Chapter 1.3 Flashcards
Analyse the criteria that can be applied in the development of a business case
Name 2 considerations when preparing a business case
- Costs
- Benefits
Name 3 benefits that may be mentioned in a private sector business case
- Improved profitability
- improved ROI
- Shorter lead times
Name 2 benefits that may be mentioned in a public sector business case
- Improved service for tax payers
- Improved value for money or cost savings
When would a recommendation be proceeded in a business case
If the benefits outweigh the costs because it means the project is financially viable
Name a method of assessing whether an objective is important
Issues management
Issues management
The process of identifying and resolving issues
What are the three trends that help you decide if an objective is strategic or not?
- External trends
- Internal trends
- Performance trends
Hybrid strategies
Strategies that combine the best parts of two or more strategies
Name the 6 types of intervention to consider when brainstorming ways to create a business case
- Market interventions
- Technical interventions
- Cost structure interventions
- Work process interventions
- Supplier relationship interventions
- Supply chain interventions
Lean
A management process for reducing waste and thereby creating more value in a set of activities
Six Sigma
A quality management approach that focuses on improving processes, products or services through the identification and elimination of defects
Value analysis
Process of analysing costs to identify cost reduction and cost control opportunities to ensure that a product or service production costs are as efficiently as possible in order to maximise profit
Value engineering
A process used to review and amend new products to reduce costs and increase value to customers
Name 5 cost structure interventions
- Lean
- Six Sigma
- TCO
- Value analysis
- Value engineering
Name 3 examples of technical interventions
- Rationalising or simplifying specifications
- Innovative technologies
- Creating IP rights
Name an example of market interventions
Over and above bidding interventions through competitive tendering
Define work process interventions
An organisation attempts to create an advantage that delivers a breakthrough in costs or service by looking at external, collaborative processes with suppliers
Define supply chain interventions
Designing the right supply chain by either eliminating unnecessary intermediaries or using outsourcing to gain expertise or scale
What is the starting point for finding hybrid options
To list the criteria that the strategies need to address, together with any data that measures the success of the current way of doing things in meeting those criteria
Cost-benefit analysis
A technique for deciding whether to follow a particular course of action based on its financial impact
What’s the value of a cost-benefit analysis
To show the financial consequence of the choice made
How is the effect of time built into the cost-benefit analysis?
By calculating a pay back period
Pay back period
The time it takes for the benefits of a change to repay its costs
Switching costs
The costs incurred by a buyer when changing from one product or supplier to another
Can intangible items be included in a cost-benefit analysis?
Yes but a value must be estimated for these
Name 3 examples of less obvious costs
- Impact on health and safety
- Impact on the organisations reputation
- Environmental costs
Name 1 way organisations can analyse their competitors
Benchmarking
Define benchmarking
A strategic analytic process of continuously measuring an organisations products, services and practices against a recognised leader in the studied area
Name 4 types of benchmarking
- Internal/departmental benchmarking
- Competitive benchmarking
- Functional benchmarking
- Generic benchmarking
Define internal/departmental benchmarking
Where a business process is compared to a similar process in the same organisation
Define competitive benchmarking
Where a product, service or process is benchmarked against that of a direct competitor
Define functional benchmarking
Where similar or identical practices are compared with those of an organisation outside of the immediate industry sector
Define generic benchmarking
Looks at unrelated business processes or functions in organisations regardless of the industry
Name 7 benefits of internal benchmarking
- The most cost effective form of benchmarking
- Relatively easy to do
- Low cost to carry out
- Relatively fast to do compared with other types of benchmarking
- Provides good practise before moving to other forms of benchmarking
- Easy to transfer lessons learned
- Provides a deeper understanding of your own processes
Name 7 challenges of internal benchmarking
- Can foster mediocrity
- Provides limited opportunities for growth
- Gives a lower level of performance improvement
- Can create an unhealthy atmosphere of competitiveness
- There may be internal bias
- May not give best in class comparisons
- Results are not much of a stretch beyond what is already achieved
Name 5 benefits of competitive benchmarking
- Compares similar processes
- Gives a better understanding of a competitor
- Could be the basis for a potential partnership with the competitor
- A useful basis for planning and setting goals
- May provide a comparison with an organisation facing similar regulatory issues
Name 5 challenges of competitive benchmarking
- Performance improvement might be low
- Can be perceived as a threat by either or both parties
- May be limited if there are intellectual property issues
- May not give best-in-class comparisons
- The competition may capitalise on an organisations weaknesses
Name 3 benefits of functional benchmarking
- Provides industry trend information
- Comparisons are quantitative
- Improvement rates are generally better
Name 4 challenges of functional benchmarking
- The two organisations may have diverse corporate cultures
- Organisations need to be very specific in describing processes and specifying the information needed
- Common functions can be difficult to find
- Takes more time that internal benchmarking
Name 5 benefits of generic benchmarking
- A non-competitive and so non-threatening process
- Provides a broader and different perspective on a process
- Fosters innovation
- Examines multiple industries
- Can be used for global comparisons
Name 5 challenges of generic benchmarking
- Can be difficult to identify best-in-class
- Those industries that are generally known as best-in-class get inundated with requests and so may not be open to working with new organisations
- Difficult concept for some people to understand
- Takes a long time to plan
- Step changes in performance can be risky
Name 6 sustainability factors to be included in a business case
- Use of technology throughout the project, to minimise paper transactions
- Procurement of raw materials
- Sustainability practices of suppliers
- Location of suppliers
- Logistical operations around the movement of goods
- End-of-life options for the asset, or materials to be procured
Risk assessment
The process for identifying and dealing with any potential hazards that a project could face
How should risks be graded in regards to impact?
- Minor
- Moderate
- Major
- Critical
Name 5 examples of stakeholders who may need to be considered
- Finance departments
- Senior management or decision makers
- Teams directly responsible for undertaking activities within the business case
- IT departments
- External stakeholders such as suppliers
Change management
The process, tools and techniques for dealing with the people aspect of change to achieve the business outcome required
Name 11 elements of an implementation plan that may be checked
- Have roles and responsibilities been allocated and agreed
- Is there a communication strategy
- Is there a change management strategy
- Has the specification been agreed
- Has the procurement route been agreed
- Has sufficent time been allowed for writing tender documents
- Has sufficient time been allowed for managing the tender process
- Does the plan allow for time to agree the criteria for choosing a supplier
- Has sufficient time been allowed for any negotiations
- Has sufficient time been allowed for writing the contract
- Have all of the major tasks and dependencies been identified in a formal time plan
