Consulting Terms

QFD Technical Requirements

(Quality Function Deployment) Evaluate how well customer requirements have been met compared to the competition

When to use Management Procurement

-Contractor hired to manage entire project -Fees are paid by contractor -Benefits a client who cares about quality, time and key objectives

intercept term in macroeconomic model

= stock's expected return

Present Value

=(Future Value)/(1 + i)^t

Charts used in quality control

Histograms, Pareto charts, and scatter diagrams, used in quality control

View from 30,000 feet

Seeing a situation from a wider perspective after considering all relevant factors and thinking strategically.

brownfield investment

foreign direct investment in an existing industrial setting (repurposing)

Design and Manage

Similar strategy to management contracting Contractor paid fee to manage and assume responsibility, not only for the works and contractors but also for the design and design team

In selecting the method(s) of inquiry there are 6 potential methods described. Which method is good for large numbers of people?

Survey

restricted stock

units of stock with restrictions on when they can be sold, usually issued as partial compensation for employees and directors and usually lifts in 3 to 5 years when the stock vests

Simple

not Complicated

On the Beach

not currently staffed on a client project

focused

not global

brief

not lengthy

Workstream

one section of an overall client project

Growth and increasing sales - increase volume

- Expand # of dist channels - Increase product line through diversification (particularly with products that won't cannibalize) - Analyze the segments of the business that have the highest future potential Invest in a marketing campaign - Acquire competitor (esp if question is about increasing market share) - Adjust prices (lower --> increase volume, raise --> decrease demand, increase profits) - Create seasonal balance (increase sales in every quarter [nursery: sell flowers in spring, herbs in summer, pumpkins in fall, garlands/trees in winter]) - Find niches in developing industries with high barriers to entry (less competition, more notice if someone is trying to enter)

Why's it important to manage scope

- Failure to manage scope is a leading cause of project failure - ensures team is working within their resource parameters

Kick-off meeting

- Gain support for the project - Engage stakeholders so they can resolve any questions or issues before project planning

Prices are stable only when three conditions are met:

- Growth rate for all competitors is approximately the same - Prices are paralleling costs - Prices of all competitors are of ~equal value

We should never collude with the client to?

- Help them avoid responsibility - Play down the impact that difficult relationships have on the problem

Pick 2 of the guidelines for selecting what to highlight to the client after collecting all the data.

- Items that are clearly important to the organization - Items that the client has control over changing

Describing the concerns that began the process, where the change effort is at, and what the organization needs is an example of doing what?

- Opening with transparent purpose and leveling the playing field

If case includes decline-in-sales problem, analyze:

- Overall declining market demand - Possibility that current marketplace is mature/product is obsolete - Loss of market share due to substitutions

Keys for a successful project meeting

- Project sponsor should introduce the project: introduce stakeholders -Review roles and responsibilities of stakeholders -Review elements from project charter: project objectives, business case, projected timeline, funding status, deliverables - Discuss project organizational structure - Dedicate a staff person to support the meeting

Growth and increasing sales - company questions

- Size - Resources - Products

The book recommends giving the data and recommendations in the first 20% of the meeting why?

- So that you get to the point and to the recommendations quickly - So that you have enough time to deal with their resistance

Project Success Factors

- Strong Executive Support - Plenty of User Involvement - An Experienced Project Manager - Clear Business Objectives

Case steps

- Summarize question - What constitutes success, including any other objectives I should know about? - Ask clarifying questions - Label case, lay out structure - State hypothesis

Pricing strategies - steps

- Take notes - Repeat/verify question - Objective: profits, market share or brand positioning? - What constitutes success to the client, including any other objectives I should know about? - Hypothesis - Investigate company - Investigate product - Determine pricing strategy

Growth and increasing sales - steps

- Take notes - Repeat/verify question - What constitutes success to the client, including any other objectives I should know about? - Hypothesis - Company - Industry - Strategy to grow/increase sales --- Increasing sales =/= necessarily increasing profits

Entering a new market - steps

- Take notes - Repeat/verify question - Why does the company want to enter this market? - What constitutes success to the client, including any other objectives I should know about? - Hypothesis - Questions about the company - Current and future market - Investigate market to see if entry makes sense - Recommendation - Ways to enter - Recommendation

M&A - steps

- Take notes - Repeat/verify question - Why does the company want to merge/acquire? - What constitutes success to the client, including any other objectives I should know about? - Lay out objectives - General questions - Hypothesis - Price questions - Due diligence questions - Exit strategies questions - Recommendation + risks and next steps + "We can help you with that"

Risk transfer

- accomplished through an insurance policy - a deductible in an insurance policy means the insured is bearing some of the risk of loss and thereby (partially) self-insuring

Non-financial risks

- arise from actions within an entity or from external origins, such as the environment, the community, regulators, politicians, suppliers, and customers - consist of a variety of risks - settlement risk, operational risk, legal risk, regulatory risk, accounting risk, tax risk, model risk, tail risk, and sovereign or political risk

Market risk

- arises from movements in stock prices, interest rates, exchange rates, and commodity prices

Hedge Funds

- available only to accredited investors and are exempt from most reporting requirements - different hedge fund strategies exist - typical annual fee structure is 20% of excess performance plus 2% assets under management

Jensen's alpha

- based on systematic risk (beta) rather than total risk - measure of percentage returns in excess of those from a portfolio that has the same beta but lies on the SML

Asset classes

- building blocks of an asset allocation - an asset class is a category of assets that have similar characteristics, attributes, and risk-return relationships - investors have distinguished cash, equities, bonds, and real estate as the major asset classes

Load funds

- charge either up-front fees, redemption fees, or both

Mutual Funds

- combine funds from many investors into a single portfolio that is invested in a specified class of securities or to match a specific index - many varieties exist, including money market funds, both funds, stock funds, and balanced (hybrid) funds - open-ended shares can be bought or sold at the net asset value - closed-ended funds have a fixed number of shares that trade at a price determined by the market

Risk infrastructure

- comprises the resources and systems required to track and assess the organization's risk profile

risk of a two-asset portfolio

- dependent on the proportions of each asset, their standard deviations and the correlation (or covariance) between the asset's returns - as the number of assets in a portfolio increases, the correlation among asset risks becomes a more important determinate of portfolio risk

tips to control scope creep

- ensure team knows project scope - Understands the importance of detecting activities, events, or statements that violate project scope, and informing the project manager for immediate attention

Sharpe Ratio

- excess returns per unit of portfolio risk and higher Sharpe ratios indicate better risk-adjusted portfolio performance - the Sharpe ratios of all portfolios along the CML are the same - Because the Sharpe ratio uses total risk, rather than systematic risk, it accounts for unsystematic risk that the portfolio manager has taken - Sharpe ratio is the slope of the CAL for the portfolio and can be compared to the slope of the CML, which is the Sharpe ratio for any portfolio along the CML

Conditional Var (CVaR)

- expected value of a loss, given that the loss exceeds a minimum amount - relating it to VaR, the CVaR would be the expected loss, given that the loss was at least 200 million euros. It is calculated as the probability-weighted average loss for all losses expected to be at least 200 million euros - CVaR is similar to the measure of loss given default that is used in estimating risk for debt securities

Risk drivers

- fundamental global and domestic macroeconomic and industry factors that create risk

Common measures of risk

- include standard deviation or volatility; asset-specific measures, such as beta or duration - derivative measures, such as delta, gamma, vega, and rho - tail measures such as value at risk, CVaR and expected loss given default

Open-end fund

- investors can buy newly issued shares at the NAV - newly invested cash is invested by the mutual fund managers in additional portfolio securities - investors can redeem their shares (sell them back to the fund) at NAV as well - all mutual funds charge a fee for the ongoing management of the portfolio assets, which is expressed as a percentage of the net asset value of the fund

Constraints when constructing a portfolio

- liquidity requirements - time horizon - regulatory requirements - tax status - unique needs

Risk-averse investors

- make investment decisions based on the risk-return trade-off, maximizing return for the same risk, and minimizing risk for the same return - concerned by deviations from a normal return distribution and from assumptions of financial markets' operational efficiency

Duration

- measure of the price sensitivity of debt securities to changes in interest rates

Standard Deviation

- measure of the volatility of asset prices and interest rates - standard deviation may not be the appropriate measure of risk for non-normal probability distributions, especially those with negative skew or positive excess kurtosis (fat tails)

Beta

- measures the market risk of equity securities and portfolios of equity securities - measure considers the risk reduction benefits of diversification and is appropriate for securities held in a well-diversified portfolio, whereas standard deviation is a measure of risk on a stand-alone basis

Global minimum-variance portfolio

- portfolio on the efficient frontier that has the least risk

Separately Managed Accounts

- portfolios managed for individual investors who have substantial assets - in return for an annual fee based on assets, the investor receive personalized investment advice

Efficient Frontier

- portfolios that have the greatest expected return for each level of risk (standard deviation) make up the efficient frontier - the efficient frontier coincides with the top portion of the minimum-variance frontier - a risk-averse investor would only choose portfolios that are on the efficient frontier because all available portfolio with that are not on the efficient frontier have lower expected returns than an efficient portfolio with the same risk.

Minimum-variance portfolio

- portfolios that have the lowest standard deviation of all portfolios with a given expected return - together they make up the minimum-variance frontier

Risk can be modified

- prevention and avoidance - risk transfer (insurance) - risk shifting (derivatives)

M-square (M^2)

- produces the same portfolio rankings as the Sharpe ratio but is stated in percentage terms

Closed-end funds

- professionally managed pools of investor money that do not take new investments into the fund or redeem investor shares - the shares of a closed-end fund trade like equity shares (on exchanges or over-the-counter) - the portfolio management firm charges ongoing management fees

Strategic asset allocation

- results from combining the constraints and objectives articulated in the IPS and capital market expectations regarding the asset classes - as time goes on, a client's asset allocation will drift from the target allocation and the amount of allowable drift as well as a rebalancing policy should be formalized

Leveraged return

- return to an investor that is a multiple of the return on the underlying asset

Assumptions of CAPM

- risk aversion : to accept a greater degree of risk, investors require a higher expected return - utility maximizing investors : investors choose the portfolio, based on their individual preferences, with the risk and return combination that maximizes their (expected) utility - frictionless markets : there are no taxes, transaction costs, or other impediments to trading - One-period horizon: all investors have the same one-period time horizon - homogeneous expectations: all investors have the same expectations for assets' expected returns, standard deviation of returns, and returns correlations between assets - divisible assets: all investments are infinitely divisible - competitive markets: investors take the market price as given and no investor can influence prices with their trades

Liquidity Risk

- risk that as a result of degradation in market conditions or the lack of market participants, one will be unable to sell an asset without lowering the prices to less than the fundamental value - a.k.a transaction cost risk -arises from the uncertainty of the spread

Risk mitigation internally

- self-insurance (ie. setting up reserve fund to cover losses) - diversification

Capital Market Line (CML)

- special case of the capital allocation line, where the efficient portfolio is the market portfolio - obtaining a unique optimal risky portfolio is not possible if investors are permitted to have heterogeneous beliefs because such beliefs will results in heterogeneous asset prices - investors can leverage their portfolios by borrowing money and investing in the market - under the assumption of homogeneous expectations, this optimal CAL for all investors is termed the capital market line (CML)

Two-fund separation theorem

- states that all investors' optimum portfolios will be made up of some combination of an optimal portfolio of risky assets and the risk-free asset - the line representing these possible combinations of risk-free assets and the optimal risky asset portfolio is referred to as the capital allocation line - allows us to separate decision making into two steps - 1) the optimal risky portfolio and the capital allocation line are identified, which are the same for all investors 2) investor risk preferences enable us to find a unique optimal investor portfolio for each investor

CML vs. SML

- the CML uses total risk=standard deviation of portfolio on the x-axis - only efficient portfolios will plot on the CML - the SML uses beta (systematic risk) on the x-axis, so in a CAPM world, all properly priced securities and portfolios of securities will plot on SML - portfolios that are not well diversified (efficient) plot inside the efficient frontier and are represented by risk-return combinations

Value at Risk (VaR)

- the minimum loss over a period that will occur with a specific probability - consider a bank that has a one-week VaR of 200 million euros with a probability of 3%, that means that a one-week loss of at least 200 million euros is expected to occur 3% of the time. Note that this is not the maximum one-week loss the bank will experience; it is the minimum loss that will occur 3% of the time. VaR does not provide a maximum loss for a period. VaR has become accepted as a risk measure for banks and is used in establishing minimum capital requirements

Tax risk

- the risk that the tax code could change, along with regulatory and accounting risks together form compliance risk

Risk governance

- the top-level foundation for risk management , including risk oversight and setting risk tolerance for the organization

Financial risks

- those that arise from activity in the financial markets - consist of market risk, credit risk, and liquidity risk

ADVANTAGES OF USING FORMAL PROJECT MANAGEMENT

-Better control of financial, physical, and human resources -Improved customer relations -Shorter development times -Lower costs - Be careful! -Improved productivity -Higher worker morale -Better understanding of overall project goals -More organized and streamlined way to manage a project -More accurate and reliable project status information -More efficient use of project resources -Better communication -Faster response to conflicting project goals -Greater awareness of project progress -Fewer project failures

When to use Design Build

-Building functional rather than aesthetic -Building is simple -Brief for scope is likely to change -Single organization takes responsibility for risk of design and construction -Simpler projects with inexperienced clients. Common in repeated work and prefabricated

Disadvantages of Design and Build

-Changes in project after design stage costly -Difficult to compare between bids -Design required by limited standard contracts available -Client should understand conditions of project at an early stage -Client has no experience in preparation of work or understanding the market

Advantages of Design and manage

-Client dealing with one organization firm. Creates opportunity to improve cooperation between teams, design team, and construction team -Overlapping design and construction phase. Saves time. -Improve constructability by constructor in design -Roles, responsibilities, and risks for all parties are clear -Design is flexible to changes

Advantages of Construction Management

-Client will work directly with contractor -High degree of cost control -Client participation in contract from beginning to end -Owner involvement with all parties

Advantages of management procurement

-Early involvement of contractor -Overlapping between design and construction saves time -Design flexibility throughout project's duration

Advantages of traditional procurement

-Many options -All tendering contractors bid at the same time >>justice -Client has direct influence -Certainty of price as soon as you get contract -Changes in contract easily applied -this method is familiar in the market

Disadvantages of Design and Manage

-No clarity in cost -Client loses direct control over quality of design that's under constructor -Client has to supervise ongoing work--needs experience

Advantages of Design and Build

-Reduces the need to provide resources and time by providing designers and contractors together -Final price in beginning -Stimulates innovations and reduces time and cost

By use

-Residential building construction -Commercial and institutional construction -Infrastructure and heavy construction -Industrial construction -Environmental construction

Disadvantages of management procurement

-Risks passed to client -Quality on site difficult to manage -Reduction in cost certainty -More expensive

Procurement systems

-Traditional procurement system (design-bid-build) [owner, architect/consultant, contractor] -Design and build the procurement system [owner, + 1 person to design and build] -Management contracting procurement system [owner, contract team for management] -Cost reimbursement procurement system [owner, contractor, you'll be reimbursed for your services w/ a percentage of the product itself] -Partnering Procurement System [do a partnership with someone who has the know-how or resources]

Pre-tax Nominal Return

-return prior to paying taxes - Dividend income, interest income, short-term capital gains, and long-term capital gains may all be taxed at different rates

Venture capital funds

-similar to buyout funds except that the companies purchased are in the start-up phase -venture capital funds, like buyout funds, also provide advise and expertise to the start-up

If a product is in its emerging growth stage...

...Concentrate on R&D, competition, pricing

If profits are declining bc of a drop in revenues...

...Concentrate on marketing and distribution issues

If profits are declining bc of rising expenses...

...Concentrate on operational financial issues (e.g. COGS, labor, rent, marketing costs)

If you lower prices --> volume rises --> pushed beyond full capacity...

...Costs will shoot up as employees work overtime, and profits will suffer

If a product is in its declining stage...

...Define niche market, analyze competition's play, or think of exit strategy

If a product is in its growth stage...

...Emphasize marketing and competition

If sales are flat and profits are taking a beating...

...Examine both revenues and costs. Start with revenue, ID and understand revenue streams.

If a product is in its mature stage...

...Focus on manufacturing, costs and competition

If the sales are flat but market share remains relatively constant....

...Industry sales could be flat and competitors could be facing similar problems

If sales and market share are decreasing but profits are declining...

...Investigate whether prices are dropping or costs are climbing If costs aren't the issue, investigate product mix to see if the margins have changed

an Activity On Node (AON) diagram

1) activities are sequenced (predecessors and successors are determined) 2) activity paths are determined 3) duration of each path is calculated 4) critical path is identified (longest path & determines the soonest the project will complete)

Entering new market case strategy

1. Ask questions about the company 2. Determine state of current and future market (trends) 3. Investigate market to determine whether entry makes good business sense 4. Determine best way to enter market

5 Impacts of Project Management

1. Business advantage 2. competitive advantage 3. accurate and timely information to keep competitive edge 4. clear roles and responsibilities helps minimize conflicts and confusion 5. Effective communication

Management Process

1. Clear goals 2. Problem solving: investigations to come to solutions. constant communication 3. Develop a detailed plan: lays out tasks, establishes resources, budget and schedule parameters 4. Control the project: mobilize contractors, suppliers and vendors and evaluate their progress

Types of pricing strategies

1. Competitive analysis (How does price compare to competition, how will they respond?) 2. Cost-based pricing (add up all costs, then add profit margin to it -> not good bc if you need to cut prices it will squeeze margins) 3. Price-based costing (What are people willing to pay? May be much higher than you'd expect compared to just adding profit margin)

Project Life Cycle

1. Conceptualization - development of the initial goal and technical specifications of the project. Key stakeholders are identified and signed on at this phase. 2. Planning - all detailed specifications, schedules, schematics, and plans are developed. 3. Execution - the actual "work" of the project is performed. 4. Termination - project is transferred to the customer, resources reassigned, project is closed out.

