--- title: "Need of IS and balanced scorecard" subject: "Information System" chapter: 1 key: "semester_8/information_system:why-need-is-balanced-scorecard" source: https://www.bctengineer.com/q/semester_8/information_system/why-need-is-balanced-scorecard site: BCT Engineering --- # Need of IS and balanced scorecard Information System · Chapter 1: Information Systems - Asked in: 2073 Bhadra, 3+3 marks - Video: [The Balanced Scorecard Explained with Examples](https://www.youtube.com/watch?v=C0JZdyb6hZE) — EPM - Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14 - Page: https://www.bctengineer.com/q/semester_8/information_system/why-need-is-balanced-scorecard - Whole chapter: https://www.bctengineer.com/md/semester_8/information_system/chapter-1 ## Question Why do we need Information Systems? Explain the relationship between balanced scorecard and Information System. ## 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. ## Answer #### 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: ```text 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. ## Check yourself The answer's key points as multiple-choice questions, with the correct option and why. 1. Which are the four perspectives of the Balanced Scorecard? A. Financial, marketing, production, HR B. Financial, customer, internal business process, learning and growth C. Input, process, output, feedback D. Strategic, tactical, operational, technical Answer: B. Kaplan and Norton's BSC measures these four perspectives instead of only finances. (Key point: BSC perspectives) 2. How does an IS support the BSC? A. It replaces the four perspectives B. It only measures financial results C. It supplies the data for every BSC measure and shows the scorecard in dashboards D. It sets the company vision Answer: C. Sales data, feedback, process logs and training records feed BSC measures. (Key point: IS supplies data) 3. How does the BSC guide IS planning? A. IS projects are chosen if they support a strategic objective in one perspective B. IS projects are chosen by lowest cost only C. IS projects are chosen at random D. IS projects must avoid customer measures Answer: A. BSC links IS investments to business strategy. (Key point: BSC guides IS) 4. Under which perspective are information systems themselves measured? A. Financial B. Customer C. Internal business process D. Learning and growth (IT infrastructure) Answer: D. IT capability is part of the learning and growth perspective. (Key point: IS under BSC) ## 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 - [Strategic information system and benefits](https://www.bctengineer.com/question.md?key=semester_8%2Finformation_system%3Astrategic-is-benefits) — Information System, chapter 1, asked 2× - [Geographic Information System](https://www.bctengineer.com/question.md?key=semester_8%2Finformation_system%3Agis-characteristics-uses) — Information System, chapter 1 - [Short note: HR information system](https://www.bctengineer.com/question.md?key=semester_8%2Finformation_system%3Ashort-note-hris) — Information System, chapter 6 - [MIS vs DSS information and processing](https://www.bctengineer.com/question.md?key=semester_8%2Finformation_system%3Amis-vs-dss-information-processing) — Information System, chapter 4 - [Why organizations need IS; IS vs DBMS](https://www.bctengineer.com/question.md?key=semester_8%2Finformation_system%3Awhy-need-is-vs-dbms) — 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 - [Why do we need DFT](https://www.bctengineer.com/question.md?key=semester_7%2Fdigital_signal_analysis_and_processing%3Awhy-need-dft) — Digital Signal Analysis and Processing, chapter 7, asked 6× - [Why do we need FFT](https://www.bctengineer.com/question.md?key=semester_7%2Fdigital_signal_analysis_and_processing%3Awhy-need-fft) — Digital Signal Analysis and Processing, chapter 7, asked 2×