Balanced Scorecard Perspectives

In what follows, we will consider a public sector entity of the four perspectives. The goal is ultimately to provide useful information management, in decision making, both financial and nonfinancial.


Financial Perspective

Financial perspective shows the results of the financial terms. Unlike the private sector, public organizations do not pursue profit, but efficiency, i.e. providing services at a reduced cost. Any organization calculates and uses financial indicators, but this does not automatically ensure utility in making current decisions or in explaining the performance through current actions.

The main feature and, equally, the main problem of the financial indicators is that they measure the past and what is easy to measure. Although often criticized, the financial indicators should not be abandoned, but should be chosen with care and supplemented by the non-financial measures.


Customer Perspective

Customer perspective refers to the organization's ability to provide products or services of good quality, in a way as to please the customer, resulting in his final satisfaction. Meeting consumer expectations and desires must become the fundamental objective of organization.

In the public sector there are a number of specific issues. Thus, measuring customer satisfaction is an indispensable element for the organization to verify that doing the right thing. A public institution position becomes somewhat difficult because customer satisfaction and citizen satisfaction, although the two concepts are indissolubly linked, they should be treated differently. Meanwhile, the challenge for the public sector is balancing the two key aspects of public services, namely the relatively low price and in the same time, high quality, including their accessibility. Also, unlike the private sector, the public sector can not afford to choose or focus on customers preferred or most profitable customers, but must consider the needs of the entire community.


Internal Processes Perspective

Internal perspective refers to the analysis of the internal processes of the organization, what needs to be done in order to achieve the desired results. For this we need to identify key processes and monitor them continuously so that we know where we stand. It is very important for entity to organize and manage its internal work from the point of view of the customer. Customer orientation should be converted into internal indicators to show how customer expectations are met. From this perspective, the organization should identify internal powers: the use of technology, excellence of products and services, easiness to modify a product or service or to create a new one are elements that allow it to maintain and penetrate the market. Good management of internal processes means continuous improvement of processes, labor productivity and ensuring flexibility, quality and providing value.


Learning & Growth Perspective

Innovation and learning perspective covers the main conditions for success. Innovation and learning capacity of the organization is essential not only when it comes to maintaining the current state of facts, but also to improve it in a constantly changing environment. Learning and innovation are not factual elements, quantifiable; therefore they are very difficult to assess and measure, but are elements that provide identity and long-term organizational success. These indicators are included in the BSC according to their relationship with strategy, their power to influence the future performance of the organization. Organizations are not limited only to measure what is easy to measure in this BSC perspective, but will focus on important elements in terms of organizational needs, such as innovation, employee attitude evaluation, the degree of preservation and rotation of employees, experience and learning.