Every COBIT 5 resource mentions the Balanced Scorecard. Why can't we just use a standard IT dashboard with uptime and security stats? Does the BSC add real value to the governance of enterprise IT, or is it just another layer of management theory? I am trying to justify the extra work required to categorize our metrics into these four dimensions to my IT Director, who just wants to see the "red/green" status of our servers. How does this help the bottom line?
3 answers
The BSC is essential because it prevents "tunnel vision." If you only look at technical "red/green" server stats (the Internal perspective), you might miss that your costs are spiraling (Financial perspective) or that users are unhappy despite the uptime (Customer perspective). COBIT 5 uses the BSC to ensure IT is governed as a business unit, not just a cost center. It forces the IT Director to show how technical stability leads to "Learning and Growth" (staff skills) and ultimately "Business Value." It’s the only way to speak the language of the CEO and CFO effectively.
How do you determine the weighting for each dimension? Should Financial goals always outweigh Learning and Growth in a COBIT 5 scorecard?
The BSC provides a 360-degree view. Without it, you’re just measuring how fast the engine is spinning without checking if the car is actually moving toward the destination.
Well put, Betty! Sandra's point about tunnel vision is exactly why the BSC is a staple in COBIT 5. It keeps the focus on the actual destination of the business.
That's a strategic choice, Charles. COBIT 5 doesn't mandate weightings because every enterprise is different. A startup might prioritize "Learning and Growth" to innovate quickly, while a mature bank might prioritize "Financial" and "Customer" compliance. However, the beauty of the Goals Cascade is that it shows the "Lead-Lag" relationship. If you neglect "Learning and Growth" today, your "Internal Processes" will fail tomorrow, which eventually hurts your "Financial" bottom line. Tell your Director that the BSC is an "early warning system" that prevents future financial disasters by tracking the drivers of success now.