The Balanced Scorecard Ontology: A Semantic Approach to Enhance Strategy Management

The Balanced Scorecard, developed in 1992 by Kaplan and Norton, has evolved into a communication and strategy execution system widely adopted by organizations across various industries. This article explores the use of an ontology to bridge the gap between strategy management and data within the Balanced Scorecard framework. The Balanced Scorecard Ontology is introduced to store, validate, and analyze knowledge, containing information about the Strategy Map and Quantification Frameworks, essential for evaluating the strategy execution. The proposed ontology is designed, developed, and evaluated using competency questions, and further validated by an online tool. Specifically, the proposed formalization of the Balanced Scorecard framework provides a semantic layer aimed at facilitating an effective Balanced Scorecard implementation, enabling accurate, traceable, and continuous monitoring and improvement of the strategy execution, based on a data-driven approach. The formalization of this knowledge through an ontology encompasses several advantages, such as improved interoperability and validation of the framework's elements, inference of new knowledge, and enhanced communication between different stakeholders. Additionally, managerial implications include ensuring alignment between the Balanced Scorecard and organizational goals, supporting compliance and governance efforts, improving communication and knowledge transfer, enhancing the strategic decision-making process, and facilitating the integration of data into the Balanced Scorecard.