QFD maps

1. Customer requirements 2. Technical Requirements 3. Interrelationships

TMAP Procedure

1. Define Project Goals 2. List the knowns, unknowns and constraints 3. Sequence and link all team comments, responses and questions

Time management planning process

1. Define activities 2. sequence activities 3. estimate activity resources 4. estimate activity durations 5. develop a schedule

Construction Project Characteristics

1. Defined goal 2. Specific tasks not routinely performed 3. A defined beginning and end 4. Defined deliverables 5. Resources being consumed

Outputs for project execution

1. Deliverables 2. Data and information about tasks performed: 3. Change requests 4. Updates to organizational assets

Organizational Structures

1. Designates formal reporting relationships 2. Grouping by individuals or departments 3. Design of systems for communication, coordination

Biggest factors in M&A cases?

1. Does it increase shareholder value? 2. Do the cultures of the two companies mesh well?

Ways to cut costs (finance)

1. Have customers pay sooner 2. Refinance your debt 3. Sell nonessential assets 4. Hedge currency rates 5. Redesign health insurance plans

Considerations when developing new product (thinking about market strategy)

1. How does this strategy affect existing product line? 2. Are we cannibalizing our sales from an existing product? 3. Are we replacing an existing product? 4. How will it expand our customer base and increase sales? 5. What will competitive response be? 6. Barriers to entry? 7. Major players and their market shares?

Considerations when developing new product (thinking about funding)

1. How is the product being funded? Does our company have the cash or are they taking on debt? Can we support the debt under various economic conditions? 2. What is the best allocation of funds?

Six Basic Step for MOV

1. Identify the desired area of impact *Strategic *Customer *Financial *Operational *Social 2, Identify the desired value of the IT Project Better? Faster? Cheaper? Do more? 3. Develop an Appropriate Metric (numeric) ▪provides the project team with a performance target or directive ▪sets expectations among all stakeholders, and ▪affords a means for evaluating whether the project is a success later on. Marchewka, Jack T.. Information Technology Project Management, 5th Edition (Page 64). Wiley. Kindle Edition. 4. Time Frame for achieving MOV 5. Verify and Get Agreement from Stakeholders 6. Summarize the MOV in a clear concise statement The project will be successful if ______ Or use a time table (in year ___ we will ____, and so on)

Methods of communication

1. Interactive communication: meetings, phone calls, etc. 2. Push communication: memos, reports, faxes, etc. 3. Pull communication: intranet sites, knowledge repositories, etc.

Ways to cut costs (production)

1. Invest in technology 2. Consolidate production space to gain scale and create accountability 3. Create flexible production lines 4. Reduce inventories (JIT) 5. Outsource 6. Renegotiate with suppliers 7. Consolidate suppliers 8. Import parts

Strategy for "Pricing Strategy" case

1. Investigate company - what is its objective? (profits, market share, or brand positioning) 2. Investigate the product - how does it work compared to competition? - Are there substitutions or alternatives? 3. Determine a pricing strategy

"Growth and increasing sales" case strategy

1. Learn about company and its size, resources, and products 2. Investigate the industry (how is client doing compared to it? Are client's prices in line with competitors?) 3. Increase volume

Possible actions in "turnaround" case

1. Learn as much as possible as company and operations 2. Analyze services, products, and finances 3. Secure sufficient financing, so your plan has a chance 4. Review the talent and temperament of all employees, and get rid of "dead weight" 5. Determine short-term and long-term goals 6. Devise a business plan 7. Visit clients, suppliers and distributors, and reassure them

Product Life Cycles

1. Linear- Define the work and ensure that the project includes only the required work 2. Iterative- Develop or deliver in increments 3. Adaptive- Build in flexibility to adapt during the project 4. Agile- Collaborate closely with customers in highly flexible, change-driven style

PM Characteristics

1. Management is goal oriented process 2. Multidimensional (work, people and operations) 3. A continuous process 4. Group activity 5. Dynamic function 6. Intangible force

Reasons for initiating and approving a project

1. Opportunity a. Market demands b. technological advances 2. Challenges - customer requests and social needs 3. Business Requirements

Elements for PM

1. PM elements- process groups, processes 2. Life cycles- linear, iterative, adaptive, and agile 3. Phases- life cycle phases for reviews, milestone, and deliverables 4. Organizations-

Project risk planning processes

1. Plan Risk Management 2. Identify Risks 3. Perform Qualitative Risk Analysis 4. Perform Quantitative Risk Analysis 5. Plan Risk Responses

Three major steps in Portfolio Management

1. Planning Step - creating an investment policy statement (IPS) that details the investor's investment objectives and constraints; should also specify an objective benchmark (such as an index return) against the success of the portfolio management process to be measured 2. Execution Step - analysis of the risk and return characteristics of various asset classes to determine how funds will be allocated to the various asset types; top-down analysis, a portfolio manager will examine current economic conditions and forecasts of such macroeconomic variables as GDP growth, inflation, and interest rates. Bottom-up security analysis is when you use model valuations for securities to identify those that appear undervalued 3. Feedback Step - portfolio manager monitor these changes and rebalance portfolio in response, adjusting the allocations to the various asset classes back to their desired percentages

Questions to ask about company?

1. Profits and revenues for last three years 2. Customer segmentation/demographics 3. Product mix, costs/margins 4. Production capabilities and capacity 5. Brand strength 6. Distribution channels 7. What constitutes success? WCS

Barriers to learning from post-project reviews

1. Psychological Barriers 2. Team-based shortcomings 3. Epistemological constraints

Business Case Financial Measurements

1. Return on Investment (ROI) 2. Future value (FV) 3. Net present value (NPV) 4. Payback period 5. Internal rate of return (IRR) 6. Cost-benefit analysis 7. Alternatives 8. Risk analysis

PMBOK knowledge areas included in audit:

1. Risk management 2. Procurement management 3. Quality Management

Key Baselines

1. Scope: Tasks and work packages in Work Breakdown Structure 2. Time: Planned start and end times for all work packages 3. Cost: Estimated cost for each work package

Ways to enter a new market

1. Start from scratch and grow organically 2. Acquire existing player from within the industry 3. Form a joint venture/strategic alliance with another player with a similar interest. What can both sides bring to the venture? 4. Outsourcing 5. Do cost-benefit analysis for each

For projects to be successful

1. Strategy 2. Leadership 3. Management

First five steps of a case

1. Summarize the question 2. Verify the objective(s) 3. Ask clarifying questions 4. Label the case and lay out structure 5. State your hypothesis

Techniques for Handling Change Requests

1. Use a Project Steering Team or Change Control Board (CCB) with members approved by stakeholders 2. Use configuration management procedures and tools to control the design and characteristics of products and their documentation 3. Document all change requests - even oral, informal, and minor ones

Questions to ask in competitive response cases

1. What is competitor's new product and how does it differ from what we offer? 2. What has the competitor done differently? What changed? 3. Have any other competitors picked up market share? 4. Have the customer's needs changed? 5. Did they increase or expand into new channels?

Examples of due diligence in M&A case

1. What kind of shape is the company you're looking at in? 2. How secure are its markets, customers, and suppliers? 3. How is the industry doing overall? How is the company doing compared to the industry? Is it a leader in the field? 4. What are the margins like? Are they high volume-low margin, or low volume-high margin? 5. How will competitors respond? 6. Are there any legal reasons why we can't or shouldn't acquire the target company? 7. Are there technology risks?

Ways to investigate market for new market entry case

1. Who are competitors, and what size market share do they have? 2. How do their products differ from ours? 3. How will we price our products and services? 4. Are substitutions available? 5. Any barriers to entry? 6. Barriers to exit? 7. What are the risks?

Considerations when developing new product (thinking about customers)

1. Who are customers and what is important to them? 2. How are they segmented? 3. How can we best reach them? 4. How can we ensure that we retain them?

How to analyze company in "turnaround" case

1. Why is it failing? Bad products or services? Bad management? Bad economy? 2. Are our competitors facing the same problem? 3. Do we have access to capital? 4. Is the company publicly-traded or privately-held?

Assumptions of mean-variance analysis

1. all investors are risk averse 2. expected returns, variances, and covariances are known for all assets and investors know the future value of these parameters 3. investors create optimal portfolios by relying solely on expected returns, variances, and covariances 4. investors face no taxes or transactions costs

types of multifactor models

1. macroeconomic factor models - driven by SURPRISES in macroeconomic risk factors 2. fundamental factor models - driven by multiple firm-specific factors 3. statistical factor models - factor analysis and principal component models

assumptions of the fundamental law of active management

1. manager has accurate knowledge of her skills and exploits this optimally 2. sources of information used by the manager are independent so that each bet is based on new information 3. IC is the same for each bet

Examples of barriers to exit

1. massive investment and non-transferrable fixed assets 2. Contract requirements with suppliers, gov. regulations 3. If costs of leaving market are higher than those incurred by staying in market

Key economic factors to memorize

1. unemployment rate 2. disposable income 3. consumer confidence 4. interest rates 5. the dollar's strength in current market 6. oil prices

methods to derive inputs of the mean-variance model

1. using historical means, variances, and correlations 2. estimating betas using the market model 3. calculating adjusted betas

There are two aspects of implementation for consultants and they are?

1.) Building support 2.) The technical work

How is commitment to change influenced?

1.) Confidence in the competence of the leaders promoting the change 2.) Confidence in their own ability to put the change into practice 3.) Attitude toward the change

What are the steps to change process?

1.) Establish a baseline 2.) Monitor changes to the baseline 3.) Address Changes to the baseline - internally and externally

What is a project according to Charles?

1.) Projects are hard, risky, expensive business initiatives 2.) They always have a measured return 3.) Normally business critical - clients jobs are on the line 4.) Consultants are never, ever hired when the job is easy.

Describe the steps in the general change process:

1.) Recognize need 2.) Unfreeze 3.) Change 4.) Refreeze

Consultants have traditionally given too much attention to _______ and ________ and too little attention to the complexity of translating those answers into action.

1.) Recommendations 2.) Analysis

The steps in Getting the picture is descirbed using 14 steps. We have completed at least the first 5 of these steps prior to, or during our first meeting. Pick only those that fit into the first 5 steps:

1.) Select the dimensions to examine 2.) Select the discovery strategy 3.) Re-decide to proceed

What are some of the required activities in project management?

1.) Status reporting 2.) Issue Management 3.) Quality assurance 4.) Human resources 5.) Organizational communications 6.) Being a taskmaster

What are the two questions that leaders must know as it concerns change?

1.) When to change 2.) How to change

Project Management Institute

1969 -Launched to promote project management as its own profession -Advocacy for the profession, setting professional standards, conducting research, providing access to info and resources 260,000 members 171 countries

Steps for Developing a Business Case

1: Define Measurable Organizational Value (MOV) 2: Form a Cross-Functional Business Case Team ▪Credibility—Access to people from various organizational areas or departments can provide critical expertise and information that may not be readily accessible to others outside that particular area. involved who will ask the right questions ▪Alignment with organizational goals—Higher level managers can help connect the business case with the organization's long-term strategic plan and mission. ▪Access to the real costs—The members of the business case team with certain expertise or access to important information can help build more realistic estimates with respect to salaries, overhead, accounting and reporting practices, training requirements, union rules and regulations, and laws. 3: Identify Alternatives 4: Define Feasibility and Assess Risk 5: Define Total Cost of Ownership—The 6: Define Total Benefits of Ownership—Similarly, 7: Analyze Alternatives 8: Propose and Support the Recommendation

According to a study cited in the textbook, inadequate management practices are associated with what percent of project failure?

65%

Price Elasticity of Demand

= (% Change in Quantity)/(% Change in Price)

variance of an n-asset portfolio

= (1/n * (sigma^2)) + ((n-1)/n * Cov)

Breakeven Market Share

= (Breakeven Volume)/(Total Market Size)

Quick Ratio

= (Current Assets - Inventory)/(Current Liabilities)

Return On Investment (ROI)

= (Gain from Investment - Cost of Investment)/(Cost of Investment)

unconstrained optimal active risk

= (IR / SR of benchmark) * risk of benchmark

Return on Equity (ROE)

= (Net Income)/(Shareholders' Equity)

Profit Margin or Net Margin

= (Profits)/(Revenues)

total risk of portfolio^2

= (risk of benchmark^2) + (risk of asset^2)

Contribution per unit

= (sales revenue - variable costs) / units sold

variance of an n-asset portfolio as pairs of two stocks

= (sigma^2) * ((1-p)/n + p)

active risk squared

= Active factor risk + active specific risknorth

margin of safety

= Actual quantity sold - breakeven quantity

Payback Period

= Cost of Project/Annual Cash Inflows

correlation of two assets

= Cov (a,b) / (sigma a*sigma b)

Current Ratio

= Current Assets/Current Liabilities

Free Cash Flow (FCF)

= EBIT(1-Tax Rate) + Depreciation & Amortization - Change in Net Working Capital - Capital Expenditure

Total Cost

= Fixed Costs + Variable Costs

Information Ratio using managers' skill

= IC * sq root BR

IC(combined)

= IC * sq.root (2/(1+r)) where r is correlation useful when original investment strategy is augmented with another strategy and the two investments are correlated

alpha

= IR * residual risk (w)

optimal level of residual risk (w*)

= IR / 2 gamma = (IC * sq root BR) / 2 gamma

value added for an optimal level of residual risk (VA*)

= IR^2 / 4 gamma = (IC^2 x BR) / 4 gamma

Net Present Value (NPV)

= Initial Investment + (Cash Flow Year 1)/(1+discount rate) + (Cash Flow Year 2)/(1 + discount rate)^2 + ... +(Ultimate Cash Flow Year X)/(1 + discount rate)^x

Return on Equity

= Net profit / total equity

Contribution Margin

= Price/Unit - Variable Cost/Unit

Net Cash Flow

= Receipts - payments

Profit

= Revenue - Total costs

Contribution

= Revenue - Variable costs

Profitability Formula

= Revenues - Costs Revenues = (Price * Volume) Costs = (Fixed Costs) + (Variable Costs * Volume)

Debt Ratio

= Total Debt/Total Assets

Debt-to-Equity Ratio

= Total Debt/Total Equity

Labor Productivity

= Total Output / # of workers

Total Variable Costs

= Variable cost * units sold

standardized sensitivities in fundamental factor model

= [(P/Ei) - (average P/E)] / sigma P/E

value added

= active portfolio return - benchmark return

adjusted (forecasted) beta

= alpha 0 + alpha 1 * beta, t-1 common value for: alpha 0 - 1/3, alpha 1 - 2/3

information ratio of a portfolio

= annualized residual return (alpha) / annualized residual risk (w) For different time horizons, the denominator increases by square root of the time horizon. E.g. quarterly will be 1/sq root (2) or half o the annual residual risk

More authority shared between functional and project managers

= better chances for project success

breakeven inflation

= expected inflation and risk premium for uncertainty in inflation = yield on non-inflation indexed bonds - yield on inflation indexed bonds

Breakeven Quantity

= fixed costs / contribution

Wages

= hours worked * hourly rate

liquidity requirement

= liquidity requirement - savings

Closing cash balance

= opening balance + net cash flow

Customers

= prospects * conversions

discount rate for commercial real estate

= real RF rate + expected inflation + uncertainty in inflation + credit spread + uncertainty about terminal value + illiquidity

component of discount rate

= real risk-free discount rate + expected inflation + risk premium reflecting the uncertainty about the cash flow (RP)

Accounts receivable turnover

= sales / accounts receivable

Cross Elasticity of Demand

=(% of change in Quantity for Good X)/(% of change in Price for Good Y)

Perpetuity Formula

=(Cash Flow)/(discount rate - growth rate)

Future Value

=(Present Value)*(1 + i)^t

Stand up call

A 'quick' round table team call to update status from each team member/lead. Usually no longer than 15-20 mins.

Takeaway

A British term referring to carry-out food; also transmogrified to indicate the salient point that should be retained upon the conclusion of the discussion, often prefaced with key.

Experienced Hire

A candidate with previous consulting experience who is hired to fill a high ranking position. Compare to campus hire.

Elevator Test

A challenge of one's capability to explain a concept within 60 seconds or less. It originated from the hypothetical situation explained in elevator pitch.

Paradign Shift

A change of intellectual viewpoints or perceptions that create a huge impact on a business. An example would be a shift from manual to digital documentation within an organization.

Take the lead on

A clever phrase often used by more experienced consultants to delegate a menial task, as in: "Why don't you take the lead on putting together this document," which may translate to, "I'm lazy and probably not smart or energetic enough to work on this, so go do it"; often appears in irrelevant settings, as in, "Why don't you take the lead on making dinner reservations for the team," a manifestly silly request for something which doesn't require leadership and on which they will certainly be working solo

Core Client

A client who has established a time-honored relationship with a consulting firm.

Core Client

A client with a long-standing and monetarily valuable relationship with the firm

Core client

A client with a long-standing firm relationship, and one in which there is continual dialogue between senior executives even if there are no ongoing projects; aka big spenders.

Portfolio

A collection of strategically aligned, value-generating change initiatives that help achieve organizational goals.

Straw man

A construct presented purely for the sake of argument, with the implication that it is not designed to withstand repeated attacks. Can be developed into a longer, defensible

Experienced hire

A consultant hired from another company (consulting or otherwise), typically with a higher starting position and salary than 1st year consultants. See also "parallel hire."

Parallel hire

A consultant hired from another company, typically with a more senior position position and higher starting salary than 1st year consultants. See also "experienced hire."

Boutique Firm

A consulting firm that offers a limited number of specialized consulting services to specific types of businesses. Examples of boutique firms include LEK and Marakon.

Granular

A detailed level of abstraction; often used in the context of increasing the fineness of the analysis, as in: "We need to get more granular here."

Provide color

A directive that translates roughly to "This is perhaps the most boring thing I have ever read, with the possible exception of certain lengthy legal disclaimers, and even then it's pretty close"; this bit of jargon is nevertheless somewhat of an advance, since, back in the early days of consulting, people were encouraged to provide black and white.

