| ABC | The following steps are part of what business process? 1. Identify Trigger 2. Define Process Flow (Current and Future) 3. Gather Cost Drivers 4. Compare Processes |
| ABC | Activity Based Costing |
| Calculates the Cost For ABC | The following formula does what? volume x time x cost |
| total process cost | For Activity Based Costing, this is the sum of all the BOXes, from the various cost centers. |
| TCO | Total Cost of Ownership - Analysis to find the lifetime costs of purchasing, operating and changing. NOT complete cost / benefits analysis |
| Trigger | "A car accident initiates a claim process" would be an example of what? |
| Cost Drivers | Time, Volume (per year), Cost (Resources per minute) |
| TCO | Economic Model is made of ... |
| Financial Model | Balancing between immediate costs and long term investments, includes ROI, NPV and ratios |
| Simple ROI | (Gain - Investment Costs) / Investment Costs. Financial metric of the value of a business investment |
| ROI | [Benefits - Costs / Costs + Risks] x 100 |
| Payback Period | [Investment Amount / Annual Cashflow] = How long it takes to recover the cost |
| Break Even Analysis | The Payback Peroid is also known as ____ |
| Payback | Most Popular Financial Modelling Tool |
| Net Present Value | Difference Between the cost of an investment and return on investment measured in today's $. NPV > 0; accept project |
| IRR | Internal Rate of Return |
| Internal Rate of Return | If IRR > Cost of Capital, ACCEPT project |
| NPV Formula | Sum of Each year of ([PV / ((1 + rate)^time)] - Capital Outlay ) |
| TCO | Centralize Support, have education and training, streamline purchasing, standardize technology, strat. alignment lowers what? |
| Business Case | Business objectives, Opportunites / Threats, Proposed Actions, Constraints |
| Business Case Methods | Define scope of a project, define scope of product / solution, scenario analysis, major assumptions, Economic Model, Estimated Benefits |
| Cost and Benefit Analysis | Using the Payback periods, NPV, and ROI creates a... |
| Risk Analysis | Identify Risks, gauge probability, estimate impact, find strategy |
| Portfolio Management | When an asset is held in a portfolio it is less risky then held in isolation. This is part of ______ |
| Expected Return | Weighted Average = (Rate of Return on Portfolio * Rate of Return on Stock ) for each asset in the portfolio generates what measurement? |
| Aligning Business and IT | Business has multiple and competing goals and strategies; business constantly adopting; it capabilities take time to build. How does one accomplish this? |
| Aligning Business and IT | The following steps are associiated with which process? 1. Business Goals and Strat. 2. IT Goals and Strat. 3. It Investment Portfolio 4. Infrastructure |
| Why companies invest in IT | 1. Informational 2. Strategic 3. Transactional 4. Infrastructural |
| Strategic | Increase sales, market position: SUSTAINABLE COMPETITIVENESS |
| Informational | Increase Control, Better Info and Integration: BETTER DECISION MAKING |
| Transactional | Cut costs / Increase throughput: IMPROVE EFFICIENCY |
| Infrastructure | Business Integration / Standardization: MAXIMIZE ROI AND FLEXIBILITY |
| Life Cycle of IT | 1. Form Strategic Initiative (increase sales) 2. Then Informational (better management) 3. Transactional (Reduce Costs) 4. Infrastructure (shared service for industry) |
| Strategic Context | Strategic Intent, Current Strategy, Business Goals (SCB) |
| Strategic Intent | Specification of long term, stable goals |
| Current Strategy | How a firm specifies it will do business today |
| Business Goals | From SI and CS |
| Alignment | Harmony between IT portfolio and 3 constructs of strategic context |
| Reach | Single BU --> Anyone Anywhere |
| Range | Send Message / Access to Data / Simple Transaction / Complete Transaction |
| Strength | SWOT: Attributes of an organization that are helpful to fulfill an objective. |
| Weakness | SWOT: Attributes of an organization that are harmful to an objective. |
| Strengths, Weaknesses | SWOT: Internal-based conditions of an organization. |
| Internal | SWOT: Strengths and Weaknesses are this. |
| Opportunities | SWOT: External conditions helpful to achieving the objective |
| Threats | SWOT: External conditions harmful to achieving the objective |
| Opportunities, Threats | SWOT: External-based conditions of an objective |
| External | SWOT: Opportunities and Threats are this. |
| Primary | PVC: Inbound Logistics, Processing, Distribution, Sales / Marketing, Service |
| Secondary | Human Resources, Partnerships, Technology, Firm Infrastructure |
| Inbound Logistics, Processing, Distribution, Sales / Marketing, Service | PVC: The primary cost centers. |
| Human Resources, Partnerships, Technology, Firm Infrastructure | PVC: The secondary cost centers. |
| substitute products, new entrants, competitive rivalry, bargaining power of suppliers, bargaining power of consumers | P5F: The Five Forces. |
| No | When a car part company controls much of the industry, is it an attractive industry to enter for a car company? |
| Suppliers | When a car part company controls much of the industry, what power is there? |
| Threat of New Entrants | Profitable markets create attraction to other companies. This is from: |
| Cost Leadership | PGS: This strategy is all about efficiency, the production of large amounts of standardized products. |
| Differentiation | PGS: This strategy is about creating a product perceived as unique, and this uniqueness adds value to the consumer. |
| Segmentation | PGS: This strategy is focused on a few select markets. Focus / Niche strategy. Small firms. |