There are thousands and thousands of business out there. Some succeed and some don't. What are the deciding factors of a business' success? While businesses all have access to the same tools, how do you ensure that you stand out?
Traditionally, businesses focus only on sales numbers. If you only monitor that specific metric while not monitoring other aspects such as churn rate, you have the potential to not see the big picture, and ultimately make uninformed business decisions. By monitoring the metrics covered by Balanced Scorecards or BSCs (a concept introduced by Kaplan and Norton - Harvard), one can put more effort towards the right 'dimension' in which to achieve business growth. BSCs are a set of performance management tools used to report on the execution of activities within an organization, allowing for informed decision making.
Traditionally, the BSC was a tool compromised of 4 scorecards, out of which the enterprise would measure the following dimensions:
- financial dimension
- internal business processes
- learning and growth (of the business)
- customer (how do they perceive us)
By using BSCs, executives can easily monitor a variety of aspects related to their business. The same tool could be set on an employee’s dashboard via the BSC; the employee would then be able to align himself more precisely towards his employer’s goals.
Although the BSC is not an out-of-the-box feature in NetSuite, it is possible to implement such a performance management tool. In fact, ERP systems are the perfect BSC data pool since everything is unified under one system and one database.
In order to implement a BSC in NetSuite, one would first create a set of KPI scorecards.
To create a KPI scorecard from within Netsuite, simply go to setup->customization->KPI scorecards->new.
On the KPI Scorecard creation page, you will be able to name and describe the KPI you have created. The ‘Content’ sub-tab is where you will set the details of your scorecard.
In the ‘Content’ sub-tab, you have the KPI’s sub-list, in which you will be able to define what you want to measure. These will be shown as rows on your scorecard.
The ‘Date Ranges’ sub-list will let you define the date range you need to measure. What’s interesting here is the possibility to compare one date range against another date range. Those will also be shown as rows on your scorecard.
Finally, the ‘Custom’ sub-list lets you define custom indicators to evaluate your data against. You have the possibility of defining up to ten indicators. Please note that a custom KPI is basically a saved search.
Note that in order to be able to use a custom KPI in a comparison for a different time range, the search must:
- Not have a date range defined as search criteria.
- Have only one field with a summary type (such as group, sum, or count) defined.
- Have a date column defined as a Filter on the Available Filters subtab of the Saved Search form.
If the type of search you’ve selected does not offer a date column as a filter, you may be able to use a different type of search, for example a transaction search.
If you want to use a saved search as a custom KPI in a scorecard, and you have enabled the Use Periods option for a scorecard, only saved searches with a Period filter defined as an Available Filter can be defined as custom KPIs for the scorecard.
The below is a step by step example of setting up a scorecard for a financial dimension:
We would like to make a scorecard that shows:
- what is in the current funnel
- the accumulated value of sales orders
- the number of sales orders
We would simply set those indicators in the KPI’s sub-list.
Suppose we would like to view these measurements based on the following date ranges:
- the current week
- the last week
- the current week vs last week
- the current month
- the last month
- the current month vs last month
- the current year
- the last year
- the current year vs last year
Once again, we would simply set those indicators in the date ranges sub-list.
Once this has been setup, you can display it on the dashboard by personalizing it. The final result of this scorecard should look like the screenshot below.
Now, in order to emulate a BSC, you setup as many scorecards on a page as you require.
Since you can only have 1 KPI scorecard on the main dashboard, it is advised to create a tab to drop in multiple KPI scorecards in order to simulate the BSC tool.
Finally, all that’s left to do is to empower your own instance with your own customized BSC.