Program

A dossier of Projects & transformation activities to achieve outcomes and realise benefits of strategic importance to the business

Leverage

A fancy way of saying "use," as in "Let's leverage this set of data."

Hope you're doing well

A generally well-intended but insincere interpolation used at the beginning of most voicemails to replace the standard pleasantries that would be present in verbal communications; use of this phrase does not indicate actual interest in the well-being of the recipient; also found with alarming frequency in electronic mail.

project team

A group of individuals assembled to perform activities that contribute toward achieving a common task related goal. Many business operators will put together a project team consisting of skilled workers from the same or different function areas to work on an important project.

Workstream

A group of tasks that make up a project. Usage - "The team was developing various workstreams to complete the client deliverables"

Core Competency

A key strength that adds value to a company. It can consist of knowledge, technical capabilities, commitment, skill sets, or production techniques that enable an organization to introduce unique products and services to the market that will give their business a competitive advantage.

Space

A market, arena, field of endeavor, or general area, not to be confused with the area beyond Earth's atmosphere; use of this term usually adds nothing in the way of descriptive value, as in "I don't think there will be many opportunities in the technology space."

Benefit

A measurable improvement resulting from an outcome that is perceived as an advantage by the users and the sponsoring organisation and which contributes towards one or more organizational objective(s)

value added

A metric that attempts to capture the tradeoff between active return and active risk. Risk adjusted excess return = a - (residual risk aversion parameter * residual risk^2) = a - (gamma x w^2) = (residual risk * IR)/2

At the end of the day

A phrase used to attempt summarization, introduce an air of finality and perhaps close off certain avenues of discussion; since most consultants' days do not end with the setting of the sun, at the end of the day most of them are still working.

5,000 mile view

A phrase used to describe a high-level, summary view of the situation. 5,000 can be replaced by any large number to indicate the same thing.

Up or Out

A policy in which an employee is either promoted (usually within a period of time) or discharged.

Portfolio triple constraints

A portfolio's effectiveness to deliver value is controlled by three important elements, namely, organizational goals, projects and resources.

Bottom-Up

A problem solving approach that begins with an analysis of the details (or with low-level employees) and ends with an examination of the highest conceptual value (or top management).

Top-Down

A problem solving method that begins with an analysis of the highest conceptual level (or with the top management) and ends with an examination of the details (or low-level employees).

Successful elements of PM

A process is a set of related actions directed at accomplishing a specific result, e.g., to estimate project costs, create a plan, collect requirements. Knowledge is required in multiple areas, e.g., managing people, time, cost, risk, and communications

commodity

A reasonably interchangeable good or material, bought and sold freely as an article of commerce. Commodities include agricultural products, fuels, and metals and are traded in bulk on a commodity exchange or spot market.

business process

A series of logically related activities or tasks (such as planning, production, or sales) performed together to produce a defined set of results.

Change Management

A service provided by consulting firms to help with a period of major company change, such as an acquisition or a major shift in strategic priorities.

Fact Pack

A set of information that includes the necessary details of an assignment.

Workstream

A set of tasks that comprise a project.

Pareto Chart

A simple bar graph where the y axis represents frequency of occurence

Deck

A slide presentation, typically in Microsoft Powerpoint.

Boilerplate

A standard text or graphic that can be easily modified for future use. For instance, an employment contract may serve as a boilerplate if it is used every time a new consultant is hired. The recruiter can simply edit the personal information of the new hire and retain the terms of the contract.

Portfolio Managent Office (PMO)

A structural unit which is established centrally to manage the investment process, strategic alignment, prioritisation and selection, progress tracking and monitoring, optimisation and benefits achieved by an organisation's change initiatives on behalf of its senior management.

Sandwich method

A structure for providing feedback that resembles a sandwich - one positive comment, then a developmental critique, ending with a positive comment. Also known as a "hero sandwich" - "you're a hero - you suck - you're a hero."

contingency planning

A systematic approach to identify what can go wrong in a project and be prepared with plans, strategies, and approaches to mitigate and manage risks

Requirement Traceability Matrix

A table captured to map all the requirements of all stakeholders in order to track them until the project is complete

Check Sheet

A table or form used to allow a team to systematically record and compile data from historical source or observations as they happen

Value-add

A takeoff on "value added," which is based on the notion of increasing shareholder wealth by contributing to the profitability and therefore value of a firm. Now used to describe anything that "adds value," i.e., is positive, productive, and helpful. For example: "Consultants are clearly value-add professionals."

Deliverable

A task, usually part of a larger project, that has been promised to a client. It can be tangible, such as progress reports or a market study summary, or intangible such as a presentation.

Project

A temporary endeavour to create a unique product, service, or result according to an agreed Business Case

Elevator test

A test of one's ability to explain concepts in a short-period of time (typically 60 seconds or less). The elevator test represents a hypothetical situation where you are sharing the elevator with a VIP and need to give them a quick summary/presentation during the ride.

Sandwich Method

A three-step feedback method that starts by reviewing sound points of the project or idea presented, followed by corrective comments, and ends with praise. This approach serves to soften the impact of the criticism.

Fishbone Diagram

A tool that allows teams to identify and graphically detail all possible causes related to a problem and discover root causes of the problem

Kano model

A tool to distinguish types of product requirements that influence customer satisfaction

Charge code

A unique code provided with each project/assignment to which you can charge work-related expenses; a delight for new consultants and Friday hassle for experienced consultants.

Baselined

AKA approved

EBITDA

Abbreviation for Earnings Before Interest, Taxes, Depreciation, and Amortization, an indicator of a company's operational profitability.

B2B

Abbreviation for business-to-business, an online transaction between two organizations or businesses.

B2C

Abbreviation for business-to-consumer, an online transaction between a company and consumers or end users.

In line

About the same

Summer

Abridged noun form of summer intern.

CAGR

Acronym for Compound Annual Growth Rate, the number used to calculate the average return per year. For example, if a market grows from $100 billion to $230 billion over the course of 9 years, the CAGR is 9.70%. This is analogous to Internal Rate of Return in Finance.

QC

Acronym for Quality Control, a method that ensures the accuracy of documents and calculations.

Initiatives

Actions. Ex: "ABC could pursue performance improvement initiatives to further strengthen hydro power generation's contribution to the holding."

Buy-In

Agreement and/or consent. For example: "Do you have the CEO's buy-in?"

Buy-in

Agreement, support; it is unclear why 'buy-in' has come to supplant these terms, as no actual purchasing occurs.

Stakeholders

All individuals or groups who have an active stake in the project and can potentially impact, either positively or negatively, its development.

How big does a project have to be to justify a full-time PM?

All projects require leadership and experience of the leader is what will change.

Work Breakdown Structure

Allows an at-a-glance look at the organizational resources structured in a hierarchical manner Key project deliverable that organizes the team's work into manageable sections. Used to define the project during early stages of its cycle Visually defines the scope into manageable chunks that a project team can understand Need to make a plan based on the tasks involved

Engagement

Also known as a project or a case; something a consulting firm is paid to do (unless it's pro-bono, that is).

Slack

Amount of time that a task can be delayed without causing a delay to subsequent tasks

Actual Cost

Amount spent so far

MECE

An abbreviation for Mutually Exclusive, Collectively Exhaustive, a McKinsey principle that refers to creating subcategories to ensure that all relevant facts and details are considered. These subcategories must be mutually exclusive (they cannot occur at the same time) and collectively exhaustive (at least one of the events must occur). MECE is often used when performing market researches.

POOMA

An acronym for Pulled Out Of My Ass.

SWAG

An acronym for Some Wild-Ass Guess, an idea, answer, or opinion without supporting facts or valid basis. It's synonymous with POOMA.

MBB

An acronym that stands for McKinsey, Bain, and BCG, the three most renowned international consulting firms. The MBB firms are also referred to as the "Big 3."

Crisp

An adjective indicating that the referenced work or analysis is thorough and complete, perhaps by gastronomical allusion to food that is appropriately but not over-prepared; it is duly noted that crisp objects, while ostensibly finished, are also far more brittle and prone to shattering.

Contracts

An agreement between two or more parties representing a promise which one person agrees to perform a specific task or provide goods or a service to another in exchange for something in return.

Guesstimate

An educated guess. Can also be called a WAG ("wild-ass guess") or a SWAG ("scientifically wild-ass guess").

Deep Dive

An in-depth analysis or discussion of a particular topic.

To be transparent

An indication that what follows will be particularly revelatory, although it often is not especially so; the troubling implication of this usage is that the speaker has heretofore been opaque.

project

An individual or collaborative enterprise that is carefully planned to achieve a particular aim.

Rock star

An individual whose performance in a given area or success at specific endeavors is highly impressive, unique and/or admirable; this appellation is generally used sparingly; although the term is sometimes used frivolously to express purportedly extreme gratitude, as in: "Thanks for picking up my mail for me, you're a rock star."

White Space

An opportunity for company to generate revenue where it is not currently. For example, generating revenue from an existing product in a new market.

Portfolio Sponsoring Organisation (PSO)

An organisational unit with the budget, projects, resources, and the decision-making authority on how it wants to allocate its resources.

Best Practice

An organizational technique, method, or procedure that consistently produces the most effective or superior results. It is used as a benchmark by companies that want to improve their systems and processes.

Risk

An uncertainty (threat or opportunity) that will affect costs, time, benefit, quality and/or scope objectives of a project.

The structure of a presentation to present the picture should include:

Analysis of the problem Recommendations Analysis of how the situation is managed NOT a picture of the organization

Competitive response - responses

Analyze current product/design, repackage, move upmarket Intro new product Increase profile with marketing/PR campaign Build customer loyalty Cut prices Lock up raw materials and talent Acquire competitor/another player in same market Merge with competitor --> strategic adv Copy competitor

AOB

Any Other Business - another term meaning "miscellaneous" generally used in developing a meeting agenda (denotes time scheduled to discuss miscellaneous topics in a meeting)

Private Owners

Any individual, partnership, corporation or institution that builds a project for its own use or for resale Have much more freedom Invite designers to compete for their project Homes, shopping malls, hospitals, universities Includes: -homeowner -multinational companies -developers (owns project only for duration of project. goal is to make money thru quick sale or long term rental)

AOB

Any other business - a term generally used in developing a meeting agenda. Denotes time scheduled to discuss miscellaneous topics in a meeting.

Organizational Change is defined as?

Any substantive modification to an aspect of an organization - Workforce, Technology, Structure, Work processes, Culture, Values, Strategic mission.

Project Initiators

Anybody who submits projects to be considered for investment by the portfolio.

Deliverable

Anything that is owed by you to your manager/team, or owed by team to client. The cause of many (really, only and all) late nights on the job.

Design professionals

Architects: architecture, drafters, specification writers, interior designers, landscape arch Engineers: structural engineers, mechanical engineers, electrical engineers, civil engineers, surveyors

Pricing strategies - competitive analysis questions

Are there similar products out there? How does our product compare to the competition? Do we know the competitors' costs? How are they priced? Are there substitutions available? Is there a supply-and-demand issue? What will the competitive response be?

Portfolio management addresses questions like:

Are we working on the right projects? Are we investing in the right areas? Do we have the right resources to be competitive?

Sniff test

As in evaluating food for rancidity, this term is used when gauging the viability or reasonableness of a particular analysis; var. smell test.

Boil the ocean

As the name states, clearly an impossible task. Generally, a project manager or partner will say "Let's not boil the ocean" as a pretext for suggesting a ton of analyses that in effect, often ends up boiling a very large lake, if not exactly the ocean.

Cutting costs - steps

Assessment Internal cost analysis External cost analysis

Accounting Equation

Assets = Liability + Owner's Equity

Human Resources Management Plan

Assigned team member roles & responsibilities Approach for managing team members and staffing policies Describes how project resources will be acquired and released Describes how team members will be managed. After the project team has identified all activities that must be performed they determine resource requirements which are used to develop a human resource plan

PM Certifications

Associate in Project Management (AMP) Project Management Professional (PMP)

Benefit to cost ration (BCR)

Attempts to identify the relationship between the cost and benefits of a proposed project.

Features

Availability, "bells and whistles"

Meeting stakeholders' objectives

Balancing competing demands -Scope, time cost quality -Stakeholders with different needs and expectations -Identified requirements (needs) and unidentified requirements (expectations) -Stakeholder management is a proactive task -Project Manager must identify all stakeholders and incorporate their needs into the project

Starting a new business - market and strategic plans questions

Barriers to entering market? Major players, market shares? Competitive response?

Opportunity cost

Basic economic principle that describes the "cost" of the next best alternative foregone when making a decision. Not utilized widely in consulting; rather, profitability scenarios weigh the cost-benefit of Scenario A vs. Scenario B.

Consumer adoption rates

Bell curve Innovators: 2.5% Early adopters: 13.5% Early majority: 34$ Late majority: 34% Laggards: 16%

Project Scope

Best defines a baseline for performance measurement

Breakeven

Breakeven Point = Initial Investment∕Net Profit Margin = $100,000∕$5 = 20,000 units

Functional Requirement

Brief summary and a rationale that help project stakeholders and outsourced contractors understand why the requirement is needed and track the requirement through the progress of the project

Turnaround

Bringing something from slums to the surface

Turnaround

Bringing something from the slums to the surface. Ex: "ABC cement is facing serious financial challenges and the chance for a turnaround is small".

CPI

Budgeted Cost Work Performed / Actual Cost Work Performed

Local roles

Building development Fire and police

B2B

Business to Business - referring to a company's primary sales and marketing audience

B2C

Business to Consumer - referring to a company's primary sales and marketing audience

B2B

Business to business, referring to a company's primary audience for sales and marketing.

B2C

Business to consumer, referring to a company's primary audience for sales and marketing.

Categories of construction projects

By size: by ownership, by scope

Bandwidth

Capacity, free time, ability to do (additional) work; generally used to indicate that speaker cannot or would not prefer to do additional work, as in: "I don't think I'll have any bandwidth this Friday."

CAPEX

Capital Expenditure Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment.

CAPEX

Capital expenditure; or cost on the investment side

Cash Ratio

Cash Ratio = Cash / Current Liabilities

If profits are declining but revenues have gone up, review...

Changes in costs Changes in prices Additional expenses Product mix Changes in customer needs

Project management

Checking planning, organizing, motivating and controlling resources to achieve specific goals Application of: knowledge, skills, tools and techniques to protect activities to meet or exceed stakeholders' expectations while using resources efficiently and effectively

Leader's and consultants goal during the change phase is what?

Commitment

Writing a Deck

Compiling a slide presentation, typically in Microsoft Powerpoint.

CAGR

Compound annual growth rate (usually references multiple years to remove variance). If you don't know it, you won't get very far.

Rigorous

Comprehensive

Due Diligence

Comprehensive study of a business model with an aim to set clear expectations, risks, dependencies, etc. as part of a business proposal or M&A evaluation

Due diligence

Comprehensive study/survey of a business model with an aim to set clear expectations, risks, dependencies, etc. as part of a business proposal or M&A evaluation.

End-to-end

Comprehensive, complete. 'The supervisors should manage and construct projects in an end-to-end manner.'

Citizen roles

Conservation law foundation Historic review commission

state-of-the-art

Consisting of, or incorporating the latest technology in its field.

Portfolio Executive Board (PEB)

Consists of Senior Management with decision making authority: Builds and maintains the Strategic Framework. Governance body taking decisions on inclusion of initiatives in portfolio.

Paradigm

Consulting-ese for "pattern" or "model" or "framework." Also used to convey an oversimplified view of the problem that should be easier to solve. Parallel hire

Profit and loss - economy (not manufacturer)

Consumer confidence Unemployment rate Disposable income Gas prices

Design and Build

Contractor responsible for both design and construction Contract made with client detailing design, cost, and the time needed for completion of the project Contractor accepts full responsibility for design Certainty of final cost Overlap of design and construction saves time Improved communication

Cutting costs - assessment questions

Cost breakdown? (Irregularities?) Benchmark competitors Consider labor-saving technologies

Profit and loss - cost questions

Cost breakdown? FC/VC? (Any seem out of line/unusual?) Any major shifts in costs? Our costs vs. competitors'? Can we reduce costs without damaging revenue streams?

Cost of Goods Sold

Cost of Goods Sold = Cost of Materials/Inventory - Cost of Outputs

critical chain of events = critical events

Critical events or critical chains of events are those with the potential to impinge on a project the most. By identifying such events at the very beginning, it is possible to lessen the negative effect they have on projects

Key

Critical, essential, required, important, central; the key analysis is generally the linchpin; often used as a noun, and with such frequency that its significance has been diluted, because everything is now 'key.'

Portfolio review team (PRT)

Cross functional team consisting of Subject Matter Experts in finance, marketing, engineering, R&D, IT, operations, etc.. Governance body responsible for monitoring portfolio progress and resolving issues.

Ways to cut costs: labor

Cross-train workers Cut overtime Reduce employer 401(k) or 403(b) match Raise employee contribution to healthcare premium 4 10-hour days instead of 5 8-hour days Convert workers into owners (if have stake, will work harder) Layoffs Across-the-board pay decreases

M&A - reasons to merge/acquire

Cultures mesh well (merger) Increases shareholder value Increase market access, boost brand, increase market share Diversify holdings Pre-empt competition from acquiring Inherit management talent Obtain patents or licenses Gain from synergies, cost savings, cultural integration, expansion of distribution channels Gain tax advantages

On Board

Currently working on a case or project.

Scope

Define the work and ensure that the project includes only the required work

Effective management of stakeholders

Defines the approach to managing project stakeholders during the project life cycle Maximize support from stakeholders and minimize disruptive effects on project

Project Life Cycle

Defines the phases that connects the beginning of a project to its end A project is unique Details: Raw material extraction and processing, project manufacturing, distribution, use, end of life Recycle, Remanufacture, reuse/super-use

Portfolio Design Specifications

Defines which change initiatives can be considered as serious contenders for a given portfolio.

