CIPS L4M2 Chapter 1 (1.3) Flashcards
Analyse the criteria that can be applied in the creation of a business case
What Criteria can be applied in the creation of a business case?
- Objective - The application of the ‘5 Whys’ analysis
- Options - generation of strategy options.
- Cost and benefits - cost benefit analysis
What are the three (3) trends that can help decide if an objective is strategic or not?
✳External trends (external to the organisation)
- trends in the global marketplace, economical and political factors, and the emergence of new markets and technologies.
✳Internal trends
- trends within organization and include the size and the complexity of the organization, roles, definitions and management styles.
✳Performance trends
- trends in the organizational growth, profitability and organizational
How does the business case show that a number of options were generated?
- Generating Strategy options- which can be carried out with a peer group using brain-storming or benchmarking strategies.
- Hybrid strategies - strategies that combine the best parts of two or more strategies.
Datum - list of the criteria (standards) that the strategies need to address, together with any data that measures the success of the current way of doing things
What is brainstorming?
- Brainstorming is a group discussion to produce ideas or solve problems.
What are the six (6) types of interventions to consider when brainstorming ways to create a breakthrough in a procurement business case?
- Market interventions - Competitive tendering, Make versus buy strategies, Supplier rationalisation programmes, New entrants
- Technical interventions - Simplifying specifications, Innovative technologies, Intellectual property rights.
- Cost structure interventions - Lean technique - a management process for reducing waste and thereby creating more value in a set of activities. •Six sigma technique - a management technique for identifying and reducing variability in any process. •Total cost of ownership. •Value analysis. •Value engineering - a review of an existing product with the aim of reducing cost and increase the value of the customer.
- Work process interventions - Joint planning, Collaborative process with the suppliers.
- Supplier relationship interventions - Leveraging or changing relationships with the suppliers to gain better access to supplier capabilities and ensure excellent supplier performance.
- Supply Chain interventions - Design the right supply chain eliminating unnecessary intermediaries (eliminating the middled man) or using outsourcing to gain expertise or scale for cost reductions.
What is a Cost Benefit Analysis?
- The comparison between costs and benefits of an option.
- A technique for deciding weather to follow a particular course of action based on its financial impact.
Its value is to show the financial consequence of the choice made and is carried out by adding up all of the financial benefits of the option and subtracting all of costs associated with it.
Costs may be one-off or ongoing -Tangible and intangible costs should be identified
Benefits are usually received over time - Financial and non-financial benefits
What is risk assessment?
- The process for identifying and dealing with any potential hazards that a project could face.
What criteria can be applied in Risk Assessment in a business case?
- List all of the potential sources of risk in terms of potential impact on the organisation if the risk event was to happen
- Assess the likelihood that risk event will happen
What are the elements of an Implementation plan?
- Allocation and agreement of roles and responsibilities
- Communication strategy that delivers the right message in the right medium to the right people
- Change management strategy
- Agreed specification
- Agreed procurement route
- Time allowance for writing tender documents
- Time allowance for managing the tender process
- Time allowance to agree on the criteria for choosing a supplier
- Time allowance for negotiation
- Time allowance for writing the contract
- Identification of all major tasks and dependencies in a formal plan
What is Change Management?
- The process, tools and techniques of dealing with the people aspect of change to achieve the business outcome required
What is Benchmarking?
- To evaluate (something) by comparison with a standard.
- A process by which a company compares its performance with that of high-performing organizations (Compare and Improvement Tool)
- A strategic analytic process of continuously measuring an organisation’s products, services and practices against a recognised leader in the studied area
What are the four (4) main types of Benchmarking?
- Internal benchmarking - business process is compared to a similar process in the same business
Example (same Organization different department) : Retail stores, select the best store as the benchmark or publc sector, a hospital • Benefits • Challenges
- Competitive benchmarking - product, service or processes is benchmarked against that of a direct competitor (Direct competitor-to-competitor comparison)
Example (other organization same industry) : Public sector compares the army and prisons or private sector two pharmaceutical companies • Benefits • Challenges
- Functional benchmarking - similar or identical practices are compared with those of an organization outside of the immediate industry sector
Example (same function different industry) : Government my compare tax collection against a credit card company collection processes. • Benefits • Challenges
- Generic benchmarking - compares unrelated business processes that can be carried out in a similar way, irrespective of the industry
Example (different function different industry) : Bar Code system to track luggage = grocery outlet’s bar code system • Benefits • Challenges (refer to table pg 51)
What is issues management?
- The process of identifying and resolving issues.
The process can be used to assess the importance and strategic nature of an objective developed by (Igor Ansoff) through: ✳External trends ✳Internal trends ✳Performance trends
