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Glossary of Business Terms



Accelerated Learning – consists of techniques allowing information to pass more quickly from an instructor to a student

 

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 Improvementa 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 Traininginstruction 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


 

Paradigma 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

Revenuemoney 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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