Benefits of work breakdown structure

Defining and organizing project work Project budget can be allocated to the top levels of the WBS Department budgets quickly calculated Project schedule and budget can be quickly developed Identify project cost performance and identify issues and problem areas in the project organization It's about detailing. No longer about estimation it's actual calculations

Big 4

Deloitte, Ernst & Young, KPMG, PricewaterhouseCoopers

Derivatives Risks

Delta - this is the sensitivity of derivatives values to the price of the underlying asset Gamma - this is the sensitivity of delta to changes in the price of the underlying asset Vega - this is the sensitivity of derivatives values to the volatility of the price of the underlying asset Rho - this is the sensitivity of derivatives values to changes in the risk-free rate

Boil the ocean

Describes what might occur if a Consultant is not being focused enough. For example: "We don't need to boil the ocean to get the exact number on this. Just make an estimate based on historical data for one product line."

On the bench

Description for a consultant who is not working on a billable project. Similar to Off the clock.

On the clock

Description for a consultant who is working on a billable project.

Business Model

Description of how a business creates and delivers value to its target market. It includes strategies, organizational structure, processes, and policies.

Granular

Detailed or exhaustive; often used when referring to project studies and analyses.

Civil Engineers

Determine project location on a site by studying the subsurface soil conditions and the topography of the land Design roads, bridges, tunnels, parking lots, storm water drainage, and sewage treatment plants

Smell Test

Determining whether a result makes sense based on intuition and experience. For example: "This analysis doesn't pass the smell test. If it is accurate, then it means that this division accounts for over 200% of our client's market capitalization!" Derived from the idea of smelling food or drink before consuming it, to make sure it isn't rotten.

Top-down

Developing an estimate by starting with the highest-level assumptions and using estimates to drill down to a smaller-level estimate. For example, estimating market size by starting with the number of potential customers and estimating how many purchase the product, how frequently, and at what price points. Contrast with "Bottoms-up."

Planning Process Group and Time Management knowledge area

Development of schedules, milestones, and critical paths

In selecting the method(s) of inquiry there are 6 potential methods described. Which method is the best source of data if you can trust your own perceptions?

Direct Observation

In selecting the method(s) of inquiry there are 6 potential methods described. Which method gives the aura of objectivity?

Document analysis

Risk Management plan

Document describes how project risk management will be structured & performed on the project. -Approach to managing project risks -Roles & responsibilities in managing risks -Budgeting for managing risks -Risk categories (RBS) -Definition of risk probability & impact -Risk probability & impact matrix -Stakeholders' risk tolerances -Tracking risks

Fast Tracking

Does not result in an increase of costs, but leads to an increase in the risk, because increase of reworking or rearrangement that may result

risk management knowledge areas audit question?

Does the project plan consist of a contingency plan?

Profit and loss - economy (manufacturer)

Dollar against other currencies Interest rates Gas prices Commodities

Earned Value Management (EVM

EVM is a technique for monitoring and controlling your scope, time, and cost baselines. With EVM, you can calculate variances that show you if your project is on track. -Planned values for cost and start/end times - Actual costs - Estimate of how much work was completed

PLANNING

Entering project information Identifying project subdivisions and milestones Documenting resources Entering restrictions Assigning Resources to tasks

Technical complexity

Ex. M&E, degree of finishes, Product availability, Materials, technologies, equipment. The level of technology employed and to some degree the project's risk level. Projects with known technologies, readily available materials and average finishes carry less risks than those that involve unknown technology and unusual materials

The process

Ex. Project funding, Timetable currency, Preconstruction information, project unknowns can also carry with it a certain level of risk. Any project that carries strict funding requirements and/or a rushed timetable will have a high level of risk. This is because commitments may have to be made with incomplete information or some of the early planning

Owner organization

Ex. Sophistication, organizational structure, decision making Sophisticated organizations with a past project experience, a committed project team and an empowered decision maker will be able to handle project risks better than unsophisticated owners,

The Work Environment

Ex. country, location, neighbors, regulatory environment, job site conditions, economic market conditions The more congested and environmentally sensitive the site and the more difficult the subsurface conditions, the higher the risk. Inner-city locations, soil with hazardous materials from prior use and sites that have unstable subsurface conditions would all be characterized by having a high level of risk,

Performance

Execution or accomplishment of a project to fulfill customer requirements in accordance with project scope

Public owner

Exists for the benefit of the general public Ex. Municipalities, libraries, interstate highways Under umbrella of government Financing from local state Can be done thru public agencies like Dept of Transportation or State Public Works Specific method for managing projects: -get public approval in specific schedule and budget -projects publicly advertised -wage rates advertised

Industry analysis - questions about future

Expanding or shrinking> Mergers and acquisitions? Barriers to entry or exit?

Risk factors

External: market situation, architects' plans arrive too late, complicated client, weak construction management, bad building contracts, economic, physical, political, Internal: subsoil, project duration too short, architecturally sophisticated/complicated, labor, site, materials, subcontractor Global: construction, design, location, environmental, timeframe, management, financial

4.) True or False: There is power among peers that bosses and management can easily overcome.

False

Upward Feedback

Feedback given by lower level employees to higher ranking employees.

Production phase

Finally, the contractor executes the job. Overviews the different models existing example for duties as per contractor's responsibilities throughout project timeline

Financial Model

Financial models focus on either profitability and/or cash flows. Cash flow models focus on the net cash, may be positive or negative, and are calculated by subtracting the cash outflows from the cash inflows. In general, one could view the benefits associated with a particular alternative as a source of cash inflow and the costs as the source of outflows. The most commonly used cash flow models include payback, breakeven, return on investment, and net present value..

Secondary objectives

Flexibility, sustainability, cost, risk, responsibility, certainty, complexity

Analyze phase of Six Sigma DMAIC

Focuses on how and why defects and errors occur

Risk

Focuses on what can go wrong or what must go right. ▪Identification—What can go wrong? What must go right? ▪Assessment—What is the impact of each risk? ▪Response—How can the organization avoid or minimize the risk?

Project Charter

Gain approval and formally authorize the existence and start of the project. Issued by project initiator or sponsor

GMC

Global Management Consultancy, sometimes referring to just the Big 3, sometimes referring to the Big 3 plus the Big 4 accounting firms.

Project Audits

Help organization determine whether the project controls are functioning as expected. Answers questions posed by the customer, sponsor, executives, or other stakeholders

Productivity

How efficient and effective things are run

Starting a new business - management questions

How experienced is the management team and what are its core competencies? Have they worked together before? Is there an advisory board?

Developing a new product - financing questions

How funded? Best allocation of funds? If taking on debt, can we support debt under various economic conditions?

Starting a new business - finance questions

How is it being funded? Best allocation of funds? If taking on debt, can we support debt through various economic conditions?

Time

How long should it take to complete the project? What is the project's schedule?

M&A - exit strategies questions

How long to keep it? Divest parts of the organization?

Industry analysis - supplier questions

How many? Product availability? What's going on in their market?

Best Practice

How things should "best" be done

Change management

How to make changes happen in big organizations

Production

In noun form, a department (either internal or outsourced) of the consulting firm that assists in producing the materials needed for presentations, meetings, etc.

Streamline

In organized system and with specializations

Infrastructure and heavy construction

Include highways, mass transit systems, tunnels, bridges, pipelines, drainage systems and sewage treatment plants Publicly owned and therefore are sensitive to governmental policy Characterized by a high degree of mechanization which has gradually replaced some labor intensive operations Designed principally by civil engineers and built by heavy construction contractors having engineering backgrounds or support

business analysis

Investigation into the operations of a business to expose the causes behind the results achieved, and the effects of those results on the business.

Industrial Projects

Involve large scale projects with a high degree of technological complexity such as oil refineries, steel mills, chemical processing plants and coal-fired or nuclear power plants Owners are deeply involved in development Prefer to work with designers-builders such that the total time for the completion of the project can be shortened

Project Management Plan

Is used as a roadmap to guide the team through execution of project, a communication doc for stakeholders, and a comprehensive doc that integrates strategic and other planning: Scope management plan Requirements management plan Schedule management plan Cost management plan Quality management plan Process improvement plan HR management plan Communication management plan Risk management plan Procurement management plan Change management plan Schedule, cost performance, and scope baselines

Collaborative Procurement (Partnering)

Long term commitment between two or more organizations Enhance the efficiency and effectiveness of work in terms of cost and opportunities for innovation and continuous improvement of product quality and service Requires development of relations between different parties. Commitment, trust, cooperation

Big 3 (MBB)

Mckinsey, Bain, and BGC

Value Benefit Analysis

Measures the effectiveness of a solution.

Return on investment (ROI)

Measures the performance of an investment by measuring the gain from an investment and the cost of the investment.

Facetime

Meeting in person or being in the office to promote the impression of being productive. For example: "I have no work to do but I need to go into the office on Saturday to put in a little facetime."

Portfolio Director (PD)

Member of the Management Board responsible for the Portfolio Strategy. Provides leadership and direction to portfolio management. Heads both the PEB and the PRT.

Traditional Procurement

Method developed to satisfy client Client appoints consultant to design and control the cost After design stage, client appoints main contractor to start project Client has full control over design quality Best bid is obvious Used in complex projects, technically advanced and highly serviced buildings

MECE

Mutually Exclusive and Collectively Exhaustive which means that your solutions and data should have no gaps or overlaps

MECE

Mutually exclusive, collectively exhaustive. A term originating at McKinsey and common across consulting firms, it's a grouping principle that allows coverage of every idea without any overlap. Nearly impossible to achieve comprehensive in short consulting engagements, so focus is really on being mutually exclusive.

Is delivery a PMBOK process?

NO

Should the customers be involved in the entire process?

No they do not need to be. They should know and understand the process but they don't ALWAYS need to be involved.

Ad-Hoc

Non-structured. For example: let's turn this ad-hoc process into a structured and efficient one.

Impression management

Offers praise, ingratiation, and self promotion

Multi-Project Management

Often focuses on the management of the project portfolio from a controlling perspective and manages critical resources (usually financial only) across several independent and for resources competing projects only.

Hands

Often prefaced with 'client,' indicates the interpersonal skills of an individual in relation to a particular group of people, as in, "That manager sure has great client hands."

OPEX

Operating expenditure; or the cost on the operation side

Risk Responses

Options and Actions that mitigate risks and reduce project threats best defines

OBS (Contract)

Owner initiates contract w/ prime contractor Prime contractor signs w/ first tier subcontractors 1st tier contractors sign w/ second tier subcontractors Owner -Prime contractor >Concrete >Electrical >Steel erection >Mechanical *Sprinklers *Plumbing

PMP

PMI provides certification as a Project Management Professional

Planned Value

PV = Planned completion % x Budget at completion

Payback

Payback Period = Initial Investment∕Net Cash Flow = $100,000∕$20,000 = 5 years

Idea Champions

People who actively and enthusiastically support new ideas.

Impeccable

Perfect

Operations

Performed by people Constrained by limited resources Planned, executed and controlled Ongoing Repetitive

Projects

Performed by people Constrained by limited resources Planned, executed and controlled Temporary Unique

Blanks

PowerPoint slides that are drawn on a notepad. More senior Consultants often describe a presentation yet to be drafted by "blanking" a series of slides and giving them to a junior Consultant to perform the work required to complete them.

Major goal of project management

Prevent defects

Classification of contractors

Prime "general"- responsible for construction of entire project Subcontractor "specialty"- responsible for construction of a limited aspect such as plumbing, heating, electrical, etc

Configuration Management

Process of managing change in hardware, software, documentation

program management

Process of managing multiple related projects working toward the same goal or result.at once.

EXECUTING

Producing work results Requesting changes Recommending improvements Creating project records, reports, and presentations

Core company questions

Profits and revenues for last 3 years Customer segmentations Product mix (costs/margins) Prod capabilities and capacity Brand Dist channels

PERT

Program Evaluation Review Technique

Project Phases

Programme phase Design Phase Procurement phase Production phase

PMO

Project Management Office

ROI

Project ROI = Total Expected Benefits−Total Expected Costs Total Expected Costs = $115,000−$100,000 $100,000 = 15%

OBS Sample

Project Team -Project development -Procurement -Production -Engineering Design >Process >Automation >Electrical >Mechanical *CAD *Piped Services *Engineering ~Senior Engineer 1 ~Senior Engineer 2

PROJECT MANAGEMENT TOOLS AND TECHNIQUES

Project charters, scope statements, and WBS (scope) Gantt charts, network diagrams, critical path analyses (time) Net present value, cost estimates, and earned value management (cost)

Requirements traceability matrix

Project documents associate with the scope management knowledge area

project management (PM)

Project management is the discipline of using established principles, procedures and policies to manage a project from conception through completion, i.e. in planning, control, monitoring, and review of projects.

Stakeholder

Project manager Customer Performing organization Sponsor Team Internal/External End user Society, citizens

Project planning

Project planning can begin at the completion of two key project initiation processes: (1) the project charter is created and approved by the project sponsor, and (2) the project stakeholders are identified The standard student response is that a project is successful if it is completed on time (schedule), within budget (cost), and producing deliverables which meet customers expectations (scope, quality, requirements). But they can go as far as Proper project documentation Clearly defined and assigned roles & responsibilities Senior management or executive support Stakeholder buy-in Periodic team meetings held (kickoff, progress, etc.) Periodic meetings with the customer Competent project manager & team

Progression

Projects build up slowly as workers and equipment are brought to the project and mobilized. Early on only a few activities may occur, but once mobilization is complete work proceeds at a rapid pace until the end, when production slows down and the last remaining items are wrapped up. S-curve reflects this. Line represents cash flow and project completion Three curves: actual, expected, and initial

Project Sponsors

Provide the investments funds for the projects in the portfolio and work closely with the respective project managers in ensuring that the projects are completed successfully.

Cost-plus percentage fee contracts

Provides no incentive for the contractor to control costs (not used often)

PIOUTA

Pulled it out of thin air, also see "WAG" or "SWAG."

QC

Quality control, typically referring to need to check for typos, grammar mistakes, calculation errors, etc.

Value-add

Quite simply, that value is added, mashed into a hyphenated noun form. See "adding value."

Adding value

Quite simply, that value is being added. See also "value-add."

C-Suite

Refers to any number of executives with a capital C at the beginning of their title (the C stands for "Chief." For example: COO, CFO, CEO, CIO, CMO, etc.

Takeaway

Refers to key points, conclusions, insights, or lessons learned from a presentation or during a meeting. If a consultant effectively delivers his or her message, the recommendations are usually implemented.

Pipe or Pipeline

Refers to upcoming projects the Consulting firm may have available (e.g. Supervisor, what is in the pipe?)

Design Phase

Requirements: -Details -Conceptual arch drawing -Equipment -Materials -Technical issues (mechanical, structure) -Drawings, materials, specs People Involved: -Consultant -Owner

Bidding Phase

Requirements: -Formal contract documents -Contractor appointing -Municipality approval People involved: -Owner -Consultant -PM

Execution Phase

Requirements: -Monitoring and control for activities and processes -Procurement -Progress completion/payment People involved: -Owner -Supervision -Consultant -Contractor -PM

Planning Phase

Requirements: -Scheduling -Plan People Involved -Eng -Arch -Civil Engineer - Mechanical and Electrical -PM

Closing Phase

Requirements: -Warranty Period -Maintenance -Lessons learned -Asbuilt drawings -Checklist People involved: -Owner -Supervision -Consultant -Contractor -PM

Initiation

Requirements: -Scope -Duration/Start -Location -Budget People Involved: -Client -Owner -Consultant -PM

Crashing

Resources are added to the project for the least cost possible.

When conducting interviews in an organization, the mere act of asking questions can stimulate people to do what?

Rethink what they are doing

Net Profit

Revenue * margin

Net Income

Revenues - Expenses = Net Income

Risk Register

Risk register is a document which is developed early in project planning and progressively elaborated in the risk management planning process. At a minimum, the risk register contains identified risks, description of risks, results of the qualitative and quantitative risk analysis, risk triggers, risk owners, and planned risk response strategies: 1. Pr of event 2. Impact of event

Let me play this back

Said when the listener wants to refract and color the conversation through his or her own perspective, under the pretense of reviewing the transcript of what's been said; in this manner the listener can pretend he or she is a tape recorder.

Commercial Buildings

Schools, universities, medical clinics, hospitals, sports stadiums, shopping centers, warehouses, offices, hotels Privately funded, though some projects like schools, courthouses and city offices are publicly funded Owner may or may not be familiar with construction industry practices but they're usually able to select competent professional consultants and arrange the financing of the constructed facilities themselves Specialty architects and engineers engaged for designing a specific building, Builders/contractors my also be specialized only in that building

Charles Cochran addressed this type of change what is it?

Scope Change or growth within a contract or project

Knowledge Areas

Scope Management Time management Cost management Stakeholder management Human resource management Communication management Procurement management Risk management Quality management Integration management

Triple Constraint for scope

Scope is constrained by 1. Cost 2. Schedule 3. Quality

Scoring Models

Scoring models provide a method for comparing alternatives or projects based on a weighted score. Total Score = ∑n i=1 wi ci Where: wi = criterion weight ci = criterion score 0≤wi ≤1

Cost Reimbursement

Separating responsibility and management in design and production Start working immediately without needs for details of the contract Final cost is nonspecific. No price till work is completed. Contract documents on basis of information in schematic design, specs, and price charts Used in emergency work, renovations and general maintenance

project lifecycle

Seven stage process through which practically every major project goes through: (1) Identification: stage where one project-idea out of several alternatives is chosen and defined. (2) Preparation: defined idea is carefully developed to the appraisal stage. (3) Appraisal: every aspect of the project idea is subjected to systematic and comprehensive evaluation, and a project plan is prepared. (4) Presentation: detailed plan is submitted for approval and financing to the appropriate entities. (5) Implementation: with necessary approvals and financing in place, the project plan is implemented. (6) Monitoring: at every stage the progress of the project is assessed against the plan.(7) Evaluation: upon completion the project is reassessed in terms of its efficiency and performance.

Footprint

Significant or powerful presence in something. Ex: 'the firm has expanded its footprint in the real estate and social infrastructure construction in synergy with the urban development business.'

