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Using balanced scorecards for performance-based analytics

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One of the key imperatives of the Recovery Act is for Federal agencies to take concrete, proactive steps to ensure recipients of stimulus funds are spending the money responsibly, and in a manner that benefits taxpayers.  With $787 billion in taxpayers' dollars flowing into the economy in a short period of time, the potential for fraud, waste, and abuse is elevated.  It is important for the government to leverage analytic techniques that will allow officials to exercise reasonable oversight without getting bogged down in vast quantities of spending data.

The "Balanced Scorecard" is an example of one of these analytic techniques.  A balanced scorecard is a performance management tool used for aligning strategic objectives to operational metrics.  A balanced scorecard allows senior executives to rapidly identify areas of risk during execution of their strategic plan by identifying specific operational areas that are performing outside of established norms and parameters.

In the context of Recovery.gov, balanced scorecards can be used to provide a snapshot of prime recipient performance against desired program / economic outcomes. Each prime recipient can be scored in "green - yellow - red" fashion against a set of key performance indicators (KPI). KPIs are measures used to help an enterprise define and evaluate how successful it is.

In the Recovery.gov scenario, KPIs could be established for and mapped to Recovery Act Accountability Objectives established by law and policy.  For example, one of the Recovery Act Accountability Objectives defined in OMB Memorandum 09-15 is entitled "Program Outcomes and Economic Outcomes Achieved." Since a key economic outcome of the ARRA is job creation, a KPI could be established to measure cost per job creation.  Any grant program or recipient with an excessive cost per job creation could be identified through a balanced scorecard, and could then receive the appropriate level of management and oversight.

Within Recovery.gov, balanced scorecards could be created to evaluate agency, program, and prime recipient performance.  One could also create a balanced scorecard to look at stimulus performance on a per-state basis, to ensure fair distribution and use of stimulus funds on a geographic basis. Of course, once scorecard KPIs are established, data collection protocols might need to be tweaked to ensure sufficient data are being collected to support the analytics implemented by the scorecard.

There are numerous technologies, both commercial and open source, that can be used to implement the balanced scorecard features described in this article.  For example, Unisys has developed a Recovery Act reporting solution that implements four different types of "accountability scorecards:" Recipient scorecard, program scorecard, state scorecard, and agency scorecard. The Unisys Recovery Act reporting solution was developed using various open source technologies, and is designed to integrate well with Government web hosting environments.

Submitted by andyhoskinson from Unisys (Application Development) on Apr 27, 2009

This idea is now closed to further comments.

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3 Comments

Member comment

Having lived, created and read my share the corporate KPI charts I'm gunshy around the thought that complex practices can be reduced to Red-Yellow-Green indicators.

I think your message of ensuring consistency and honest reporting is foundation to many of the advancements we'd like to see in an open government.

Please take my skepticsm with a grain of salt it's just that I'm wary about the possibility this might be used for obscuring larger issues.

Comment from wjhuie on Apr 27, 2009
Member comment

It would be good if performance metrics were gathered and shared on agency Web sites in conformance with AIIM's emerging Strategy Markup Language (StratML) standard.

Comment from oambur at AIIM StratML Committee on Apr 27, 2009
Member comment

Balanced Scorecard (BSC) is a great direction-setting and performance-checking techniques.  I use it regulary.  However, BSC by itself is not enough to achieve the intentions of endeavors such as ARRA and the transparency intentions of ARRA.

If you think about any endeavor, it has two main parts: direection and control, or command and control for the military. 

BSC is a direction or command capability consisting of roughly: mission, vision, goals, success indicators (also called objectives, KPI, performance measures, etc.).  BSC does not address the actions taken to achieve those success indicators and thus reach those goals to achieve the mission as its perfect accomplishment was envisioned. 

See my public domain strategic management life cycle diagram at http://www.slideshare.net/royroebuck/strategic-management-spiral-life-cycle.  This life cycle identifies a 26 step strategic management life cycle process.  BSC only covers steps 4 through 8, and then takes the results of the other 22 "control" steps to determine whether performance was successful.

Everyone working with ARRA needs to follow, or link-to, a consistent management life cycle, with consistent management controls, all based on consistent underlying data structure and process models, all based on terms whose meanings and contexts are shared and broadly understood and accepted.  Without this consistency, all the diverse ARRA efforts will be fragmented, and thus beyond analysis, unmanageable, unmeasurable, untestable, and thus unusable.

Comment from RoyERoebuck at One World Information System on Apr 30, 2009