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With the business landscape in 2019 being one of shifting priorities and new opportunities in large part because of progressions made possible by data science, it is critical that a business remain narrowly-focused strategically when executing a business plan. The consequences of not having a strong strategic plan could be the difference between a business that thrives or a business that fails. Therefore, a business should utilize a strategic planning tool such as the balanced scorecard to maximize the effectiveness of a business strategy.
A balanced scorecard is a leadership tool that allows a company to create a business plan that looks beyond just financial success. The scorecard seeks to balance the high-level business objectives of a company which are: mission, values, strategic themes, and results (Wilsey, 2016). By keeping a business aligned with these core objectives, a company can more clearly stay focused ensuring the values and principles that make up an organization are adhered to. The scorecard does this by placing a focus on four business dimensions called strategic objectives, and making sure those strategic objectives align with the high-level objectives of a business. Those four strategic objectives are: financial, customer, process and organizational capacity (Wilsey, 2016).
The balanced scorecard puts a focus on the vision and mission of a company. The vision and mission drive strategy, which then drive strategic objectives, which then lead to company actions (Wilsey, 2016). Everything first starts with the mission and vision of the company. The balanced scorecard is an excellent tool that leaders can lean on to ensure this path is followed because of how visual the scorecard is. In just one document, an entire business strategy can be mapped and outlined ensuring compliance with the high-level objectives of a company.
Such a tool is especially critical in the modern market because of how fast and quickly the modern market shifts. With the rise of big data analytics leading to the profession of data science, new products and services are frequently coming to fruition and companies need to be quick to adapt. It is therefore important that companies utilize big data analytics to acclimate and grow. The balanced scorecard is a great tool in this regard because it allows for a person to visually view the mission, values and priorities of a company contrasted against the strategies and projects in place. When using big data analytics to discover new products or services, the balanced scorecard can be used to ensure new products are in alignment with high-level business objectives. Data science can lead to groundbreaking discoveries, compelling a company to redefine the high-level business objectives that are currently in place. If a company chooses to redefine the mission, vision or objectives, the balanced scorecard can also be used to see if any prior projects, services or products still align with the new shift in high-level business objectives.
Microsoft is a great example of a company that has embraced this concept. Originally, Microsoft was more focused on releasing software while also focusing on a walled garden approach of exclusivity to the Microsoft ecosphere. Today, Microsoft has embraced cross-platform support removing much of this walled garden approach offering software support for platforms such as Android, iOS and MacOS (Novet, 2018). Microsoft is also rebuilding the Edge browser – the successor to Internet Explorer – on the Chromium engine (Belfiore, 2018). Chromium is the free, open-source engine that powers the Chrome web-browser offered by Google. Had this announcement not come directly from the official Microsoft Blog, it would be hard to believe given the animosity that once existed between Google and Microsoft showing the growth and change Microsoft has embraced as the company alters course strategically.
Microsoft has also altered course on the business model for many of the software platforms Microsoft offers. In the past, when Microsoft released new software products, the customer would have to pay for the new software products and the old ones would eventually be retired, no longer supported by Microsoft. But with Windows 10, the company has shifted focus largely to a service model – essentially end-user data for service, that service in the form of Windows 10. According to Microsoft, Windows 10 is the last and final version of Windows (Bright, 2015). Once Windows 10 is purchased, all future updates to the software will be free of charge to the end-user.
Windows has seen regular version releases ever since 1985 when the first version of Windows was released with each subsequent version being released as a new version at a cost to the end-users. Windows 10 has shifted from this business model as Windows 10 is now updated regularly and will always be a modern operating system as a result. Windows 10 is far more data-friendly to Microsoft then prior Windows versions, allowing for Microsoft to collect vast amounts of data about Windows users which can then be stored in the data lake for analysis and product development.
Other key products from Microsoft have seen a similar shift. Microsoft Exchange is a mail server software that many businesses rely on for company email. Microsoft Exchange is an in-house platform that is operated by a company. Microsoft Exchange servers can be expensive to build and maintain and without proper backups, vulnerable. Microsoft now offers a subscription service called Office 365 where Microsoft hosts, operates, and builds the Exchange server for the business client. Additional value is added to the Office 365 service as the Microsoft Office software suite can also be bundled in allowing for a company to always have the newest version of Microsoft Office without needing to budget for upgrade costs. The Office 365 service greatly reduces the vulnerability a company can face when hosting an internal Microsoft Exchange server, as well as the overhead needed to operate it.
Microsoft also offers a consumer version of Office 365 which allows for consumers to pay monthly or annually a small fee to have the entire Microsoft Office suite. Much like the business customers, the consumer never has to purchase upgrades as whenever a new version of Microsoft Office is released, the consumer can upgrade at no additional cost. There are no contracts for this service and a consumer can cancel at any time. Microsoft can gather immense data from this service to streamline services and come up with new or better products.
In summary, the balanced scorecard puts a focus on the vision and mission of a company. All other action steps are then based on those high-level business objectives. Because of how visual the balanced scorecard is, a business can quickly define, at any given point, where a business is progressing when evaluating both strategy and performance. By using the balanced scorecard, a company can ensure that valuable time and resources are not spent on products or services that do not align with the high-level business objectives of a company. Because of the speed at which the modern market shifts, through the use of data science, a company will best be served utilizing the balanced scorecard to ensure future products or services are in line with high-level business objectives; or that older projects and services remain in-line with any changing high-level business objectives as a company grows and redefines.
References
Belfiore, J. (2018, December 6). Microsoft Edge: Making the web better through more open source collaboration [Blog post]. Retrieved from https://blogs.windows.com/windowsexperience/2018/12/06/microsoft-edge-making-the-web-better-through-more-open-source-collaboration/
Bright, P. (2015). Windows 10 to be the last version of Windows, until the next version. Retrieved from https://arstechnica.com/information-technology/2015/05/windows-10-to-be-the-last-version-of-windows-until-the-next-version/
Novet, J. (2018). How Satya Nadella tripled Microsoft’s stock price in just over four years. Retrieved from https://www.cnbc.com/2018/07/17/how-microsoft-has-evolved-under-satya-nadella.html
Wilsey, D. [Balanced Scorecard Institute]. (2016, February 17). Balanced Scorecard: What It Is and Why So Many Organizations Have One [Video file]. Retrieved from https://www.youtube.com/watch?v=TQi9q0Ink2g