Restructuring

Significantly and massively changing something

Transformation

Significantly and massively changing something

Restructuring

Significantly and massively changing something. Ex: "The board guided three-year human capital transformation plan including restructuring divisions and alignment to business strategy."

Double click

Similar to "deep dive", this means a thorough in-depth exploration of a particular topic.

Deep dive

Similar to "double click", this means a thorough in-depth exploration of a particular topic.

Construction Method

Similar to management contracting Contract made directly between client and commercial contractor Difference: having a supervisor for the client at the site as well as supervision of the various departments Appropriate method for client experienced in construction Client gets separate contract with consultants and contractors. Construction manager provides management services as a consultant

Entering a new market - market questions

Size, growth rate and trends of old and new markets? Where is the industry in its life cycle? Who are the new market customers and how are they segmented? What role does technology play in the old and new industries and how quickly will it change?

Rock-star

Star performer, i.e., someone who shows impressive capabilities and is often in high demand for new projects. For example: "John worked 100 hours last week and completed the best merger analysis I've seen in years. He is the rock star of his class."

Commencement date

Start day onsite

Entering a new market - ways to enter

Start from scratch and grow organically Acquire existing player JV/strategic alliance with player with similar interest. What can both sides bring? Outsource Cost/benefit analysis of each

Roles for

State: department of environmental protection department of transportation State inspector general Local: Building development Fire and police Citizens: Conservation law foundation Historic review commission Business: business roundtable related to investments Designers: civil engineers transportation engineers architects graphic designers Construction: project managers construction contractors material suppliers equipment suppliers labor Consultants: testing laboratories surveyors public relations

Mission Statement

Statement that clarifies what the organization does, who they do it for, and how or why they do it.

Competitiveness

Strength; ability to compete

Stewardship

Successful project management requires both project leaders and project management

Scope of a project

Sum of all individual jobs comprising a project. Its documentation explains the boundaries of the project, establishes responsibilities for each team member and sets up procedures for how completed work will be verified and approved.

SDLC

System Development life cycle. A term used in InfoSys to describe planning, creating, testing and deploying an Information System (not super flexible)

reengineering

Systematic starting over and reinventing the way a firm, or a business process, gets its work done

Benchmarking

Systematically manage process improvements by a single organization **Types of models: o Center for Business Practices o Kerzner's project management maturity model o ESI International's project framework o SEI's capability maturity model integration

Competitive response

Take into account when planning product launch/making price change What will you do if a competitor comes out with a new product/service and starts to steal your market share? Or, what will your competitor do if you come out with a new product aimed at stealing their market share?

Start of any question

Take notes Repeat/verify question What constitutes success to the client, including any other objectives I should know about?

Incremental Change

Takes relatively smaller steps toward its goal, perhaps by restructuring to be more efficient or expanding it line of products or services to promote more growth.

80/20 Rule

The Pareto principle that states that 80% of the results come from 20% of the causes. In business, it implies that managers need to determine the critical factors that require more attention. In terms of time management, it implies that fundamental issues should be addressed before less vital tasks and concerns.

Quick question

The answer will be anything but; bizarre because the adjective 'quick' is intended, by implication, to be transferred to the answer to said question and does not necessarily have any bearing on the length of the question

Core

The chief concerns of a company or business unit. For example: "We need to exit these three business lines and focus on our core product."

Beach

The consulting equivalent of sports' being on the bench, it is viewed with worrisome anxiety by junior consultants and relieved gratitude by senior consultants.

Opportunity Cost

The cost of an alternative product or service a company chooses to forgo in order to pursue another. For instance, if a retailer decides to sell bags, the opportunity cost refers to alternative products (e.g., school supplies, clothes, etc.) that could have been sold.

Project Quality

The degree to which a set of inherent characteristics of a project fulfill project scope

operations management

The design, execution, and control of operations that convert resources into desired goods and services, and implement a company's business strategy

Discount Rate (aka Hurdle Rate,

The discount rate is the minimum return a company would expect from a project if the company were to make an equivalent investment in an opportunity of similar risk. Calculated using the formula: NPV = −I O + ∑( Net Cash Flow (1 + r) t ) Where: I = total cost (or investment) in the project r = discount rate t = time period

Transparency

The dissemination of company information such as market studies and financial reports. It can also mean being open to team members when it comes to work-related activities.

risk management

The identification, analysis, assessment, control, and avoidance, minimization, or elimination of unacceptable risks. An organization may use risk assumption, risk avoidance, risk retention, risk transfer, or any other strategy (or combination of strategies) in proper management of future events.

Low-hanging fruit

The initial opportunities, areas of exploration, etc. that are easiest to cover; intended to evoke visual imagery of fruit-laden trees, suggesting that much remains beyond the lowest boughs; syn. quick win.

Weeds

The intricate details of an analysis. Compare with "Drill-down."

Critical Path

The key tasks needed in order for a process to achieve a desired result.

Payback period

The length of time required to recover the cost of an investment.

Low-Hanging Fruit

The low-hanging fruit is the easiest to pick from a tree. When this phrase is applied to business, it refers to the goal that can be achieved without difficulty, the task that can be finished readily, or the opportunity that can be grabbed quickly.

value engineering

The modification of designs and systems according to value analysis.Manufacturing: Systematic analysis that identifies and selects the best value alternatives for designs, materials, processes, and systems. It proceeds by repeatedly asking "can the cost of this item or step be reduced or eliminated, without diminishing the effectiveness, required quality, or customer satisfaction?" . Its objectives are (1) to distinguish between the incurred costs (actual use of resources) and the costs inherent (locked in) in a particular design (and which determine the incurring costs), and (2) to minimize the locked-in costs.

Project Risk and Liability

The nature of any project is very risky but each project carries its own set of additional risks that may be based on an aggressive schedule or a particular location or politically charged environment

Utilization Targets

The number of yearly target billable hours a firm sets for each of its clients, usually expressed in percentages.

goal

The object of a person's ambition or effort; an aim or desired result.

scalability

The potential for a business or an aspect of a business to continue to function effectively as its size increases.

Construction

The process by which many parties came together to form a permanent facility using material, equipment and machinery to assemble it Involves many businesses and agencies Work together for a few years and then move onto different projects Service industry more than a manufacturing or project based industry Built based on human needs Designer and constructor operations become more complicated bc of technology

Upward feedback

The process of providing feedback "upward" to more senior employees, from managers to partners

Measurable Organizational Value

The projects overall goal and measure of success. It must align with the organization's objective, mission, and goals. The MOV MUST: *Be Measurable. *Provide Value to the Organization. *Be Agreed Upon *Be Verifiable

Entrepreneurship

The pursuit of starting and managing one's own business. It is one of the most popular exit options of management consultants as their consulting experience and exposure have prepared them for the challenges of running a business.

Bandwidth

The resources required to finish a task or project including the amount of energy and level of skill needed to do things efficiently.

active risk

The standard deviation of the active return. It has two components - active factor risk and active specific risk

On board

The status of being assigned to a case, engagement, or project

What is a project life span / project life cycle?

The total of the phases through which a project passes from the time it is initially conceived until the time it is either in use as a success or abandoned as a failure

Sustainable Approach

The type of approach recognizes needs that help in the long-term, that value opportunities to develop people and enhance capabilities what will contribute to sustainable performance. Looking to improve members' on-the-job experience, positive relationships with the community, and reduce harmful impacts on the natural environment.

Added Value

The value added to the production cost of a product in terms of either price or worth. For example, a one-year warranty on an electronic device is a value-added feature that conveys the quality of the product.

Conventional Approach

This type of approach recognizes needs that help to maximize profits, efficiency, productivity, and competitiveness Identifies what needs are urgent and what can be overlooked ( at least for the moment)

Buttoned-Up

Thoroughly planned, accurate, and supervised. Also called Buttoned-down.

Relation between primary and secondary objectives

Time: flexibility, sustainability Cost: risk, responsibility Quality: certainty, complexity

Ping

To contact someone about a particular issue or matter. The word is generally used in reference to emails, but it can also be applied to mobile phones, instant messengers, and other electronic forms of communication.

Circle back

To follow up with indicated individuals at a later point in time, usually to review progress on the current topic of discussion; this phrase is somewhat redundant, as it is impossible to trace a circle that does not connect back with itself.

Drill-Down

To get beyond the higher-level summary in to the details. Compare with "Weeds."

Buttoned-down

To indicate that a particular piece of work or analysis is comprehensive, accurate and capable of withstanding close scrutiny; see buttoned-up.

Buttoned-up

To indicate that a particular piece of work or analysis is comprehensive, accurate and capable of withstanding close scrutiny; with buttoned-down, this is an example of opposite terms with identical meanings.

Pushback

To indicate to a superior Consultant that something is difficult or challenging and may not be realistic. Being able to push back effectively when a manager may be overpromising or unrealistic is an important, delicate skill. Pushing back can also be done if the Consultant is being overworked and feels "stretched too thin."

Run the Numbers

To make calculations in order to determine if the quantitative data supports a given business endeavor, investment, or transaction.

Wordsmith

To make trivial or generally unnecessary edits to text that may only subtly change the meaning, if at all; incorrectly implies that one is a craftsman on the order of a blacksmith or goldsmith; sadly, wordsmithing rarely involves the deletion of jargon

Re-frame

To re-discuss the purpose and scope of a project with the client.

Hit the Ground Running

To start something enthusiastically and at a fast pace.

Think out of the Box

To think creatively, freely, or unconventionally in order to come up with innovative ideas that are not confined by structures, practices, or rules.

Leverage

To use any resource to improve or enhance a product or service.

Stakeholder Analysis

Tool for demonstrating some of the seemingly un-resolvable conflicts that occur through the planned creation and introduction of new projects.

Rock Star

Top Performers

enterprise model

Top level representation of an organization's mission, functions, processes and the information flows. It is used as reference for constructing all other models.

Total Cost of Ownership

Total cost of ownership (TCO) is a concept that has gained widespread attention and generally refers to the total cost of acquiring, developing, maintaining, and supporting the product or application system over its useful life. TCO includes such costs as: ▪Direct or up-front costs—Initial purchase price of all hardware, software, and telecommunications equipment, all development or installation costs, outside consultant fees, etc. ▪Ongoing costs—Support, salaries, training, upgrades, supplies, maintenance, etc. ▪Indirect costs—Initial loss of productivity, time lost by users when the system is down, the cost of auditing equipment (i.e., finding out who has what and where), quality assurance, and postimplementation reviews.

Asking the client if they are getting what they want half way through the meeting gives you time to recover if they express concerns.

True

True or False: Implementation is, in theory, the point of the consultation, the fruit of the labor:

True

True or False: When giving the final report to the client it is ok to provide support for what they have been doing right, and to point out or confront them with what they have been doing wrong

True

True or false: Peers see each other more clearly than management sees them, and therefore peers are harder to manipulate than management.

True

Gantt chart

Type of bar chart that illustrates a project schedule with start and finish dates, deliverables, etc.

Value chain

Type of breaking down business activities based on chronicle steps

What must organizational leaders help members do?

Understand the need for change and provide members with information that reduces uncertainty

Cutting costs - internal cost analysis

Union wages, suppliers, materials, economies of scale, increased support system

Restricted Stock

Units of stock with restrictions on when they can be sold

Features of unsuccessful projects

Unnecessary & / or unapproved scope changes Lack of a change control management procedure Not using or improperly following change procedures Not following the project management plan Poor project monitoring & controlling Continuously gathering requirements Requirements that are poorly defined and are not understood Undefined or poorly defined scope Over-optimistic or unrealistic assumptions Unclear project roles & responsibilities

Leverage

Use of resources materials knowledge or people in order to get what you want

Forward Pass

Used to add early start and finish to network diagram. Start with the critical path.

Hard stop

Used to indicate that after the time indicated, the listeners are on their own, because the person stating that they have a hard stop sure isn't going to be around to help after that.

High-level

Used to indicate that after the time indicated, the listeners are on their own, because the person stating that they have a hard stop sure isn't going to be around to help after that.

High-Level

Viewing a project or situation from a wider perspective or involving the participation of company executives and managers.

Volume, costs and price: which are easiest to change?

Volume (amt produced) and costs Unless all parties change their prices together (e.g. airline tickets or gas prices) Price wars are generally detrimental

2

We hire great people, set clear expectations, we provide regular feedback, and we celebrate great performances.

7

We maximize long-term shareholder value through profitable sales growth.

1

We treat each other with dignity, respect, honesty, and integrity.

Starting a new business - distribution channels questions

What and how many [that we can rely on]?

Pricing strategies - price-based costing questions

What are people willing to pay for this product? If they're not willing to pay more than what it costs you to make, it might not be worth making. But consumers might be willing to pay much more than you could get just by adding a profit margin Profit margins vary by industry What is the product worth to the buyer? Compare to other products/services in their lives. What did they pay for those?

Entering a new market - company questions

What are the company's profits and revenues for the last 3 years? What is the company's product mix? - Will this new product cannibalize an existing product? - Are the customer segmentations the same? - Can we use the same distribution channels and sales force? - How and where will this new product be produced? Will we have to hire new workers or can we retrain existing ones? How strong is the brand?

Entering a new market - entry questions

What are the risks to entering the market? Who are our competitors, what market share will they have, and how will they respond to our entry? Are there any barriers to entry or exit? How do our competitors' products differ from ours? Are substitutions available? How will we price our new products? Any other risks to entering the market?

Starting a new business - products and services questions

What is the prod, service or tech? Competitive edge? Adv and disadv? Proprietary?

M&A - general questions

What kind of shape is the company you're looking at in? How secure are its markets, customers and suppliers? How is the industry doing overall? And how is the company doing compared to the industry? Is it a leader? What are the margins like? High volume, low margin, or low volume high margins? How will the competitors respond? Legal reasons we can't or shouldn't acquire the target company? Technology risks?

M&A - due diligence questions

What shape is the company in? Industry? How secure are the markets and customers? What are the margins? What is the best competitive response to acquisition? Legal issues?

Cost

What should it cost to complete the project? What is the project's budget? What resources are needed?

Scope

What work will be done as part of the project? What unique product, service, or result does the customer or sponsor expect from the project?

Planning components

What: Scope (Plans and specifications) How much $: Budget (via CBS - and estimate) Who: OBS How: WBS When: Schedule

Profit and loss - company questions

Who are they? What do they do? What are their products? Public or private? Are they the market leader? Size, in terms of revenues? Trends, in growth? (3 years) Customer segmentation?

Developing a new product - customer questions

Who? How to reach them? How to hold them (retention)?

M&A - PE firm

Why does the PE firm want to buy the company? What else does it own? What does it plan to do with it (hold, flip, break apart)?

Turnaround - company and industry questions

Why is it failing? Bad prod/services? Bad management? Bad economy? Are our competitors facing the same problem? Do we have access to capital? Public or private?

M&A - acquisition

Why? What other products do they sell?

WBS

Work Breakdown Schedule Deliverable Oriented "Scope"

Estimators

Work with design drawings and prepare a list of completed job costs Need to understand construction process Detail oriented and well organized Knowledge about costs for labor, materials, and equipment Estimating is a computerized activity

Work-Life Balance

Working without sacrificing one's relationships, interests, spirituality, growth, and other personal needs. Achieving this balance is a common problem for most if not all consultants due to the long work hours required in the industry.

worstcase scenario

Worst possible environment or outcome out of the several possibilities in planning or simulation. Imagining a worst case scenario helps in planning expenditure cuts, in formulating contingency plans, and in setting aside enough reserves to cushion the impact if the event or situation actually occurs.

Capacity

Your available time and energy for additional tasks.

project plan

a formal, approved document used to guide both project execution and project control. The primary uses of the project plan are to document planning assumptions and decisions, facilitate communication among project stakeholders, and document approved scope, cost, and schedule baselines.

Gantt Chart

a graphical depiction of a project schedule, a type of bar chart that shows the start and finish dates of several elements of a project that include resources, milestones, tasks and dependencies.

program

a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually

project schedule

a listing of a project milestone activities, and deliverables, usually including intended start and finish dates.

return on investment

a measure of the company's ability to use its assets to generate additional value for shareholders. calculated as net profit divided by net worth

return on assets

a measure of the company's profitability, calculated as earnigns divided by total average assets

residual frontier

a plot of residual return versus risk for a given information ratio - the slope of the residual frontier is the IR

efficient frontier

a plot of the expected return and risk combinations of all efficient

earned value management (EVM) = Earned Value Project/Performance Management (EVPM)

a project management technique for measuring project performance and progress in an objective manner. It links resource planning to cost and schedule requirements. All work is budgeted and scheduled in time-phased increments incorporating a baseline for cost and schedule measurement.

Post Project Review = post mortem = project retrospective = Post-Implementation Review (PIR)

a project review generally conducted at the end of the entire project , and analysing how the project performed against the Business Case and Project Management Plan (PMP) and helping to identify lessons learnt that will enable continuous improvements.

event chain methodology

a project scheduling technique that focuses on identifying and managing the events and event chains that affect projects. It maps out uncertainty and risk in a project, and statistically estimates the impact that events will have—even external ones. It is based on existing analysis methodologies including: Monte Carlo simulation, Bayesian approach, and others.

metrics

a set of measurements that quantify results. performance metrics quantify the units performance. project metrics tell you whether the project is meeting its goals

balanced scorecard

a strategic management and measurement system that links strategic objectives to a comprehensive range of key performance indicators, to provide a balanced view

nonlinear management (NLM)

a superset of management techniques and strategies that allows order to emerge by giving organizations the space to self-organize, evolve and adapt, encompassing Agile, "evolutionary" and "lean" approaches, flextime, time banking, as well as many others. Key aspects of NLM, including holism, evolutionary design or delivery, and self-organization are diametrically opposite to linear management thinking.

