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Glossary of Business Terms
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Accounts Payable – money owed for goods or services a company or consultant received that has not yet been paid for Accounts Receivable –money due for goods or services a company or consultant rendered that has not been received Activity-Based Costing – calculates the cost of doing business through allocating costs to products and customer segments Agent – a person who finds you employment for a percentage of the earnings Asset – physical or intellectual property belonging to a company possessing financial value Bail-Out Clause – in a consulting contract, this provides either a termination or early-termination option with little to no penalty. Balanced Scorecard – a measurement tool used in strategy management consulting in order to visually communicate four indicators: internal business processes, customer, learning, and financial performance Balance Sheet – the financial document demonstrating a company’s assets and liabilities Barriers To Entry – details that make it difficult for a new company to compete against long-established companies in the field (i.e. trademarks, brand identity, copyrights, etc.) Benchmarking – measuring where a company currently is against where the company used to be (and where the company wants to be) Big 4 – refers to the multi-national accounting firms: Arther Anderson and Co. (AA), Price Waterhouse Coopers, Deloitte Touche Tohmatsu, and KPMG. Black Belt – a person who has mastered Six Sigma training (five week course) and demonstrates great financial benefit to a company. Bottleneck – a location in a chain of production or a process where production slows and causes a problem for progress Bottom Line – reference made to the final line on an income statement showing the total available income for shareholders in a company Brainstorming – a process of coming up with ideas without judging or choosing the best one Break-Even Point – a point a company reaches in order for income and expenses to be matched Burnout – the condition of being overworked or overly stressed out due to work Business Process – a process performed unrelated to manufacturing environments Business Process Outsourcing – the practice of hiring outside of the company for completion of a business process (i.e. hiring an accountant outside of the firm) Business Process Reengineering – the practice of creating a more streamlined and effective workflow by redesigning or improving business processes already in place Capital – the monetary investment needed in order to start or run a business Cash Flow – the movement of money in and out of a company Cash Flow Forecasting – determining the expected financial impact of an event Cause And Effect Analysis – the process of determining what causes are influencing undesired results that produce a diagram resembling a fishbone Change Management – the process of implementing transformations in a company, whether it be departmental, process, technological, etc. in an organized manner Client Site – the location where your client does business Company Culture – the employees’ shared practices and values Consultant – anyone offering their services to a client who is not an employee of the client company Consulting Agreement – a legal and binding document between a client and her consultant signed prior to initiation of work outlining fees and services Contingency Fees – when a consultant agrees to do x amount of work for y amount of money only when a specific outcome z has been reached – if the outcome is not reached, there is no payment Continuous Improvement – a commitment to work towards creating better business, products, and work environments Continuous Improvement Plan – a set of activities related to gradual improvement of a company’s processes Contractor – employees working for organizations whom are not employed by the organizations Cost/Benefit Analysis – a close examination of the expenditures and the profits that particular actions may be likely to bring about Crewing Schedule – a schedule demonstrating who is working, when they are working, and where they should be Critical Success Factors – critical success factors are those essential activity areas necessary for a project to be successful Cross Training – instruction on activities related to an individual’s current work so that they can participate in a greater spectrum of the company’s business Daily Rate – the amount charged per day including the cost of doing business Decision Tree Analysis – a structure that helps analyze risks and rewards involved with potentials for action Deming Cycle – also known as PDCA (Plan, Do, Check, Act), a process intended to promote continuous improvement Defects - errors in the line of production Definition – a project phase where the consultant and client determine the work to be done DMAIC – a process for project management using Six Sigma and Lean Six Sigma methods – define, measure, analyze, improve, and control Drill Down – a problem defining methodology that takes complex problems and breaks them into component parts Earnings Statement – a standard financial document for businesses summarizing the company’s income and expenses for a specific period Earnings Before Interest, Tax, Depreciation, And Amortization – (EBITDA) this is a report stating what the company would have earned should it have not had debt, taxes, etc. Emotional Intelligence – the idea that in order to lead well, one first must understand one’s emotions and the emotions of those one works with Empowerment – the idea that one should make those one is surrounded by accountable for their own actions within a specific sphere of influence Expenses – stemming from revenue generation, these are the costs of doing business Failure Mode And Effects Analysis – (FMEA) a report that identifies different ways an activity may not reach completion First Pass Yield – a measure of services or products that showed no defects the first time Fiscal Year – a period of twelve months usually beginning January 1 Five Why’s – an analysis meant to get to the core of a problem through asking the question, “why” until reaching the root causes Fixed Assets – any non-liquid assets that a company requires for its daily operations Fixed Costs – expenses that do not fluctuate (i.e. rent, salaries, etc) Flow Charts – visual breakdowns of individual steps in a process Force Majeure – a clause in a consulting agreement outlining events or conditions outside of a consultant’s control that could affect delivery of services or project completion Game Theory – based on the idea that there is a strategy for success in any circumstance or game Gantt