DIGITAL ECONOMY AND DIGITAL TRANSFORMATION REVIEW

ISSN : 2987-2863
E-ISSN : 2987-2839
VOLUME 2 NO 1 2023
PP: 69-75

IMPLEMENTATION OF BALANCED SCORECARD AS A STRATEGIC

MANAGEMENT TOOL IN FINANCIAL SERVICES COMPANIES

Hariadi
Faculty of Economics and Business, Hasanuddin University. Email: [email protected]

Abstrak
Article History The purpose of this study was to analyze the implementation of the Balanced
Recived: 01 Maret Scorecard as a marketing strategy for service companies. The method used in
2023 this research is qualitative. The data generated is descriptive data in the form
Revised: 11 Maret of written or spoken which can be observed within a certain range from a
2023 comprehensive perspective. This study uses a literature study with a content
Accepted: 22 Maret analysis approach. The data used is secondary data in the form of writing
2023
sourced from articles and books. The results of the study show the need for a
balance of financial and non-financial aspects which include: (a) a financial
Keywords: perspective. A good financial aspect then this indicates the good health of the
Balanced company's performance, thus creating a positive perception for consumers. (b)
Scorecard, Service Customer Perspective. Service companies need marketing strategies that are in
company accordance with the target market or market segments. The marketing strategy
that can be used is a digital marketing strategy. Digital marketing strategies
enable service companies to reach a wider market segment. (c) Internal
Business Process Perspective. Service companies need to provide value
propositions that are able to attract and retain customers in the desired market
segment and satisfy shareholders. Internal business processes can be carried
out through innovation processes, operational processes and after-sales
services. (d) Learning and Growth Perspective. Service companies need to
provide the infrastructure for achieving a financial perspective, a customer
perspective, and a process perspective to generate long-term growth and
improvement. It is important for a company when investing not only in
equipment to produce products or services, but also investing in infrastructure,
namely: human resources, systems and procedures.

A. INTRODUCTION
The use of balanced Scorecard (BSC) has been widely used in various companies to
measure company performance. Company performance measurement needs to be done to find
out whether the marketing strategy with the implementation of BSC has been effective within
a certain period of time (Saputri, 2021; Devani, 2016). Performance can be interpreted as one
of the efforts carried out by the company to quantitatively evaluate the results of transactions
that have been carried out by the responsibility center in a certain period (Irawan, 2019). BSC
is also used in companies in order to increase competitiveness (Dewi &; Homan, 2023).

Digital Economy and Digital Transformation Review Vol 1 no. 2 2022 69

 BSC is not only used by business organizations but also by non-profit organizations. BSC
can assist governments and non-profit organizations in controlling finances and measuring
organizational performance. Non-profit organizations are organizations established with the
aim of providing services to the community. The success of government or non-profit
organizations is measured through effectiveness and efficiency in providing services to the
community. In other words, success lies not in financial achievement but in customer
satisfaction. By using a balanced scorecard approach, government organizations or nonprofit
organizations can conduct short-term and long-term performance assessments (Devani, 2016).
One of the keys to effective use of BSC is to have integrity and full support for
management leadership (Hadi, 2023). This is so that the company's performance is expected to
run efficiently and organizational goals will be achieved consistently. The use of BSC was
initially only intended to improve the financial measurement system, then expanded and was
used to measure four perspectives, namely finance, customers, internal business processes and
learning and growth (Kaplan &; Norton in Wasliman et al., 2023). Financial perspective where
finances are expected to be managed properly and optimally. Income obtained from various
sources can be managed properly and can be accounted for. For this reason, it is necessary to
understand financial literacy well, so as to provide benefits for all stakeholders.
Customer perspective where customers in this case are all stakeholders who are directly
involved or have a direct interest with the company. Companies must strive to increase customer
satisfaction which will have an impact on financial performance. Satisfied customers will make
repeat purchases, recommend, and not switch easily. Process perspective where the creation of
a good atmosphere in the process of service to all stakeholders. Companies always need to have
good service quality measured through reliability, responsiveness, assurance, and physical
evidence. Meanwhile, digital transformation is also needed to provide more efficient and
effective service processes. 4) Learning and growth perspective where it is important for the
company to pay attention to the development of employee competencies. Employees with good
competence will improve company performance. Competency development in carrying out
through education and training (DIKLAT) (Arifudin &; Mayasari, 2021)
The use of BSC by service companies can have a balanced and comprehensive view of
organizational performance and not only focus on financial aspects as the main one (Lubis,
2023). It assists organizations in identifying and setting long-term goals, monitoring progress,
and taking corrective actions as needed to achieve those goals. BSC also enables organizations
to link long-term strategies with day-to-day operational actions and initiatives. By considering
four key perspectives, organizations can strike a balance between short-term and long-term
goals, as well as create sustainable added value for all stakeholders.
The use of BSC as a marketing strategy in measuring the performance of service
companies provides very significant results. The results of research from Heprilina (2021),
Zuniawan et al. (2020), Lufriansyah (2020), and Setyawan (2018) found improvements and
better evaluation of company performance due to the balance of assessments from financial and
non-financial aspects. This proves that the financial performance of a good service company
must be supported from the aspects of customers, internal business processes and development
and growth.

