The usefulness of Benchmarking and a
Balanced scorecard to Beam Ltd
I have recently been appointed the new management accountant of a company, Beam Ltd which formed ten years ago. This company helps to provide office equipment solutions to local businesses. Beam Ltd has separate divisions within the organisation for research, marketing, product design, technology and communication services and now manufacturers and supplies a wide range of business equipment such as photocopiers, printers and scanners. Normally, the performance of Beam Ltd is monitored using monthly financial reports that analyse profitability by type of equipment. I have been asked to prepare a paper for the next board meeting dealing with benchmarking and the balanced scorecard as to offer this as alternatives to help improve the business.
The aim of this report is to inform board members who did not attend a recent course revolving around benchmarking and the Balanced Scorecard about the advantages and disadvantages, how they can help the organisation improve and see better financial reports returned.
A Balanced scored, or as it is also known a BSC, is the concept used in measuring whether smaller-scale operational activities of the organisation are within the structure of its larger scale objectives in terms of there overall vision and strategy. This is a common accounting management tool and has been successfully used since the late 80’s by a company called Analog devices. A BSC is so successful because it doesn’t just focus on financial outcomes but also on the human issues, this structure helps to give the organisation a more comprehensive view of itself, this in turn helps the organisation act in the best manner in view of its long term interests. The strategic management system helps the managers to focus on performance metrics whilst balancing financial objectives with the customer, process and employee perspectives. Measures are often indicators of...