Chart – A Gantt chart demonstrates what activities will occur when – also referred to as a project schedule Goals – measurable and objective expectations for a company’s progress towards a particular set of results Green Belt – a person with three weeks of Six Sigma training, devoting only a minority of time to individual projects Gross Profit – revenue from sales minus cost of goods sold Guerilla Marketing – a grassroots or alternative form of promotions requiring minimal investment Income Statement – financial document summarizing revenue and expenses of a company over a period Insider – someone with access to important company information Insider Trading – illegal activity based upon insider knowledge not available to the general public concerning the performance of a stock Intellectual Property – any patents, copyrights, trademarks, service marks, trade names, or trade secrets owned by a company or individual Impact Analysis – looks at the possible consequences an event might have and breaks things down to ensure that any event followed will have a positive outcome Implementation – a project phase where the plan is followed and the goods or services are rendered Job Enlargement – addition of tasks at the same level of responsibility and skills in order to alleviate boredom in employees Job Enrichment – an addition of tasks that increase the level of responsibility and skills required in employees Key Performance Indicators – measurements that have been agreed to before the undertaking of a project that reflect the parallel critical success factors Key Success Indicators – measurements agreed upon before the project undertaking reflecting critical success factors Knowledge Process Outsourcing – (KPO) this involves higher levels of outsourcing for business process completions Ladder Of Influence – this helps consultants to check any assumptions that may be held Lean Six Sigma – combines an elimination of all sources of waste while focusing on quality and improvement Letter Of Understanding – a formal letter outlining the terms of agreement between a consultant and a new client Liabilities – all financial obligations a company has that possess a negative value Long Term Assets – any non-liquid assets a company requires for its day-to-day operations Master-Servant Relationship – the relationship between employer and employee Metrics – sets of measurements for quantifying specified results Non-Disclosure Agreement – an agreement between a company and a client that allows for the sharing of intellectual property without worry of jeopardizing the information Objective – a step towards meeting a goal ‘On The Beach’ – periods where there are no clients for a consultant Opportunities - items with potential gains for a company Organization Development – a field dedicated to increasing the effectiveness of human systems Outsource – contract with an outside company to perform a given task Paradigm – a pattern or strongly held practice PDCA – Plan, Do, Check, Act – a cycle of project-related activities Per Diems – per day allowances when a consultant is away from home PEST Analysis – Political, Economic, Sociocultural, and Technical analysis determining the background for a given problem Porter’s Five Forces – an analysis performed to determine where a situation’s power lies – the five forces are: supplier power, customer power, threat of substitution, ease of new entry, and competitive rivalry Proactive – seeing something as logically the next step before it happens and taking action concerning it Programme Management – the business of monitoring a group of projects that relate to a company’s overall goals Project Management – the business of managing an activity requiring several steps in order to produce key deliverables or services Process Mapping – two or more symbols that have been strung together to demonstrate the flow of a given process Productivity – the collective of output per unit of input Relationship-Based Pricing – a competitive pricing model based upon segmenting populations into groups and setting prices based upon the groups Relationship Marketing – focuses on building relationships with key customers in order to bring business to an organisation Request For Proposal – sent when a company is interested in purchasing services or products and wants to solicit bids from companies Request For Quote – sent when a company is interested in purchasing goods or services and is interested in the price Retail Rate – the rate a client pays for a consultant’s services Retainer Fee – an amount of money a client pays in advance for securing a consultant or freelancer Return On Assets – (ROA) a measure of the profitability of a company Return On Investment – (ROI) a measure of the profitability of a company’s assets Revenue – money generated through a company’s services and goods, before expenses have been calculated Risk Analysis – the study of the various risks that may be involved in a given project Scenario Planning – the act of testing various solutions to a problem through enacting it against possible futures Scope Creep – changes in the definition of a project once the project has been defined Six Sigma – a methodology for improving processes and quality in a company’s output SME – small and medium sized enterprises Storyboard – a visual depiction to accompany a script of what will occur during a presentation Strategy – the plan developed by a company in order to achieve it’s goals Strengths – the things that a company does well Swim Lane Diagrams – allow for the mapping of interactions in a process SWOT Analysis – an investigation of an individual’s or company’s strengths, weaknesses, opportunities and threats
Team Building – the process of having a team complete some task together in order to prevent conflict and build synergy Threats – anything that can be considered a danger Total Quality Management - (TQM) this creates a situation where every individual takes responsibility for the final product’s quality Training Needs Analysis – (TNA) investigation of where to go when you need to find out information for a client Value Chain – a set of linked activities that create value in a product from the initiation until the delivery Value Chain Analysis – an analysis performed to determine where the value lies when attempting to solve a problem Variable Costs – costs that vary depending upon other factors Weaknesses - things a company does not do well Wholesale Rate – what you are paid by a broker or agent Work Flow Analysis – sequences work activities and undertakes an analysis of the effectiveness of the work being completed Working Capital – a company’s current assets minus all liabilities |
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