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CIPS L4M2 - Defining Business Need > Chapter 1.3 > Flashcards

Chapter 1.3 Flashcards

Analyse the criteria that can be applied in the development of a business case

1
Q

Name 2 considerations when preparing a business case

A
  1. Costs
  2. Benefits
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2
Q

Name 3 benefits that may be mentioned in a private sector business case

A
  1. Improved profitability
  2. improved ROI
  3. Shorter lead times
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3
Q

Name 2 benefits that may be mentioned in a public sector business case

A
  1. Improved service for tax payers
  2. Improved value for money or cost savings
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4
Q

When would a recommendation be proceeded in a business case

A

If the benefits outweigh the costs because it means the project is financially viable

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5
Q

Name a method of assessing whether an objective is important

A

Issues management

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6
Q

Issues management

A

The process of identifying and resolving issues

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7
Q

What are the three trends that help you decide if an objective is strategic or not?

A
  1. External trends
  2. Internal trends
  3. Performance trends
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8
Q

Hybrid strategies

A

Strategies that combine the best parts of two or more strategies

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9
Q

Name the 6 types of intervention to consider when brainstorming ways to create a business case

A
  1. Market interventions
  2. Technical interventions
  3. Cost structure interventions
  4. Work process interventions
  5. Supplier relationship interventions
  6. Supply chain interventions
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10
Q

Lean

A

A management process for reducing waste and thereby creating more value in a set of activities

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11
Q

Six Sigma

A

A quality management approach that focuses on improving processes, products or services through the identification and elimination of defects

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12
Q

Value analysis

A

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

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13
Q

Value engineering

A

A process used to review and amend new products to reduce costs and increase value to customers

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14
Q

Name 5 cost structure interventions

A
  1. Lean
  2. Six Sigma
  3. TCO
  4. Value analysis
  5. Value engineering
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15
Q

Name 3 examples of technical interventions

A
  1. Rationalising or simplifying specifications
  2. Innovative technologies
  3. Creating IP rights
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16
Q

Name an example of market interventions

A

Over and above bidding interventions through competitive tendering

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17
Q

Define work process interventions

A

An organisation attempts to create an advantage that delivers a breakthrough in costs or service by looking at external, collaborative processes with suppliers

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18
Q

Define supply chain interventions

A

Designing the right supply chain by either eliminating unnecessary intermediaries or using outsourcing to gain expertise or scale

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19
Q

What is the starting point for finding hybrid options

A

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

20
Q

Cost-benefit analysis

A

A technique for deciding whether to follow a particular course of action based on its financial impact

21
Q

What’s the value of a cost-benefit analysis

A

To show the financial consequence of the choice made

22
Q

How is the effect of time built into the cost-benefit analysis?

A

By calculating a pay back period

23
Q

Pay back period

A

The time it takes for the benefits of a change to repay its costs

24
Q

Switching costs

A

The costs incurred by a buyer when changing from one product or supplier to another

25
Q

Can intangible items be included in a cost-benefit analysis?

A

Yes but a value must be estimated for these

26
Q

Name 3 examples of less obvious costs

A
  1. Impact on health and safety
  2. Impact on the organisations reputation
  3. Environmental costs
27
Q

Name 1 way organisations can analyse their competitors

A

Benchmarking

28
Q

Define benchmarking

A

A strategic analytic process of continuously measuring an organisations products, services and practices against a recognised leader in the studied area

29
Q

Name 4 types of benchmarking

A
  1. Internal/departmental benchmarking
  2. Competitive benchmarking
  3. Functional benchmarking
  4. Generic benchmarking
30
Q

Define internal/departmental benchmarking

A

Where a business process is compared to a similar process in the same organisation

31
Q

Define competitive benchmarking

A

Where a product, service or process is benchmarked against that of a direct competitor

32
Q

Define functional benchmarking

A

Where similar or identical practices are compared with those of an organisation outside of the immediate industry sector

