Linking Resource Allocation to the Balanced Scorecard

This chapter presents a method of linking the Balanced Scorecard to the budgeting process, and aligning spending with the strategy. A five-step process is presented to demonstrate how a series of cascaded Scorecards can drive the budgeting process in any organization. This five-step process consist of developing a plan; developing or refining the highest-level strategy map and balanced scorecard; developing cascaded balanced scorecards; compiling spending requests; and finalizing the budget. The link to budgeting appears when the monetary investments necessary to launch the initiative is calculated. Every initiative, no matter how big or small, will entail the allocation of resources. Budget requests should be based upon the resources required to effectively implement the initiatives, which in turn will drive the successful outcomes one is aiming for the performance targets. All initiatives should clearly document which local and high-level objective(s) they support, resources required to implement (both human and financial), dependencies with other initiatives, and key milestones.