B. LITERATURE REVIEW

70 Digital Economy and Digital Transformation Review Vol 1 no. 2 2022

 BSC is a scorecard used to measure performance by paying attention to the balance
between financial and non-financial sides, between short and long term and involving internal
and external factors (Rangkuti, 2013). BSC is a solutive idea that can be used as a reference for
a company in order to improve the company's work ethic so that it is always in the corridor of
the visionary corporate vision and mission (Kaplan &; Norton in Utama, 2017). This is intended
so that the company is able to compete in any case, which does not only focus on the company's
material but various other internal and external factors, namely: financial aspects, customer
aspects, aspects of business and internal processes, and aspects of learning and growth
(Mahmudi, 2013).
In BSC, organizational performance is measured through four main interrelated
perspectives, namely:
1. Financial Perspective: Pay attention to financial indicators such as revenue, net profit,
and return on capital. This perspective describes whether the organization is achieving
financial goals and providing added value to shareholders.
2. Customer Perspective: Focus on customer satisfaction and the organization's ability to
meet customer needs and expectations. The indicators used can be customer satisfaction
level, market share, or customer retention rate.
3. Internal Process Perspective: Highlights the efficiency and effectiveness of the
organization's internal processes. In this perspective, key indicators related to the
processes that produce a product or service are identified, including innovation, quality,
and productivity.
4. Learning and Growth Perspective: Measures an organization's ability to learn, adapt,
and improve its capabilities. This perspective covers aspects such as employee
development, knowledge management, and innovation capabilities
(Kaplan & Norton in Utami in Main, 2017)
The main advantages of the Balanced Scorecard (BSC) four-perspective approach are:
1. The balanced scorecard brings together the different elements of a company's competitive
agenda in one report.
2. By combining all crucial operational metrics, managers per division or department are
forced to weigh an achievement against potential risks (Kaplan &; Norton in Utama2017)
The Balanced scorecard (BSC) has the following functions:
1. As a measure of the company whether the vision and mission adopted have been
achieved.
2. As a measure of competitive advantage owned by the company.
3. As a strategic guide for running a business.
4. The strategy effectiveness analysis tool that has been used.
5. Provide an overview to the company related to its SWOT.
6. As a corporate performance tool.
7. As feedback to the company's shareholders.
8. As a communication tool, information, and enterprise learning analysis system (Kaplan
&; Norton in Main, 2017).

C. RESEARCH METHODS
The method used in this study is qualitative according to Sugiyono (2013) qualitative
methods are used to examine the natural condition of objects that understand the phenomenon

Digital Economy and Digital Transformation Review Vol 1 no. 2 2022 71

of things that are assessed based on the research subject. The data produced is descriptive data
in the form of written or oral that can be observed in a certain scope seen from a comprehensive
point of view. This study used a literature study with a content analysis approach. The data used
is secondary data in the form of writing sourced from articles and books (Moleong, 2014).

D. DISCUSSION
Balanced Scorecard is a measurement method to measure the company's performance
in the future by considering four perspectives to measure company performance, namely:
financial perspective, customer perspective, internal business process perspective, and growth
learning perspective. The four perspectives, it can be seen that BSC measures its performance
by taking into account the balance between financial and non-financial, short-term and long-
term sides and also involving internal and external factors.
BSC develops a set of business unit objectives beyond a summary of financial measures.
BSC covers a wide range of value creation activities generated by highly skilled and motivated
company participants. While keeping a close eye on short-term performance, namely through a
financial perspective, BSC clearly reveals the factors that drive the achievement of superior
long-term financial and competitive performance. BSC aims to communicate company targets,
compile employee job descriptions that are in accordance with the strategy, determine the
priorities of projects, products and services, measure and monitor the company's progress
towards targets.
Financial Perspectives. Measurement of financial performance shows whether planning,
implementation and execution as well as strategies provide fundamental improvements. Service
companies that have good financial performance can be measured by developments in financial
ratios which include liquidity ratios, activity ratios, profitability ratios, and solvency ratios. The
financial aspect is good, it is expected that the company's long-term goals related to shareholder
welfare can be achieved. Ways that can be taken by service companies through (a) Increasing
customer satisfaction through increasing revenue. (b) Increased productivity and commitment
of employees through cost-effectiveness, resulting in increased profits. (c) Increased ability of
the company to generate expected returns by reducing capital employed or investing in projects
that generate high returns. In essence, with a good financial aspect, this indicates that the
company's performance is good, thus creating a positive perspective for investors.
Customer Perspective. Service companies need marketing strategies that are in accordance
with the target market or market segment. Marketing strategies that can be used are digital
marketing strategies. Digital marketing strategies allow service companies to reach a wider
market segment. Consumers will feel satisfied when information related to the needs and desires
of the product brand is obtained quickly. Therefore, the existence of content through various
social media will help companies disseminate information, thereby shortening the purchase
decision process. Furthermore, service companies need to create products that have added
value. The added value provided can be used as an indicator of the company's success in
creating consumer satisfaction in the core group and supporting groups. Customer benchmarks
are divided into two groups, namely the core measurement group and the customer value
proposition. The core meansurement consists of: (a) Market share. (b) The rate of acquisition
of new customers or customer acqutition. (c) The company's ability to retain existing customers
or customer retention. (c) The level of customer satisfaction or customer satisfaction. (d) The
level of customer profitability. While this supporting group is divided into three groups,

