Billionaire and majority owner of the Dallas Mavericks, Mark Cuban, said this about Artificial Intelligence (AI): “AI, deep learning, machine learning – whatever you’re doing if you don’t understand it – learn it! Because otherwise, you’re going to be a dinosaur within three years.”
The Balanced Scorecard (BSC) Strategy framework is a powerful management tool that many companies use to create alignment between their organization’s vision and mission and their strategic organizational goals, often referred to as strategic themes . The BSC framework uses four perspectives to develop an organization’s strategy and measure its performance.
In recent years, leading organizations have started exploring the integration of AI into their BSC framework to improve performance measures and decision-making processes. Here’s how AI might be incorporated into each perspective to help improve an organization’s strategy execution.
1. Financial perspective
AI can help organizations improve financial performance by increasing the automation of tasks related to financial analysis, forecasting, and budget analysis, to name a few. AI-powered tools enable the use of real-time data, trend analytics, and the ability to provide insights into future performance by looking at vertical and horizontal analysis. AI tools also help leverage analysis, growth rates, and a multitude of others . Ultimately, AI has the potential to empower organizations to make better financial decisions that improve financial performance.
2. Customer perspective
The impact of AI on this perspective can provide analysis to improve the customer experience by providing personal recommendations and outlining interactions with a specific customer persona. One example would incorporate using AI-powered chatbots to interact with customers and provide personalized recommendations based on past interactions and preferences. As a result, the proper use of AI in this area could enhance the customer experience and increase loyalty, ultimately leading to higher revenues and organizational growth.
3. Internal processes perspective
Every organization wants to improve its internal processes to become more efficient, eliminate duplication and unnecessary steps, and better manage those processes. AI-powered tools have the potential to automate repetitive tasks, supply chain management, and supply chain logistics. Automating these functions can enable organizations to achieve the commonly found goals of this perspective, which are to do things faster, better, safer and cheaper.
4. Learning and growth perspective
AI-powered training tools can significantly Improve your employees’ performance and develop their talents. Employee skills can be better assessed with personalized, individually targeted training programs. This approach ensures that employees are provided training in the specific areas where it’s needed and that they don’t waste time training in areas where they’re already proficient, thus saving time and money.
In terms of strategy execution, AI can analyze vast amounts of data in real time, thus providing insights into key performance indicators (KPIs) tied directly to strategy execution. Additionally, AI can help improve forecasts and scenarios to better equip an organization to respond with agility and decisiveness in rapidly changing environments.
When AI is incorporated within a proven strategy framework such as the BSC, it can improve an organization’s ability to successfully execute its strategy by providing:
- Better data analysis
- Predictive analysis capabilities
- Improved resource allocation
- Process automation
- Personalized training and development
- Real-time performance monitoring
As AI technology continues to evolve, it‘s critical for organizations to continuously explore new ways to incorporate it into their strategy and operations or risk finding themselves on the endangered species list.
Do you need help developing a strategy framework that’s ready to embrace AI’s evolving future? We can help. Connect with us via email or call us at 919-460-8180.
Terry is Balanced Scorecard Institute's Director of Training and Senior Associate with over 30 years of experience working in both the private and public sectors.