---
title: "Short note: Next generation BSC"
subject: "Information System"
chapter: 5
key: "semester_8/information_system:short-note-next-gen-bsc"
source: https://www.bctengineer.com/q/semester_8/information_system/short-note-next-gen-bsc
site: BCT Engineering
---

# Short note: Next generation BSC

Information System · Chapter 5: Planning for IS

- Asked in: 2073 Bhadra, 4 marks; 2072 Magh, 5 marks (asked 2 times)
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_8/information_system/short-note-next-gen-bsc
- Whole chapter: https://www.bctengineer.com/md/semester_8/information_system/chapter-5

## Question

Write a short note on Next Generation Balanced Scorecard.

## Short answer

The next generation balanced scorecard adds a strategy map to show cause-effect links among financial, customer, internal process, and learning & growth perspectives. It starts with a destination statement and strategic objectives, then selects measures with targets and initiatives, aligning the scorecard across all levels.

## Answer

The **Balanced Scorecard (BSC)** is a strategic performance management framework developed by Kaplan and Norton that measures an organization through four perspectives instead of financial figures alone. The **Next Generation BSC** (also called the second/third generation or strategy-map BSC) improves on the original by linking measures directly to strategy through cause-and-effect relations.

#### Four perspectives
- **Financial:** revenue growth, profit, return on investment.
- **Customer:** satisfaction, retention, market share.
- **Internal business process:** cycle time, quality, defect rate.
- **Learning and growth:** employee skills, IT capability, culture.

#### What is new in the next generation
- **Strategy map:** a diagram showing cause-and-effect links; for example, better staff training leads to better processes, which leads to happier customers, which leads to higher profit.
- **Destination statement:** a clear description of where the organization wants to be, used to select objectives.
- **Strategic objectives first:** measures are chosen after the objectives, not before.
- **Targets and initiatives:** every measure has a target, an owner and an action plan.
- **Alignment:** the scorecard is cascaded to departments and individuals, and tied to rewards.
- **Extra perspectives:** some versions add an IT/innovation or stakeholder perspective.

```text
 Learning & Growth
        |
        v
 Internal Processes
        |
        v
     Customer
        |
        v
     Financial
```

#### Use in information systems
IT projects are justified by their effect on all four perspectives, and the scorecard helps management track whether an IS delivers business value, not only technical output.

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. Which is the correct set of BSC perspectives?
   A. Financial, customer, internal business process, learning and growth
   B. Financial, marketing, production, HR
   C. Cost, time, quality, scope
   D. Input, process, output, feedback
   Answer: A. The BSC uses financial, customer, internal process and learning and growth perspectives. (Key point: Four perspectives)

2. What is the purpose of a strategy map in the next generation BSC?
   A. It lists staff salaries
   B. It shows cause-and-effect links between objectives, e.g. better training leads to better processes, happier customers and higher profit
   C. It is a geographical map of branches
   D. It replaces all measures
   Answer: B. Strategy maps link objectives through cause and effect across perspectives. (Key point: Strategy map)

3. In the next generation BSC, how are measures chosen?
   A. Measures are chosen first, then objectives
   B. Strategic objectives are set first, then measures
   C. Only financial measures are used
   D. Measures need no targets
   Answer: B. Objectives come first, and measures are chosen after them; each measure has a target, owner and action plan. (Key point: Objectives first)

## Related in Information System

- [Balanced scorecard for IS](https://www.bctengineer.com/question.md?key=semester_8%2Finformation_system%3Absc-importance-is-implementation) — Information System, chapter 5
- [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

## Related in other subjects

- [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
- [Balanced scorecard in ICT projects](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Abalanced-scorecard) — ICT Project Management, chapter 15
- [SSB vs AM and DSB-SC; balanced modulator](https://www.bctengineer.com/question.md?key=semester_6%2Fcommunication_systems%3Assb-vs-am-balanced-modulator) — Communication Systems, chapter 2