72 Digital Economy and Digital Transformation Review Vol 1 no. 2 2022

namely: (a) Product attributes (price, quality, function). (b) Relationships with customers. (c)
Image and reputation.
Internal Business Process Perspective. Service companies need to provide a value
proposition that is able to attract and retain customers in the desired market segment and satisfy
shareholders. Internal business processes can be implemented through the Innovation process.
The innovation process is the most important part in the entire service process. In the
innovation process, companies need to identify customer desires and carry out a service product
design process that is in accordance with customer wishes. If the results of innovation from the
company are not in accordance with customer wishes, the product will not get a positive
response from customers. This does not provide additional income for the company. The
perspective of internal business processes can also be implemented by means of operating
processes. The operation process is related to the activities carried out by the company which
can be seen from planning, marketing processes, to the transaction process between the
company and buyers. This process emphasizes delivering products to customers efficiently, on
time, and based on facts which is the main focus of most organizations' performance
measurement systems. In the end, internal business processes can be carried out through after-
sales service. After-sales service is a service provided by a service company to consumers as a
guarantee of the quality of service that has been purchased by consumers.
Learning and Growth Perspectives. Service companies need to provide the infrastructure to
achieve the previous three perspectives and to generate long-term growth and improvement. It
is important for a company when investing not only in equipment to produce products or
services, but also investing in infrastructure, namely: human resources, systems and procedures.
Benchmarks of financial performance, customers, and internal business processes can trigger
large gaps between existing capabilities of people, systems, and procedures. To narrow the gap,
a company must invest in the form of reskilling employees, namely: improving the capabilities
of systems and information technology, and rearranging existing procedures. The perspective
of learning and growth can be implemented by improving employee capabilities. Employee
capabilities are part of employees' contributions to the company. In relation to employee
capabilities, there are 3 things that must be considered by management: (1) Employee
satisfaction. Employee satisfaction is a precondition for increasing productivity, responsibility,
quality, and service to consumers. Elements that can be measured in employee satisfaction are
employee involvement in making decisions, recognition, access to information, encouragement
to work creatively, and use initiative, as well as support from superiors. (2) Employee retention.
Employee retention is the ability to retain the best employees in a company. Employee retention
can be measured by the percentage of turnover in the company. (3) Employee productivity.
Employee productivity is the result of the overall influence of improved skills and morale,
innovation, internal processes, and customer satisfaction. The goal is to relate the output
produced by employees to the number of employees who are supposed to produce that output.
(4) Information System Capabilities. The benchmark for information system capabilities is the
level of information availability, the level of accuracy of available information, and the period
of time to obtain the information needed. (5) Organizational Climate. The climate of
organization is one that encourages motivation, and empowerment is important to create
employees who take initiative.

Digital Economy and Digital Transformation Review Vol 1 no. 2 2022 73

E. CONCLUSION
Financial Perspectives. Measurement of financial performance shows whether planning,
implementation and execution as well as strategies provide fundamental improvements. The
financial aspect is good, it is expected that the company's long-term goals related to shareholder
welfare can be achieved. In essence, with a good financial aspect, this indicates the health of
the company's performance is good, thus creating a positive perception for consumers.
Customer Perspective. Service companies need marketing strategies that are in accordance with
the target market or market segment. Marketing strategies that can be used are digital marketing
strategies. Digital marketing strategies allow service companies to reach a wider market
segment. Consumers will feel satisfied when information related to the needs and desires of the
product brand is obtained quickly. Therefore, the existence of content through various social
media will help companies disseminate information, thereby shortening the purchase decision
process.
Internal Business Process Perspective. Service companies need to provide a value
proposition that is able to attract and retain customers in the desired market segment and satisfy
shareholders. Internal business processes can be implemented through Innovation processes,
operation processes, and after-sales services.
Learning and Growth Perspectives. Service companies need to provide the infrastructure
to achieve a financial perspective, a customer perspective, and a process perspective to generate
long-term growth and improvement. It is important for a company when investing not only in
equipment to produce products or services, but also investing in infrastructure, namely: human
resources, systems and procedures.

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