Project

a temporary undertaking that has a definite beginning and an end and something that has a distinct and definitive purpose. It is undertaken to create a unique product, service or result.

fiscal year

a twelve-month accounting period, not necessarily starting at January 1

efficient portfolios

a) minimum risk of all portfolios with the same expected return b) maximum expected return for all portfolios with the same risk

demand-based pricing

aka price-based costing. a pricing method in which the price of a product is finalized according to its demand. if the demand of a product is more, an organization prefers to set high prices to gain profit. the success of demand-based pricing depends on the ability of marketers to analyze the demand. this type of pricing can be seen in hospitality and trael industries

intellectual property

all of a company's patents, trademarks, service marks, trade names, trade secrets, and copyrights. it is distinguished from capital property.

Project portfolio management

an emerging business strategy in which organizations group and manage projects and programs as a portfolio of investments that contribute to the entire enterprise's success.

intergrated master plan (IMP)

an event-based, top level plan consisting of a hierarchy of program events, with each event being supported by specific accomplishments, and each accomplishment associated with specific criteria which must be satisfied for its completion. So, the three elements of the IMP are: (1) event - a program assessment point that occurs at the culmination of significant program activities; (2) accomplishment - is the desired result(s) prior to or at completion of an event that indicates a level of the program's progress; (3) criteria - provides a definitive evidence that a specific accomplishment has been completed.

communications log

an on-going documentation of events between any identified project stakeholders, managed and collected by the project manager

Report-Out

an update to the client on the project status

Frederick Taylor

analyzed work patterns and behavior and found out that better methods can increase the productivity

Exchange-traded Funds

are similar to mutual funds, but investors can buy and sell ETF shares in the same way as shares of stock. Management fees are generally low, though trading ETFs results in brokerage costs.

80/20 Rule

belief that 80% of the effects come from 20% of the causes; in consulting, this term is used to imply that 80% of the assignment can be finished in 20% of the time

transfer coefficient

can be thought of as the correlation between actual active weights and optimal active weights

Hard Stop

can't run past the time allocated for a given activity (must be in by 2:00 PM)

private equity

capital that is not noted on a public exchange. composed of funds and investors that directly invest in private companies, or that engage in buyouts of public companies, resulting in the delisting of public equity

effect of adding a risk free asset on the shape of the efficient frontier

changes from a curve to a line

COTS

commercial off the shelf = Item that is commercially available, leased, licensed, or sold to the general public and which requires no special modification or maintenance over its life cycle.

Case (Engagement)

consulting project

a communications management plan

contains a description of the identified project stakeholder information needs and defines approach for communicating during the project.

Hoskin Kanri

corporate-wide management approach that combines strategic management and operational management by linking the achievement of top management goals with daily management goals at the operational level

Activity-based costing (ABC)

costing that aims to provide a dynamic and realistic means of calculating the true cost of doing business. It precisely allocates direct and indirect costs to particular products or customer segments

Program Evaluation and Review Technique (PERT)

created in 1958 as part of the Polaris missile submarine program. Later extended to create WBS

current ratio

current assets / current liabilities. shows liquidity of a company (working capital)

Environmental construction

dealing with projects that improve the environment includes sanitary sewers, waste management and clean water

Event Chain Diagram

depicts the relationships between external events and tasks and how the two affect each other. These chains are represented by arrows that are associated with a particular activity or time interval on a Gantt chart.

Financial institutions

determine where the money will come from and terms and conditions of funding

market segmentation

differentiates products based on price, quality, and characteristics and this allows for branding

extreme project management (XPM)

differs from traditional project management mainly in its open, elastic and undeterministic approach. Its main focus is on the human side of project management (e.g. managing project stakeholders), rather than on intricate scheduling techniques and heavy formalism.

Schedule management plan

document within the project management plan containing information on how the schedule will be developed and controlled, how schedule processes will be measured, and what scheduling tool will be used.

Activity-Based Costing

dynamic and realistic means of calculating the true cost of business through allocating direct and indirect costs to particular products or customer segments (assigns overhead costs to customers and products based on the amount of activity and resources spent on these customers and products - leads to enhanced understanding of customer and product profitability)

Balanced Scorecard

enhances performance measurement by creating a scorecard based on a balance of four perspectives - customer, internal, financial and future (allows companies to measure both daily performance and long-term strategy)

active return

equals the differences in returns between a managed portfolio and its benchmark = Rp - Rb

Boil the Ocean

euphemism for an impossible task that is time consuming and adds little value, meaning that one should close book and move on

Organization Development

evolving field of consulting practice dedicated to understand and impacting the processes of human systems in order to increase their effectiveness and success

Role of the PM

executing a vision through: Planning, Execution, Monitoring, Control, Closure. in Project planning: Identify & document project requirements Build the project team Establish clear project objectives Understand stakeholders' expectations Prevent unnecessary scope changes Ensure team understands project objectives Develop project plans

fixed costs

expenses that don't change based on production or sales volumes. they include salaries, rent, insurance, etc.

fixed costs

expenses that don't change based on production sales/volumes; salaries, rent, insurance

variable costs

expenses that vary based on production volumes. they include material, labor, production utilities, etc.

balance sheet

financial document that shows assets and liabilities

greenfield investment

foreign direct invesmtnet into a new site; easier with emerging markets, harder in more industrialized countries due to regulations

Takeaway

important point of action in a meeting

effort management

in project management: the effective and efficient allocation of time and resources to perform activities in line with a company strategy and/or a project.

quality management plan

in the project management plan. a diagramming technique to illustrate the activity's logical relationships: Finish to Start, Start to Start, Finish to Finish, and Start to Finish

break-even point

income matches expenditures; typically, initial expenditures are high and it takes time for income to reach the same level

inorganic growth

increasing output and business reach by acquiring other companies

Money-weighted rate of return

internal rate of return on a portfolio based on all of its cash inflows and outflows - calculate by considering the beginning value and additional deposits of cash by the investor to be inflows and considers withdrawals of cash, interest, and dividends (which are additional cash available to be withdrawn) and the ending values to be outflows - PVinflows=PVoutflows

inter-temporal rate of substitution

investor's trade off between real consumption now and real consumption in the future = consuming 1 unit in the future/consuming 1 unit today

inter-termporal rate of substitution

investor's trade-off between real consumption now and real consumption in the future

Responsibility Assignment Matrix (RAM)

is a diagram which correlates the project organizational structure to the WBS. The matrix diagram depicts the work which must be performed and the assigned individual or team responsible for performing the work.

expenditure

is a payment or disbursement, and may be for the purchase of an asset, a reduction of a liability, a distribution to the owners, or it could be an expense. For instance, an expenditure to eliminate a liability is not an expense, while expenditures for advertising, salaries, etc. will likely be recorded immediately as expenses. the total amount of money that a government, organization, or person spends during a particular period of time:

The discipline of project management

is about providing tools and techniques to enable a project team to organize its work and meet the project success factors

certified associate in project management (CAPM)

is an entry-level certification for project practitioners offered by the Project Management Institute (PMI). It is intended to demonstrate candidates' understanding of the fundamental knowledge, terminology and processes of effective project management.

enterprise modeling

is the process of understanding an enterprise business and improving its performance through creation of enterprise models.

Risk budgeting

means of allocating investments or assets by their risk characteristics

information coefficient (IC)

measure of a manager's forecasting accuracy and skill = 2 (% of correct bets/all bets) - 1

Economic Value Added

measures the return on total capital invested in a company (to improve accountability for delivering value to shareholders, operating income is compared to the cost of the capital invested)

triple constraint

meeting scope, time, and cost goals (Triangle)

country allocation strategy

mixes elements of active and passive investment approaches

R&D

money a company has re-invested during the period to find and develop new products.

gross revenue

money generated by all the company's operations before deductions and expenses

monitoring and control

monitoring and control is a set of ongoing activities that span the entire project.

Long-Term Assets

non-liquid assets that are required for the company's day-to-day operations (facilities, equipment, and real property)

fixed assets

non-liquid assets that are required for the company's day-to-day operations; facilities, equipment, real property

Descriptive

not judgmental

Project Management

o Complex, one-time process o Limited by budget, schedule and resources o Clear goal o Customer-focused

Process v. Project

o Process-- ongoing, day-to-day activities in which an organization engages while producing goods or services. o Project-- new endeavor, one objective, limited time.

product proliferation

occurs when several different brands are owned by the same company, from budget friendly to high quality (i.e. Unilever). occurs when the marketplace is solidified

merger

occurs when two companies decide to marriage their assets; can create cost synergies overall but sometimes negative for employees (i.e. firing redundant workers)

Functional Area

one of the major functions performed in operating a business

minimum-variance portfolio

one that has the smallest variance among all portfolios with identical expected return

debt-equity ratio

outstanding long and short-term debt divided by the book value of shareholders' equity. helps determine of a prospective investment target is borrowing too much

Procurement Management Plan

plan documents the goods and services which will be procured from outside the project organization and the procurement approach.

Enterprise Environmental Factors

policies for staff hiring and firing, facilities and equipment being used in the project, tools to help you as a project manager

Benchmarking

process of gathering information about other companies in your industry to compare your performance against

Construction roles

project managers construction contractors material suppliers equipment suppliers labor

General work that needs to be completed before delivery of system or service with specified features is

project scope

Matrix organization

project staff have dual loyalties, to the project and their functional unit

Functional organization

projects operate within a single functional unit or across multiple units

key performance indicators

quantifiable measurements, agreed to beforehand, that reflect the critical success factors of the company, department, project, etc.

key performance indicators (KPI)

quantifiable measurements, agreed to beforehand, to reflect the critical success factors (of the company, department, project)

Reengineering

radical redesign of a company's processes, organization, and culture (traditional vertical divisions such as sales, marketing, and production are reorganized around processes such as taking an order, delivering products, and collecting payments)

Net return

refers to the total return after deducting fees for management and administration of the investment account (commissions on trades and other that are necessary to generate investment are included)

Gross return

refers to the total return on a security portfolio before deducting fees for management and administration of the investment account (commissions on trades and other that are necessary to generate investment are included)

EBITDA

reports what the company would have earned during the period if it did not have to pay interest on its debt; didn't have to pay taxes; and had depreciated the full value of all assets at their acquisition. it is roughly equivalent to the operating income line in the Income Statements

Utility function

represents the investor's preferences in terms of risk and return (ie. his degree of risk aversion)

Ways to raise profits

revenue-based and cost-based strategies

Quality Audit

review of the quality plan to determine whether the project activities comply with organization and project policies, processes and procedures

active specific risk

risk from active asset selection attributable to deviations of the portfolio's individual asset weightings versus the benchmark's individual asset weightings

active factor risk

risk from active factor tilts attributable to deviations of the portfolio's factor sensitivities versus the benchmark's sensitivities

Systematic risk a.k.a Beta Risk

risk that affects the entire market or economy and is not diversifiable - priced and earns a return - beta measures the relation between a security's excess returns and the excess returns to the market portfolio

Investors

risk-averse and historical data confirm that financial markets price assets for risk-averse investors

gross profit

sales revenue - costs of goods sold =

PROJECT CONSTRAINTS

scope time cost goals quality risk resources

Deming Cycle (Shewhart Cycle)

set of activities (plan, do, check, act) designed to drive continuous improvement

continuous improvement plan

set of activities designed to bring gradual, but continual improvement to a process through constant review. The Shewhart cycle is among the best known

Selection and Prioritization Process of Organizational Projects

should align with the goals and strategy of the org

Work Breakdown Structure (WBS)

should not be confused with a schedule. The WBS does not show activity relationships, sequence of activities, or activity dependencies. The WBS is developed before the schedule. The work packages are further decomposed into activity lists which is an input into developing the project schedule. - created after the SOW - considered one of the most important project documents which is created in project planning -scope statement is broken down into small manageable components through a technique called decomposition -decomposition continues until all project work is eventually broken down to the lowest level of the WBS called a work package -in theory work packages are typically 80 hours to 8 hours of work. PM should break the work down until a realistic chunk of work (deliverable) is reached that can be scheduled, assigned to be performed, cost estimated, monitored and controlled

S curve

shows the growth of company sales for a new product. rapid, exponential increase in sales for a period time, followed by a tapering or leveling off due to the population of new customers declining

Outside consultants

small organizations without large in-house departments often hire consultants

tracking portfolio

specifically designed to have the same set of factor exposures to match a predetermined benchmark

earnings statement

standard financial document that summarizes a company's revenue and expenses for a period of time

earnings statement

standard financial document that summarizes a company's revenue and expenses for a specific period of time, usually one quarter of a fiscal year and the entire fiscal year

income statement

summarizes a company's revenue and expenses for a specific period of time, usually one quarter of a fiscal year and the entire fiscal year

Total Quality Management

teaches that quality has an intrinsic value and is extremely important to customers (spreads customer orientation throughout the company; empowers employees to fix problems in order to sustain world-class quality of products, services, and processes; sets goal of meeting rigorous quality standards; emphasizes continuous improvement)

Discounted Cash Flow

technique used by financial analysts in the valuation of companies that values current cash flow more than that in the future

discounted cash flow

technique used by financial analysts under the principle that cash today is worth more than cash promised in the future

Consultant roles

testing laboratories surveyors public relations Reporting quality control, project managers, etc Can be all over

Procurement phase

the client appoints the contractor to carry out the project. Depending on the form of contract, it follows either the programme phase or the design phase.

cost of sales

the costs directly related to the purchase or production of whatever the company sells

expenses

the costs of doing business that result from generating revenue. they include parts, salaries, utilities, etc.

expenses

the costs of doing business that result from generating revenue; they include parts, salaries, utilities, etc.

capital

the financial investment needed to start/run a business

capital

the financial investment required to start and/or run a business

increase distribution channels, increase product line, diversify products, and start a new PR or marketing campaign

the four framework strategies for growth

security market line (SML)

the graph of the CAPM

organic growth

the growth rate a company can achieve by increasing output and enhancing sales internally

job enlargement

the horizontal expansion of a job. it involves the addition of tasks at the same level of skill and responsibility. it is done to keep workers from getting bored, not the same as job enrichment

A/R

the monies due to the company for goods sold or services rendered for which payment has not yet bene received

cash flow

the movement of money in and out of a company; when more comes in then goes out, it is a positive cash flow. if more goes out than in, then it's negative.

cash flow

the movement of money into and out of a company. when more comes in than goes out, it is said to be a positive cash flow. a negative cash flow is when more goes out than comes in.

fixed assets

the non-liquid assets that are required for the company's day-to-day operations, i.e. facilities, equipment, and real property

Breadth (BR)

the number of independent forecasts of exceptional return per year that the manager makes, it cannot be highly correlated information sets e.g. 2 forecasts / month * 12 months / year = 24 forecasts / year

Owner

the party that will pay the bills as well as receive the ultimate benefits of the finished project Can be: individuals seeking a home Organization Municipality Developer Responsibilities: Determine scope, schedule and budget Takes advice from consultant Two categories: public, private

Stakeholders

the people involved in or affected by project activities Stakeholders include: The project sponsor The project manager The project team Support staff Customers Suppliers Opponents to the project

market share

the percentage of any of its markets that it holds. companies will often discount their products in order to saturate the marketplace and thereby gain a larger market share

Project manager

the person responsible for leading a project from its inception to execution.

break-even point

the point at which income matches expenditures. typically, initial expenditures are high. it takes time for the income to reach the same level. the break-even point can apply to a product, an investment, or the entire company's operations

global minimum-variance portfolio

the portfolio with the smallest variance among all possible portfolios

project accounting

the practice of creating financial reports specifically designed to track the financial progress of projects, which can then be used by managers to aid project management.

Operational risk

the risk that arises from within the operations of an organization and includes both human and system or process errors

capital allocation line

the risk-return line that lies tangent to the efficient frontier

cost-plus pricing

the simplest method of determining the price of a product. a fixed percentage of the total cost is added to the total cost to set the price.

Arbitrage Pricing Theory (APT)

the theory assumes a. returns are derived from a multifactor model b. unsystematic risk can be completely diversified away c. no arbitrage opportunities exist

Mean-variance analysis

the use of expected returns, variances, and covariances of individual investments to analyze the risk-return tradeoff of combinations

job enrichment

the vertical expansion of a job: adding tasks to a job that increase the amount of employee control or responsibility

increase prices, increase volume, increase amount of each sale, seasonal balance

the ways to increase sales

barriers to entry

things that make it difficult for a new company to compete against companies that are already established in the field; ex: patents, trademarks, copyrighting, a dominating brand

barriers to entry

those things that make it difficult for a new company to compete against companies already established in the field, i.e. patents, trademarks, copyrighted technology, and a dominant brand

Super tools

tools that have high use and high potential for improving project success ex: project management software scope statements work breakdown structures requirement analyses lessons-learned reports status and progress reports well-planned kick-off meetings Gantt charts change requests

Project-based organization

work gets done directly through project managers

Considerations for Alternatives

▪Changing the existing business processes without investing in IT. ▪Adopting or adapting an application developed by a different area or department within the organization. ▪Reengineering the existing system. ▪Purchasing an off-the-shelf application package from a software vendor. ▪Custom building a new application using internal resources or outsourcing the development to another company.

Advantages of Cross Functioning Team for Business Case

▪Ownership—A cross-functional team can spread a sense of ownership for the business case for more buy in and less problems. ▪Agreement—If you develop a business case in isolation, it is very likely that you will have to defend your assumptions and subjective judgments in a competitive or political setting. ▪Bridge building—The business case team may serve as an effective tool for handling critics of the business case.

Benefits of Scoring Models

▪The scoring model can combine both qualitative and quantitative criterion ▪Weights and scores can be subjective ▪Financial models can be biased toward the short run ▪Some criteria can be reverse-scored ▪Past experience may help create a more realistic business case

Let's hit a home run

"I'm desperate to look good. Even though the odds of a home run are slim, I'm banking on one because it's the only thing that'll save me." Something for all you sports fans to remember: if you have a bunch of solid hitters you don't need a bunch of home runs.

Keep this on your radar

"This will come back to bite you. Or me."

Incremental Revenue Gain/Loss

(Revenues from new product/company/etc.) - (Revenues from old product/company/etc.)

