Implementing a Balanced Scorecard in Project Management

Implementing the balanced scorecard in project management requires careful planning and organization. Use this simple process to create your scorecard.

1. Map Your Strategy

The first step in preparing a balanced scorecard for project management is strategy mapping. First, define an overall goal. Consider the ultimate purpose for the project management team rather than the objectives of the individual projects. An organization does not develop a project management unit simply to complete things on time and in budget. Rather, the project management department is initiated in order to provide some defined value to the organization.

2. Define KPIs for Each Objective

Once you know where you want to go, you then must determine how you will know you are making progress toward your objective. KPIs are the signposts that help you know you’re following your strategy map.

3. Determine Measurements for Each KPI

The next step in preparing your balanced scorecard is defining the measurements used to evaluate KPI performance. Performance indicators do you little good unless you have a realistic way to measure how well they are actually performing. Thus, measurements must meet two requirements:

  1. Measurements must be quantifiable.
  2. Data collection requirements must be realistic.

4. Establish Data Collection Procedures

You are probably already tracking the numerical data that you’ll be using, like money and time. Data for indicators driven by numerical data is usually easy to obtain. If you are using balanced scorecard software, you may be able to obtain this information via database uplink. If not, you can have employees enter data into spreadsheets or databases for compilation.

5. Assign Roles

Roles are an important aspect of balanced scorecard success. Choose those people in your organization that have the most control over specific KPIs you’ve selected and assign responsibility for KPI tracking accordingly. Make sure to consider the ability of the person to obtain the KPI data easily.

6. Educate Team Members

Educating project management team members is the last step in implementing a project management balanced scorecard. Your balanced scorecard education and training program should fulfill these requirements:

  • Explains the balanced scorecard concept, its benefits and use in project management
  • Identifies the specific results you wish to achieve
  • Outlines the strategy map you have created
  • Defines the KPIs you have selected and the measurements for each
  • Explains the data collection process
  • Assigns roles and responsibilities