projects that support the scorecard objectives. 2. **Balanced evaluation**: measures success beyond cost and time (customer satisfaction, process quality, team skills). 3. **Better project selection and portfolio management**: scoring projects against the four perspectives. 4. **Monitoring and control**: KPIs such as SPI/CPI (financial/internal), defect rate (process), user satisfaction (customer), staff competency (learning). 5. **Communication**: gives a clear picture of goals and progress to management and teams. 6. **Early warning**: leading indicators (training, process metrics) show problems before financial loss. 7. **Supports continuous improvement** and accountability. 8. **Helps benefit realisation** of IT investment. #### Example (e-governance ICT project) - Financial: stay within budget; cost saving per transaction. - Customer: 90% citizen satisfaction; average service time under 2 days. - Internal: system uptime 99.5%; defect density below target. - Learning: all staff trained in the new system. #### Limits Needs time to design; requires reliable data; measures must be chosen carefully. ## Check yourself The answer's key points as multiple-choice questions, with the correct option and why. 1. What is the main idea behind the balanced scorecard? A. Measure performance using financial results only B. Translate vision and strategy into objectives and measures across several perspectives, not just financial C. Estimate software size in KLOC D. Schedule project activities on a critical path Answer: B. The BSC turns strategy into objectives, measures, targets and initiatives across four perspectives, giving a balanced view beyond financial results. (Key point: Purpose of BSC) 2. Which set lists the four perspectives of the balanced scorecard? A. Financial, Customer, Internal business process, Learning and growth B. Cost, Time, Scope, Quality C. Financial, Customer, Supplier, Government D. Planning, Execution, Monitoring, Closing Answer: A. The four perspectives are Financial, Customer, Internal business process, and Learning and growth. (Key point: Four perspectives) 3. In the BSC cause-and-effect linkage, what leads to better internal processes? A. Higher revenue B. Learning and growth (training, skills) C. Customer satisfaction D. Lower cost Answer: B. Learning leads to better processes, which lead to customer satisfaction, which leads to financial results. (Key point: Cause-and-effect chain) 4. Why does the BSC give early warning in an ICT project? A. Because it tracks only final profit B. Because leading indicators like training and process metrics show problems before financial loss occurs C. Because it removes the need for KPIs D. Because it replaces the project schedule Answer: B. Leading indicators from non-financial perspectives reveal issues before they appear as financial loss. (Key point: Early warning and control) ## Related in ICT Project Management - [Inhibitors of project success and balanced scorecard](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Ainhibitors-project-success) — ICT Project Management, chapter 3 - [IT project management methodology](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Ait-pm-methodology) — ICT Project Management, chapter 14 - [Project management body of knowledge](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Adefine-pmbok) — ICT Project Management, chapter 2 - [General management skills and project management](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Ageneral-management-skill) — ICT Project Management, chapter 2 - [Project portfolio management](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Aportfolio-management) — ICT Project Management, chapter 3 - [Define project management](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Adefine-project-management) — ICT Project Management, chapter 4 ## Related in other subjects - [Types of projects; effect of project management](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aproject-types-effect-of-management) — Project Engineering, chapter 1 - [Need of IS and balanced scorecard](https://www.bctengineer.com/question.md?key=semester_8%2Finformation_system%3Awhy-need-is-balanced-scorecard) — Information System, chapter 1 - [Balanced scorecard for IS](https://www.bctengineer.com/question.md?key=semester_8%2Finformation_system%3Absc-importance-is-implementation) — Information System, chapter 5 - [Risk in construction projects and its management](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Arisk-define-more-chance-construction) — Project Engineering, chapter 5