Designer roles

civil engineers transportation engineers architects graphic designers

Tighten Up/ Clean Up

cleaning up deliverables --> grammar, formatting, spelling, etc

closet index fund

closer to benchmark than being actively managed; low IR, similar SR, after fee IR ratio could be negative

Grinold rule

expected active return = IC * active risk * standardized score

information ratio

expected active return divided by the tracking risk, so it shows the manager's active return per unit of tracking risk = (Rp - Rb) / s(Rp-R)

beta

= correlation i, m * (st. dev. of stock i / st. dev. of market portfolio) measurement of systematic risk

Revenue

= customers * transactions * average spend = Price * Quantity sold

You and I are not on the same page

"Get on my page. Your page is misguided." No one ever says, "We're not on the same page, so let me work really hard to understand your point of view." If you want to understand someone else, you say, "Can you tell me more about how you're thinking?"

Risk management

- a process that defines risk tolerance and measures, monitors, and modifies risk to be in line with that tolerance

Nonsystematic risk

- local and can be diversified away by combining assets with low correlations - not priced

Managing a project includes

-Identifying the requirements -Establishing clear and achievable objectives -Balancing the competing demands for quality, scope, time, and cost -Adapting specifications, plans, and concerns of the stakeholders

Buyout Funds

-involve taking a company private by buying all available shares, usually funded by issuing debt -the company is then restructured to increase cash flow -investors typically exit the investment within three to five years

Examples of barriers to entry

1. Access to capital, dist. channels, raw materials, human talent 2. Government regulations, customer loyalty, sticky features, market domination by one or two companies

Responses in "competitive response" cases

1. Analyze our current product and redesign, repackage, of move upmarket 2. Introduce new product 3. Increase profile of company with a marketing and PR campaign 4. Build customer loyalty 5. Cut prices 6. Lock up raw material and talent 7. Acquire the competitor or another player in the same market 8. Merge with a competitor to create a strategic advantage and become more powerful 9. Copy the competitor

Risk categories

1. The work environment 2. Technical complexity 3. The process 4. Owner organization (sophistication--what is the process to take the decisions, organizational structure---heirarchy)

Breakeven Formula

1. Units to Breakeven: Total Fixed Costs = (Price * Volume) - (Variable Cost * Volume); solve for volume 2. Price to Breakeven: Total Fixed Costs = (Price * Volume) - (Variable Cost * Volume); solve for price 3. Time to Breakeven: Total Fixed Costs = (Revenues per day/month/year) - (costs per day/month/year); solve for day/month/year

Implementation of any change boils down to whether people at several levels are going to take responsibility for the success of the ______ and the __________.

1.) Institution 2.) Change

Stand Up Call

A brief meeting in which team members provide general updates of their work progress.

Elevator Pitch

A brief yet encompassing speech which is delivered to introduce one's background and qualifications for a consulting job during a networking event or job interview. It refers to an imaginary situation in which one finds him or herself in an elevator with a key person in the consulting industry.

Bird's Eye View

A business phrase for thinking outside the box. It means being open-minded, ingenious, and innovative during meetings, brainstorming sessions, or problem analyses.

reserve analysis

A comparison of the contingency reserves of schedule, resources, and budget at a particular time during the progress of a project

Due Diligence

A comprehensive organizational research and analysis conducted prior to a business transaction or agreement with another party.

Adding Value

A general phrase that can mean a number of things, but all of them revolve around the idea of being productive in a positive way. Evolved from the concept of "value added."

Burndown Chart

A graphical representation of work left to do vs. total time scheduled

Sea Change

A major shift. For example: "There has been a sea change in the past decade in terms of how retail banks interact with their clients, and how they prioritize customers based on profitability."

Going Forward

A phrase synonymous with "in the future."

Internal rate of return (IRR)

A profitability metric used by businesses to determine which projects are likely to yield the greatest return per dollar of capital investment. Though it is closely related to the net present value, it reflects anticipated gains as a percentage of the initial investment rather than as a net dollar amount.

Assignment

A project a consultant undertakes for a professional fee, which usually consists of analyzing a business situation and coming up with recommendations for a solution.

Project Alignment

A solid project plan based on clear goals and identifiable tactics/tasks to reach them. Easier decision-making during the project (e.g. Does this feature/functionality align with our overall strategy?). Money saved with internal or external team efforts by reducing costly change requests or budget overruns caused by "surprise" variables.

Benchmark

A standard or point of reference

resources

A stock or supply of money, materials, staff, and other assets that can be drawn on by a person or organization in order to function effectively.

Use case analysis

A technique used in software projects to document the potential requirements of a new system or software by conveying how the system should interact with the end user or another system to achieve a specific business goal

Project

A temporary endeavor undertaken to create a unique product service or result

TOIL

Acronym for Time Off In Lieu, the hours or days one may take in exchange for working overtime on a certain project.

As variability increases

Accurate estimation decreases and the required sample size increases

AOB

Acronym for Any Other Business, a phrase referring to topics not listed in the meeting agenda but that attendees would like to discuss after the main concerns have been covered.

KPI

Acronym for Key Performance Indicators, a set of measurable goals or objectives that signify satisfactory performance if achieved.

Management

Act ot coordinating the efforts of people to accomplish desired goals and objectives using available resources (eg. Money, workers, equipment, manpower) Includes: -Identifying requirements -Establishing clear and achievable objectives -Balancing the competing demands for quality, scope time and cost -Adapting specifications, plans and concerns for the stakeholders

Initiatives

Actions

Turnaround - steps

Analyze company and industry Possible actions

SWOT Analysis

Analyzing the Strengths, Weaknesses, Opportunities, and Threats for a company or set of companies in an industry.

Project and program management address questions like:

Are we carrying out projects well? Are projects on time and budget? Do project stakeholders know what they should be doing?

PWC

Begins

80/20 rule

Belief that 80% of the effects come from 20% of the causes; in consulting, this term is used to imply that 80% of an assignment can be finished in 20% of the time.

Milestones

Black Diamond - significant point or event Word - 2666 Alt+X U2666

Root cause

Bottleneck that causes the problem

Root cause

Bottleneck that causes the problem. Ex: "The root cause of the problem lies in the poor construction of the bridge"

Break-Even Point

Break-Even Volume = Fixed Costs / Sales Price - Variable Cost Per Unit

Structural engineers

Calculate the deflections foundation sizes, beam thickness and strength of floor slabs Ensure that building can withstand forces of wind and seismic gravity Surveyors, Mechanical engineers, electrical engineers

Actionable

Can be acted upon or can be done. For example: "That recommendation is not actionable because we do not have the managerial talent to implement it."

Risks

Can be positive

Programme Phase

Client has an idea about the project and analyses conditions for its execution.

Utilization rate

Client service hours vs. time on beach. If below 50%, prepared to be "right sized." Most top firms target 70-80%.

Project Scope Management

Collect requirements define scope create a WBS

Management Procurement

Commonly used in fast track projects, large complex projects of long duration. Also used in problematic circumstances Categories: -Management contracting -Construction Management -Design and Manage

Upward Management

Communicating your needs to your supervisor to establish a strong relationship of cooperation and understanding in the workplace.

Benchmarking

Comparing one's business processes and performances metrics to industry bests or practices from another industry

Full-fledged

Completely developed or established

When to use traditional procurement

Complex projects Consultant design is warranted Client wants to appoint owners and designers separately Price certainty wanted before construction Product quality required Balance of risk placed between client and constructor

WBS Sample

Construction of a house: -Internal >Electrical (rough in elec, HVAC) >Plumbing (rough in plumbing, set fixtures, test and clean) -Foundation >Excavate (pour concrete, cure and strip forms) >Steel Erection (steel columns, beams, joist) -External >Masonry work (lay, install tile in toilet room, roofing) >Building finishes (paint walls, ceiling tile)

On the Beach/ On the Bench

Consultant not currently staffed on an engagement

Gannt Chart

Created in 1910

Project Management Benefit

Creates a structure and process that enables a project to be kept under control

Portfolio evaluation criteria

Criteria which need to be assessed in order to enable prioritization of the project.

Debt-to-Equity Ratio

Debt-to-Equity Ratio = Total Liabilities / Total Equity

Leader for the design

Depends on nature of the project On building and residential projects: Architects are lead designer Engineer brought in after basic concept is worked out before details are developed On infrastructure and industrial sector projects: engineer is the lead designer Architect is brought in to work on the aesthetics

Constraint

Difficulty; draw- back; etc.

Proper Planning

Does not guarantee project success

Function

E.g: HR, Finance, Operation, Strategy, etc.

Function

E.g: HR, Finance, Operations, Strategy, etc. Ex: "IT systems are vulnerable while HR and Finance functions also show gaps"

ES = EF pred

Earliest start time is the finish date of a predeccessor

Early Finish

Earliest time an activity can finish

Cutting costs - external cost anlaysis

Economy, interest rates, government regulations, transportation/shipping strikes

Up or out

Employee promotion policy where if you're not promoted "up", you're counseled "out" of the company. Many consulting firms use up or out but not all.

Defined Contribution Plan

Employer contributes a certain sum each period to the employee's retirement account. The employer makes no promise regarding the future value of the plan assets; thus, the employee assumes all of the investment risk

Key point in risk governance framework

Employing a risk governance committee and a chief risk officer (CRO)

EOD

End of Day

Deliverables

End products of consulting projects

Direct Cost

Energy, materials, labor, time, other resources

Material Vendors

Ensure materials needed arrive to project site on time in correct form

CLOSING

Entering final status of finished project Printing final reports Review and analyze performance of the project Lessons Learned

Equipment manufacturers

Equipment may be purchased or rented

Constructors

Estimators, schedulers, purchasing agents Party who brings together all the different elements of the construction process into single concentrated effort Responsible for the interpretation of the contract documents and physical construction of the project

Right-sized

Euphemism for downsized; more delicate way to say "fired a bunch of people".

Bottom-up

Expression meaning to look at the smallest units possible to initiate analysis (eg, bottom-up analysis of a company would start with its lowest-level employees and then work its way to upper management). Also easily confused (or misspoken) as bottoms-up (to drink a glass clean).

Resource Leveling

Extends project time and aims to minimize period by period variations in resource loading by shifting tasks within their slack allowances

M&A - price questions

Fair? Affordable? How to pay? If the economy sours...?

True or False: Change in human systems has much more to do with the ability of those who govern than the consent of the governed.

False

Process areas

First the project initiation state, the project planning or design stage, project execution or production stage, the project monitoring and controlling systems and project completion

Push back (verb form) or Pushback (noun)

Formerly the sole domain of airplanes leaving their gates, this term is now used to indicate resistance and/or disagreement, without actually using those terms; this phrase attempts to avoid any negative connotations of controversy.

Risk Management

Goal is to increase the probability and impact of positive events and decrease the probability and impact of negative events in the project. Project manager needs to understand the risk tolerance levels of the stakeholders (i.e. risk averse, risk seeker, risk neutral).

Soundness

Goodness

UML

Graphical Language for visualizing obj oriented software

Gross Profit Ratio

Gross Profit / Sales

Bird's eye view

High level view

ISO 10006

Guidelines to quality in project management, is an international standard developed by ISO. It is not as popular or widely accepted as the PMBOK.

Critical Path

Has no slack / float time

Ways to cut costs: finance

Have customers pay sooner Refinance debt Sell nonessential assets Hedge currency rates Redesign health insurance

On the same page

Having the same information or thinking in a similar manner.

Engineering

Heavy or horizontal construction Highway, railroad, bridges, utility, dams

Pricing strategies - company questions

How big is it? What products does it have? Is it a market leader? Is it in charge of its own pricing strategies or is it reacting to suppliers, market or competitors?

Organization

How different parts of a company is

When is scope change not considered bad?

If it is managed with change process

Project acceptance

Important part of project implementation and success

Decision Making

Important to get good advice early in the project---initiation phase.

Optimization

Improving toward the best possible outcome

communications protocol

In telecommunications, a communication protocol is a system of rules that allow two or more entities of a communications system to transmit information via any kind of variation of a physical quantity.

Total Benefits of Ownershlp

Include all of the direct, ongoing, and indirect benefits associated with each proposed alternative. life. Benefits can arise from: ▪Increasing high-value work—For example, a salesperson may spend less time on paperwork and more time calling on customers. ▪Improving accuracy and efficiency—For example, reducing errors, duplication, or the number of steps in a process. ▪Improving decision making—For example, providing timely and accurate information. ▪Improving customer service—For example, new products or services, faster or more reliable service, convenience, and so on.

Profit and loss - market questions

Industry size, growth rate and trends Competitors Are competitors facing the same issue? How is the client doing compared to the industry?

project management information system (PMIS)

Information is gathered, integrated, and disseminated to support the project from initiation to closure

Diagnostic assessment

Initial research at the beginning of any consulting project

THE PHASES OF A PROJECT

Initiating Planning Executing Monitoring & Controlling Closing

Real accountability is the willingness to put the well being of the _______ first.

Institution

Ways to cut costs: production

Invest in tech Consolidate production space --> scale, accountability Create flexible production lines Reduce inventories (JIT) Outsource Renegotiate with suppliers Consolidate suppliers Import parts

Portfolio Manager (PfM)

Is in charge of collecting all project and program information to enable the PEB and PRT to take informed decisions, builds and maintains the Portfolio Management Framework, and manages the Portfolio Management Office.

Boil the Ocean

Jargon that describes efforts to resolve a task that is too complicated to complete regardless of the person or group's time and resources.

Close the Loop

Jargon used by consultants during meetings to close a thoroughly discussed topic or issue that has been resolved.

Procurement delivery methods

Key requirements for selection: identifying the client, his needs and objectives. Also, identifying the parties involved. Define it in a way that has no bias.

ISO

Largest developer and publisher of international standards of 162 countries

Traits or Skills for a Project Manager

Leadership Influence Communication Poise and Patience Problem Solver Organized Good at delegation

Governance

Leadership & management system

Turnaround - possible actions

Learn as much as possible about company and ops Analyze services, products, finances Secure sufficient financing, so your plan has a chance Review talent and temperament of all employees, get rid of dead weight Determine ST, LT goals Devise business plan Visit clients, suppliers, distributors, reassure them Prioritize goals, get some small success ASAP to build confidence

Industry analysis - current industry structure questions

Life cycle (growth, transition, maturity) Performance, margins Major players, market share Industry changes (players, tech) Drivers (brand, size, price, tech)

Project schedule

List of all activities of a project with intended start and end dates linked by dependencies and constraints of a project

Success

Maintain interest of customers until the end of the project

Profit and loss - revenue questions

Major revenue streams and % of total? (Anything unusual in balance of %s?) Have the %s changed lately?

Utilization

Make the best use of something

Starting a new business questions

Management Market and strategic plans Distribution channels Products and services Customer Finance

cost management

Management of cost related activities achieved by collecting, analyzing, evaluating, and reporting cost information used for budgeting, estimating, forecasting, and monitoring costs.

Core market questions

Market size, growth rate, trends Where it is in its life cycle (emerging, mature, declining) Industry drivers Customer segmentation(s) Industry changes (M&As, tech) Dist channels Major players, market share Prod differentiation Barriers to entry and exit

Market perspective

Market understanding

Market Perspective

Market understanding. Ex: "The first phase in our project is to get a big-picture of market perspective."

Net present value (NPV)

Measures the profitability in corporate budgeting to assess a given project's potential return on investment. Because of the time value of the currency, it takes into account the compounding of the discount rate over the duration of the project.

Milestones

Mini goals

Milestones

Mini goals - such as "the company passed the $6 million milestone this year."

Management contracting

Most of the risk is on the client because there isnt clarity on cost or program bids -Used in large and complex projects -Flexibility is a key requirement -Projects that require labor, materials, and supply -Projects that need different contractors Advantages: -Completion on time in good quality Disadvantages: -Expensive, not good for inexperienced client

Net Present Value

Net Present Value (NPV)—NPV focuses on the time value of money..

Net profit ratio

Net profit / sales

Greenfield

New opportunity. For example: "Entering the Indonesian insurance market is a true Greenfield opportunity for the Company."

When presenting the picture you should?

Not overload the organization with too many issues

POA

Plan of action

Scheduler

Planner Need to understand construction process Need to define construction activities Need to understand relationship among activities Strong background in construction but learn actual skill on the job Monitor job process, coordinate subcontractors, analyze changes and impacts of delays, solve problems

pure factor portfolio

Portfolio that has been constructed to have sensitivity equal to 1. Only exposed to GDP risk.

Socialization of project

Provide individuals with a heads up on what is going to happen and why

Big Three

Refer to MBB

Big Four

Refers to Deloitte, PwC, Ernst & Young, and KPMG, the four largest international companies offering accounting and professional services.

Value Proposition

Selling point; what customers need

Pricing strategies - partition pricing

Separate prices for separate parts of product/service Look at industry norms

INITIATING

Setting the project goal Identifying start or finish dates Identifying the project manager Identifying project budget and quality considerations

CAPM-based measures

Sharpe Ratio Treynor Ratio M^2 Jensen's Alpha

When managing a meeting for action you presentation should be?

Short and simple

Due Dil

Short for due diligence, this is a reference to the work involved in a thorough research/study of a particular topic. For example: "Have you done the "due dil" on that particular acquisition target?"

Contract Types

Single fixed price Unit price contract Cost plus a fee

Subscale

Small

Work projects

Small project activities with very short durations with definable results

SWAG

Some wild-ass guess. See "WAG."

Change Agent

Someone who acts as a catalyst and takes leadership and/or responsibility for managing part of the change process. - makes shit happen

Developing a new product - product questions

Special or proprietary? Financing? Patented? Substitutions? Adv and disadv? Cannibalizing? Place in product line? Replacing existing product?

Internal Assignment

Specific company projects that are not paid for by the clients.

Ping

Synonym for "contact"; originated as an onomatopoeia for the sound that is emitted when someone receives an instant message, but nowadays can refer to any form of contact including email or even tapping someone on the shoulder.

Infrastructure

System; foundation

Pricing strategies - cost-based pricing

Take all our costs + add a profit to it --> break-even point Not normally a good way bc if misjudge market will have to cut prices --> squeeze margins

Deck

Term for powerpoint presentation

Scope

The agreed-upon list of deliverables and boundaries that underpin any client engagement.

project management

The body of knowledge concerned with principles, techniques, and tools used in planning, control, monitoring, and review of projects.

