Governance of Enterprise IT (CGEIT) Certification Practice Exam

What does a Balanced Scorecard (BSC) enable for a business?

1. Focus exclusively on financial metrics

2. Drive strategies based on measurement and follow-up

3. Enhance employee performance through evaluations

4. Oversee external audits effectively

The correct answer is: Drive strategies based on measurement and follow-up

A Balanced Scorecard (BSC) is a strategic planning and management tool that allows an organization to translate its vision and strategy into actionable objectives. By focusing on measurement and follow-up, the BSC facilitates communication and understanding of business goals among all employees. It provides a framework that incorporates various perspectives—financial, customer, internal business processes, and learning and growth—ensuring a more holistic view of business performance. This multidimensional approach allows organizations to align day-to-day operations with long-term strategy while continually assessing their progress towards achieving those objectives. Focusing solely on financial metrics would not capture the complete health of an organization, as it neglects other vital areas such as customer satisfaction and internal processes. While enhancing employee performance is important, the BSC's primary strength lies in how it drives strategy through comprehensive measurement rather than just evaluations. Oversight of external audits is also a distinct function that does not align with the main purpose of the BSC, which is to enable internal strategic management rather than external compliance evaluations.