33
Q

Define generic benchmarking

A

Looks at unrelated business processes or functions in organisations regardless of the industry

34
Q

Name 7 benefits of internal benchmarking

A
  1. The most cost effective form of benchmarking
  2. Relatively easy to do
  3. Low cost to carry out
  4. Relatively fast to do compared with other types of benchmarking
  5. Provides good practise before moving to other forms of benchmarking
  6. Easy to transfer lessons learned
  7. Provides a deeper understanding of your own processes
35
Q

Name 7 challenges of internal benchmarking

A
  1. Can foster mediocrity
  2. Provides limited opportunities for growth
  3. Gives a lower level of performance improvement
  4. Can create an unhealthy atmosphere of competitiveness
  5. There may be internal bias
  6. May not give best in class comparisons
  7. Results are not much of a stretch beyond what is already achieved
36
Q

Name 5 benefits of competitive benchmarking

A
  1. Compares similar processes
  2. Gives a better understanding of a competitor
  3. Could be the basis for a potential partnership with the competitor
  4. A useful basis for planning and setting goals
  5. May provide a comparison with an organisation facing similar regulatory issues
37
Q

Name 5 challenges of competitive benchmarking

A
  1. Performance improvement might be low
  2. Can be perceived as a threat by either or both parties
  3. May be limited if there are intellectual property issues
  4. May not give best-in-class comparisons
  5. The competition may capitalise on an organisations weaknesses
38
Q

Name 3 benefits of functional benchmarking

A
  1. Provides industry trend information
  2. Comparisons are quantitative
  3. Improvement rates are generally better
39
Q

Name 4 challenges of functional benchmarking

A
  1. The two organisations may have diverse corporate cultures
  2. Organisations need to be very specific in describing processes and specifying the information needed
  3. Common functions can be difficult to find
  4. Takes more time that internal benchmarking
40
Q

Name 5 benefits of generic benchmarking

A
  1. A non-competitive and so non-threatening process
  2. Provides a broader and different perspective on a process
  3. Fosters innovation
  4. Examines multiple industries
  5. Can be used for global comparisons
41
Q

Name 5 challenges of generic benchmarking

A
  1. Can be difficult to identify best-in-class
  2. 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
  3. Difficult concept for some people to understand
  4. Takes a long time to plan
  5. Step changes in performance can be risky
42
Q

Name 6 sustainability factors to be included in a business case

A
  1. Use of technology throughout the project, to minimise paper transactions
  2. Procurement of raw materials
  3. Sustainability practices of suppliers
  4. Location of suppliers
  5. Logistical operations around the movement of goods
  6. End-of-life options for the asset, or materials to be procured
43
Q

Risk assessment

A

The process for identifying and dealing with any potential hazards that a project could face

44
Q

How should risks be graded in regards to impact?

A
  1. Minor
  2. Moderate
  3. Major
  4. Critical
45
Q

Name 5 examples of stakeholders who may need to be considered

A
  1. Finance departments
  2. Senior management or decision makers
  3. Teams directly responsible for undertaking activities within the business case
  4. IT departments
  5. External stakeholders such as suppliers
46
Q

Change management

A

The process, tools and techniques for dealing with the people aspect of change to achieve the business outcome required

47
Q

Name 11 elements of an implementation plan that may be checked

A
  1. Have roles and responsibilities been allocated and agreed
  2. Is there a communication strategy
  3. Is there a change management strategy
  4. Has the specification been agreed
  5. Has the procurement route been agreed
  6. Has sufficent time been allowed for writing tender documents
  7. Has sufficient time been allowed for managing the tender process
  8. Does the plan allow for time to agree the criteria for choosing a supplier
  9. Has sufficient time been allowed for any negotiations
  10. Has sufficient time been allowed for writing the contract
  11. Have all of the major tasks and dependencies been identified in a formal time plan

CIPS L4M2 - Defining Business Need (12 decks)

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