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How To Create A Balanced Scorecard In Excel

Creating a Balanced Scorecard in Excel is a bright idea, but only under the right conditions. This template will help you get started.

Andy, Senior Product Manager, leverages his 7+ years of performance management experience to ensure that ClearPoint customers have the features they need in ClearPoint's strategic planning software.

Creating a Balanced Scorecard (BSC) is one of the best strategic moves an organization of any size can make. If you’re beginning to look into scorecarding for your organization, you’re likely trying to figure out what tool to build it in, and Excel (or another spreadsheet tool) is on your list. This is a great, cost-effective option for many companies that are just getting started with a BSC. 

Below, we’ll point out your best options for Balanced Scorecard management, describe the pros and cons of creating your Balanced Scorecard in Excel, building it yourself, or using software, and explain how you can get started as soon as possible.

First, make sure to download our easy-to-follow Balanced Scorecard Excel Template

Choices For Balanced Scorecard Creation & Management

Before deciding what medium you want to use to create your Balanced Scorecard, you need to look at all your options. The most typical options are to purchase scorecarding software, build your own software or scorecarding solution, or use Excel or PowerPoint. Each option has it’s benefits and drawbacks—let’s examine each:

Software: One of the most important questions to keep in mind when looking for reporting software is whether the benefits will outweigh the costs. Purchasing software that can provide a positive ROI is a must—and achieving a great return on investment is an attainable goal. Also, keep in mind that there are certain things you should demand from your reporting software vendor, like excellent support and great customer service. All in all, software helps organizations that are more mature in their management processes.

Build Your Own: There are a lot of considerations that need to be examined if you’re considering building a scorecard solution. You need to examine:

  • Whether you have the adequate support to maintain the software.
  • If you have the time and resources to build out the necessary features.
  • If you’re accounting for all the expenses that building your own solution can incur.
  • If your team can handle the implementation and upkeep process.
  • What your “exit strategy” is if things don’t work out as planned.

(All of these important questions are answered in this in-depth article: Should You Build Or Buy Management Reporting Software?)

should you buy software, build software, or use excel for reporting

Excel & PowerPoint: There are three types of companies that can benefit from creating and managing their Balanced Scorecard in Excel:

  1. Very small firms. While this definition varies, we’re talking specifically about organizations who net less than a million dollars a year. If this is true of your organization, Excel is a good place to be.
  2. Pilot projects. If you are looking to show a “proof of concept,” or demonstrate that the Balanced Scorecard is still relevant and can benefit your organization, Excel is the best place to start.
  3. Companies that are transitioning. If your business is transitioning from one system to the next, or if you’re just getting your scorecard up and running and have a lot of changes to make, an Excel Balanced Scorecard may be the ticket.

As we mentioned previously, Excel is often lauded as being a cost-saving option. But beware that there are a few hidden costs associated with Excel reporting that you should keep in mind before creating your scorecard, especially if you're planning on tracking your initiatives in detail as well as your KPIs.

So, while it can work for the aforementioned three situations, it’s important to note that creating a Balanced Scorecard in Excel can go wrong when a lot of people get involved or if the scorecard becomes complex. It’s imperative that you only have a single author so your team stays on the same version of the scorecard. If this doesn’t happen—and you have many people making changes at the same time—you can end up creating a costly nightmare.

Balanced Scorecard excel template with objectives and measures

Excel vs. Google Sheets

When we talk about Excel above, we really mean a spreadsheet tool. Many organizations also use Google Sheets to manage their spreadsheets and information. So if you've decided that a spreadsheet and presentation tool is the best route for you, here's some background information to help decide between Excel and Google Sheets.

Google Sheets

The following benefits are unique to Google Sheets:

  • Simple sharing is a huge benefit to Google Sheets. If you are sending out your spreadsheet to anyone within your organization, Google Sheets’ “Share” feature is easy to find and automatically sends a notice to the email you’ve shared it with.
  • Collaboration is made simple in Google Sheets. As the author of a spreadsheet, you can decide how much access everyone has (i.e. whether they can just view or edit), and collaborate in real-time with your team.
  • Cloud storage is nice—you can access this from anywhere without having to have a program downloaded.
  • Google Sheets autosaves every change you make, so you never have to worry about losing new data if your computer crashes.
  • Version control isn’t an issue for Google Sheets. Every change from every editor is saved, and if need be, you can revert back to a previous version of the document.

The primary downfall of Google Sheets is that it is over 20 years behind Excel, and doesn’t yet host the same amount of functionality. Additionally, Google Sheets can’t handle near the amount of data that Excel can (and will slow to a crawl if you try). Charting and graphing capabilities are extremely limited, which makes visual presenting difficult.

Before you decide on Google Sheets, ask yourself this: Am I going to use my spreadsheets to organize and maintain a simple data list, which will be edited and shared with many people? If the answer is yes, Google Sheets is likely a better choice than Excel.

Excel

The following benefits are unique to Excel:

  • Established 21 years before Google Sheets, Excel has had years to perfect their software and build in powerful tools.
  • Excel offers advanced functionality for complex model-building and data manipulation.
  • Excel has more keyboard shortcuts than Google Sheets, which helps users save time when they create, inspect, and debug formulas.
  • Excel is powerful and can process tens of thousands of lines of data.
  • The processing speed of Excel is very quick, which leads many users to select this software.
  • There are more data visualization options offered by Excel than Google Sheets. Newer versions of Excel can create and format a plethora of charts, which is useful for reporting presentations.

The primary downfall of Excel is the lack of version control. You have to save all new versions, and when you send out the document for collaboration or editing, you have to cross your fingers and hope you have the most updated file. You’ve probably been in a situation where you rush to send out, say, “Revenue-By-City-V4.xlsl” right before a meeting. An hour later it dawns on you that the most current version––also named “Revenue-By-City-V4.xlsx”––is sitting on your desktop. For more information on how using Excel can have some time-sucking or dangerous repercussions, check out this infographic.

Before you decide on Excel, ask yourself this: Am I using this spreadsheet for a complicated, formula-heavy model that would benefit from a great deal of advanced functionality? If so, Excel is probably a better option than Google Sheets.

Getting Started With The Balanced Scorecard

Nine out of 10 organizations fail to execute strategy. That’s a big deal! So, it’s much more important to create a mediocre (or even bad) strategy that gets executed on than it is to create a great strategy without any execution whatsoever. So before you decide where you want to manage your scorecard, it’s important to understand the processes you’ll need to go through as an organization to create one.

This 41-Page Strategy Execution Toolkit is a great resource to get you started. It’ll help you understand how to define and identify your measures and initiatives, and walk you through the process of creating a purpose statement, change agenda, and strategy map. If you want to learn more about what a good Balanced Scorecard should look like, take a look at this exhaustive Balanced Scorecard example. I’ll walk you through definitions for scorecarding shop talk and explain exactly how you can read a completed scorecard.

Get Started With Your Excel Balanced Scorecard

By now, you’ve likely determined which scorecard building route is ideal for your company. If you’re interested in going forward with creating your scorecard in Excel, we’ve outlined a simple, one-page, “fill in the blank” style template for your scorecarding needs. It comes complete with instructions and cautions, so you fill out and manage your Balanced Scorecard correctly the first go-around. Click the link below and get started now. If software is your chosen route, come talk to us! We'd love to chat about what tool is a best fit for you. 

How To Create A Balanced Scorecard In Excel