Best of Breed

The top product in a given industry. It receives the most investment because of its superior quality as evaluated against competitors' offerings.

What is the one product that consultants have to sell?

Their ability to create a positive outcome in a client's business

Synergy

Things when combined create greater value than sum of each part

Primary objectives

Time, Quality, Cost

Frame

To discuss the project and define its scope with a client.

Pricing strategies - strategies

Value add Competitive analysis Cost-based pricing Price-based costing

Indirect cost and overheads

Waste, environmental damage, land use, social issues, other effects.

Levers

Ways to improve things

Levers

Ways to improve things. Ex: "There are three levers to boost sales conversion rate at branches"

5

We act guest first.. We do it right of fix it fast. The guest wins "moments of truth."

4

We are committed to continuous training and development

8

We are good business citizens... We follow the law and positively contribute to our community.

Risk-adjusted discount rate

When analyzing investments or projects for profitability, cash flows are adjusted to the present value to ensure the true value of the undertaking is captured.

Scope Creep

When uncontrolled changes in the project requirements lead to longer project duration. It often occurs when the scope and definition of the project are unclear.

Strategy

Where to play, what to play, how to play. Ex: "The client should develop a holistic urban development strategy to become the developer-of-choice for large-scale urban development projects.

Strategy

Where to play; What to play; How to play

Starting a new business - customer questions

Who? How to best reach? How to retain?

WAG

Wild-ass-guess. See "SWAG"

bond

a form of interest-bearing notes payable issued by corporations, universities, and governmental agencies

market model

a regression model, R = alpha + beta * return of M + regression error

job enlargement

addition of tasks to the same skill and responsibility;

Quality assurance

accomplished by quality audits, process analysis, and tools and techniques used in quality control

Buy-in

agreement or support of stakeholders

liabilities

all of a company's financial obligations that have negative value

assets

all of a company's physical or intellectual property that has financial value

operations management

an area of business that is concerned with the production of good quality goods and services, and involves the responsibility of ensuring that business operations are efficient and effective

Subject Matter Expert (SME)

an expert in a given field that is called upon by to expedite research

Six Sigma

asserts continuous efforts to reduce process variation important to overall performance

Industry (Corporate America)

basically every company that isn't a consulting firm

Kick off

contract signing

COGS

costs directly related to the purchase or production of whatever the company sells

Cycle Time Reduction

decreasing the time it takes to complete a business process

State roles

department of environmental protection department of transportation State inspector general

EBITDA

earnings before taxes, depreciation, and amortization

Industrial

emphasis on production project requires a unique team to plan, design, construct and maintain the project

minimum-variance frontier

graph of the expected return/variance combinations for all minimum-variance portfolios

semi-active, risk-controlled active, enhanced index strategies

hybrids of passive and active strategies

expense

is reported on the income statement. It is a cost that has expired, was used up, or was necessary in order to earn the revenues during the time period indicated in the heading of the income statement.

Non-Disclosure Agreement

legal contract that allows a company to share its intellectual property with others, whose input it needs, without unduly jeopardizing that information

Supply Chain Management

manages supplier relationships in order to gain competitive advantage in cost, service, and quality (streamlines logistics and procurement and integrates business functions with suppliers)

Program Management Office

organization under which projects can be centralized and coordinated

Straw Man

outline of a document without its stuffing or content

current portion of long term debt

portion of debt that comes due in the current year

work breakdown structure (WBS)

project management and systems engineering: a deliverable-oriented decomposition of a project into smaller components that organizes the team's work into manageable sections.

Scope

provides the parameters within which you do the project

gross profit

revenue minus the cost of goods sold

Agenda

should be distributed before a meeting

Strategic Inflection Point

stage when a company's competitive position goes through a transition (point at which the organization must alter the path it is on, adapting itself to the new situation or risk going into decline)

Individuals or organizations who are affected by a project best define

stakeholders

SWOT

strengths, weaknesses, opportunities, and threats. these four factors provide a framework which an organization can use to conduct a structured analysis of its operations

In early stages of a project

tactics is NOT more integral to success than strategy

Deliverables

tangible outputs or results promised to clients including decks, excel models, research papers...

maximum possible risk reduction is equal to

the average correlation

My plate is full

"Help, I'm drowning," or "I would kill myself before I'd work on your project."

Let's touch base next week

"I don't want to talk to you now," or "You are on a short leash and you need to report back to me."

Let's close the loop

"Let me make sure in advance that I'm not going to get into trouble for this one."

Earned Value

% Complete multiplied by the amount spent on the different phases

Treynor Measure

- based on systematic risk (beta) rather than total risk - Treynor measure is based on slope and has the same beta but lies on the SML

Reduce Portfolio Risk

- combining assets w/ low correlations

No-load funds

- do not charge additional fees for purchasing shares (up-front fees) or for redeeming shares (redemption fees)

Security Market Line

- implementation of the CAPM and applies to all securities whether they are efficient or not - can assist in security selection and optimal portfolio construction

Risk tolerance

- key element of good risk governance - delineates which risks are acceptable, which are unacceptable, and how much risk the overall organization can be exposed to

Real return

- nominal return adjusted for inflation - ex. an investor who earns a nominal return of 7% over a year when inflation is 2%. The investor's approximate real return is simply 7-2=5%. The investor's exact real return is slightly lower 1.07/1.02 - 1 =0.049 =4.9%

Indifference curve

- plots combinations of risk (standard deviation) and expected return among which an investor is different - indifference curves slope upward for risk-averse investors because they will only take on more risk (standard deviation of returns) if they are compensated with greater expected returns - an investor who is relatively more risk averse requires a relatively greater increase in expected return to compensate for a given increase in risk - more risk-averse investor will have steeper indifference curves, reflecting a higher risk aversion coefficient

Security Characteristic Line

- regression line - line of best fit of all the securities - the slope of the security characterist line is (Covim/standard dev, m, squared) ie. same as beta

Risk exposure

- the extent to which an entity's value may be affected through sensitivity to underlying risks

Capital allocation line

- the line representing these possible combinations of risk free assets and the optimal risky asset portfolio - represent a set of possible efficient portfolios

After-tax nominal return

- the return after tax liability is deducted

Legal risk

- the risk of being sued or the risk that a court will not uphold an agreement

Model risk

- the risk of using the wrong model for analysis or the risk of using the right model incorrectly

Tail risk

- uncertainty about the probability of extreme (negative) outcomes - commonly used measures of tail risk (sometimes referred to as downside risk) include Value at Risk and Conditional VaR

Investor that is less risk averse

- will optimally choose a portfolio with more invested in the risky asset portfolio and less invested in the risk-free asset

Disadvantages of traditional procurement

-Project cannot start before design phase is finished -Overall project can take longer -Client can't make updates to the design by the contractor in construction phase bc it was not done during the design stage

Ways to cut costs (labor)

1. Cross-train workers 2. Cut overtime 3. Reduce employer 401(k) match 4. Raise employee contribution to healthcare premium 5. Institute four 10hr days instead of five 8hr days 6. Convert workers into owners with stake in company success 7. Contemplate layoffs 8. Institute across the board pay cuts

Ways to increase volume in "growth" case

1. Expand number of distribution channels 2. Increase product line through diversification of products or services (with ones that won't cannibalize existing sales) 3. Analyze the segments of the business that have the highest future potential 4. Invest in a marketing campaign 5. Acquire a competitor (especially if question is about increasing market share) 6. Adjust prices (lower them to increase volume and raise them to decrease demand or increase profits) 7. Create seasonal balance

Nominal Group Technique Steps

1. Gather the core team for a risk workshop 2. Begin by asking each person to identify potential areas of risk 3. Using a flip chart or whiteboard to collect information from the team

Factors signaling project closure

1. Incomplete requirements 2. Lack of user involvement 3. Lack of Resources

Reasons to purchase for M&A case?

1. Increase market access, boost the brand and increase market share 2. Diversify the company's holdings 3. Pre-empt competition from acquiring the company 4. Inherit management talent 5. Obtain patents or licenses 6. Gain from synergies, cost savings, cultural integration, and expansion of dist. channels 7. Gain from tax advantages 8. Increase shareholder value

Processes and Process Groups

1. Initiating- 2. Planning- : develop a project management plan, estimate costs, plan communications 3. Executing- direct execution of the project, procure materials and services 4. Monitoring and Controlling- : report on project performance, control cost and schedule 5. Closing- bring project activities to a close, obtain final approval from customer

Key challenges to success

1. Lack of Planning 2. Lack of Resources- Skills, Time, Money 3. Scope Creep

Questions to ask about market? WICIDMMPB

1. Market size, growth rate, and trends 2. Where in its lifecycle 3. Industry drivers (brand, price, technology, or dist. channels, etc.) 4. Customer segmentation 5. Industry changes (M&A, new tech, major changes) 6. Distribution channels 7. Major players & market share 8. Product differentiation - differences between comp. products 9. Barriers to entry and exit

Factors for using Agile Methods include

1. Prioritization of tasks is done by key stakeholders 2. Works well with true teamwork and collaboration 3. Shorted development cycles

Key roles of project initiation

1. Stakeholder 2. Champion - principal advocate committed to the project and its success 3. Sponsor - provides the funding for the project 4. Customer - determines if the project is successful or not 5. User - uses the products of the project

Stakeholder analysis includes

1. Stakeholder characteristics 2. Level of interest of stakeholders in the specific project 3. Ability to affect the project policies through power and / or leadership

Considerations when developing new product (thinking about product)

1. What's special or proprietary about it? 2. Is the product patented? For how long? 3. Similar/alternative products 4. Advantages and disadvantages of this product 5. How does new product fit in with rest of product line? 6. Can sales force sell it?

A project (3 things)

1. has a beginning and a end 2. expends resources 3. has constraints and requirements that may include scope, budget, schedule, and resources, performance factors, and creation of value to stakeholders

The blueprint for traditional installation-style implementation is to: (pick all that apply)

1.) Articulate a vision 2.) Define measures for the change 3.) Set standards for what to expect

What are the two types of approaches when you are recognizing a need?

1.) Conventional approach 2.) Sustainable approach

Gross Margin

= (Revenues - Cost of Goods Sold)/(Revenues)

IC of a market timer

= 2(%correct) -1

Campus Hire

A candidate who is hired directly out of a university or business school. Compare to experienced hire.

Campus hire

A consultant hired directly from undergraduate or business schools, as opposed to "experienced hire."

Case

A consulting project. (Also called a Study or an Engagement.)

A commitment that is conditional on the response from another is what?

A contract

Nominal Group Technique

A decision making tool used to understand and use the opinion of each and every project member

Project Request Form

A form that is submitted to request funding from the portfolio for a new initiative.

Gantt Chart

A horizontal bar chart that displays the project's work breakdown structure and start and finish dates of each category. It was named after Henry Gantt, the consultant who introduced it in the early 1900s.

Progress Review

A meeting conducted on a regular basis to review the progress, concerns, and accomplishments of the preceding period.

Benchmarking

A method of comparing a company's set of policies, strategies, or systems in relation to the best practices within or outside the industry. This allows the company to develop plans for improving the business.

Progress review

A periodic meeting (either internal or with the client) to review the progress made in the preceding period.

Mission-Critical

A product, concept, analysis, or service that is irreplaceable. For example: "Do we really need this expensive item? Is it mission-critical?"

Charge Code

A project code to which consultants charge work-related costs.

prototype

A sample or a model built to test a concept or product best defines

Workplan

A schedule for completing a project or set of tasks for a project. The workplan is a dominant issue in all Consulting projects.

business process model

A sequential representation of all functions associated with a specific business activity.

On the beach

A term that describes consultants who do not get billable projects from clients and therefore have sufficient time for recreation.

Sniff Test

A term that refers to evaluating the feasibility or rationality of an analysis.

Time Poor

A term used to describe people with busy schedules.

Slopey Shoulders

A term used to describe someone who passes on responsibility to another to avoid blame or boredom.

business model

A term used to represent core aspects of a business, including purpose, target customers (e.g., consumers or other businesses), product/service offerings, strategies, organizational structures, trading practices, distribution model (e.g., direct sales, wholesale, retail) and operational processes and policies. In an SC environment, special attention must be given to how the resources from different members of the chain will be combined to deliver unparalleled value.

Vision Statement

A vision statement articulates and inspires purpose

POA

Acronym for Plan Of Action.

Backward pass

Add late start and finish.

Profit and loss - new product questions

Advantages and disadvantages to new products?

Alignment

Agreement

Fitness

Appropriateness

Design Phase

Architects and engineers produce construction drawings according to the client's requirements.

Critical Chain Project Management

Based on algorithms derived from the Theory of Constrainsts

Buckets

Categories; this is the extent of this word's definition, so it remains a mystery why people choose to employ the former term; also used as a transitive verb to mean 'categorize'

Driver

Cause

Transformational Change

Changes its strategic direction or re-engineers its culture or operations in response to dramatic changes - Technology - Mergers

Portfolio entry criteria

Characteristics a newly proposed project needs to fulfil in order to be considered for further evaluation.

product scope

Characterize a product, service, system or schedule

End-to-end

Comprehensive; complete

CIP

Continuous Improvement Plan; set of activities to bring gradual yet continual improvement to a process through constant review

Industry analysis - questions

Current industry structure Suppliers Future

Off the Clock

Description for a consultant who is NOT working on a billable project.

Off the Bench

Description for a consultant who is working on a billable project. Similar to On the clock.

Gaps

Difference

The Consultants primary task is to present a fresh picture of what has been __________.

Discovered

Circle Back

Discuss, follow up, or review the progress of an issue at a later time.

Schedule Performance Index

Earned Value / Planned Value

EBITDA

Earnings Before Income, Tax, Depreciation, and Amortization

EBITDA

Earnings before interest, taxes, depreciation, and amortization; one of the ultimate business metrics.

Developing a new product - market strategy questions

Expansion of customer base Prompts to competitive response Barriers to entry Major players and market share

Owner representative

Facility managers: most common owner representative. Found in large organizations and institutions like schools universities and hospitals Job is to understand the goals and objectives of their organization and ensure that facilities are planned to support them Outside consultants: small organizations without large in-house departments often hire consultants

True or False: When you are controlling a meeting you need to clearly state you are controlling the meeting and the act that way regardless of what happens.

False

True or false: A decision to support change is usually made on logic and reason alone?

False

Core business

Flagship; main activity

CMMI Level 5

Focused on continuous process improvement

Organizational Breakdown Structure

Hierarchy definition of the team involved Who is there and what is their work Displays organizational relationships and then uses them for assigning work to resources in a project Allows complex projects to be broken down, providing a more organized representation of the work Provides an organizational structure for the project as it moves to completion Main intent is to communicate how those tasked with delivering the project will be organised and structured as a Project Team Allows for the appropriate resources and responsibilities to be assigned

Pricing strategies - product questions

How does it compare to that of competition? Are there substitutions/alternatives? Where is the product in its growth cycle? Is there a supply-and-demand issue at work?

additivity principle

IR (a+b)^2 = IRa^2 + IRb^2 take square root in the end

Risk Management Framework

Identify Analyze and Prioritize Develop a response Establish Reserves Continuous risk management (through monitoring, updates, etc)

Project Management team must

Identify stakeholders Determine their needs and expectations Manage and influence those expectations

Residential construction

Includes single family houses and apartment building complexes Privately funded by individual owners or developers Developers serve as surrogate owners and take charge, making contractual agreements for design and constructors and financing the sale of the completed structures Designs performed by architects and engineers Construction executed by builders who hire subcontractors for the structural, mechanical, electrical and other specialty work

Growth and increasing sales - industry questions

Is it growing and how is the client growing compared to the industry? Growth relative to market share? Changes in market share? Are the clients' prices in line with its competitors? Customer polls? Competitors' strategies (marketing and prod dev)?

Profit and loss case strategy

Look at external factors first: economy, markets, weather Analyze company: revenue and profit trends, customers, products, brand, channels revenue streams and changes, costs and changes

MBB

McKinsey, Bain, BCG aka the "Big 3″

Ad hoc

Non-structure

Roadmap

Overall timeline- based plan

Heirarchy

Owner -Contractor >PM >Onsite >Tech >Mech -Consultant

Collection of best practices within Project Management

PMBOK

Purchasing Agents

Procurement -Buys subcontracts once job is won -Negotiates to get best price while making sure all contract requirements met -Understand building materials, prices, and construction process -Have broad business sense -Persuasive

Developing a new product questions

Product Market strategy Customers Financing

Profit Margin

Profit Margin = Net Income / Sales

Let's think out of the box

Really means, "Can you creatively anemic people please come up with something?" The person who says, "Let's think out of the box" is usually desperate for a new idea and surrounded by people who are not known for generating ideas. So the phrase is actually an announcement that says, "I'm in trouble."

I need someone who can hit the ground running

Really means, "I am screwed." Because no one can hit the ground running. You need to at least assess what race you're in and who else is running.

Strategic Management

Science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives.

Feasability

Should focus on whether a particular alternative is doable and worth doing. Consider the following: *Economic Feasability *Technical Feasability *Organizational Feasability ▪Other feasibilities—Depending on the situation and the organization, a business case may include other issues, such as legal and ethical feasibility.

Footprint

Significant and powerful presence in something

Henry Gantt

Studied the order of work operations in great detail Developed charts which details the progress in large projects Charts used ever since

Leverage

Taking the advantage of

Coercive Power

Targeted persons comply in order to avoid punishment

Deliverables

Tasks to be completed.

Thinking out of the Box

The ability to be creative or innovative in solving a difficult problem. "Thinking out of the box" typically is a blanket solution to a difficult problem that no one has solved yet.

Risk appetite

The amount and type of risk that an organization is willing to take in order to meet their strategic objectives.

Business Case

The business case defines why the project is being undertaken and provides the financial measurements

Portfolio Management Framework (PMF)

The central repository containing a description of the agreed Portfolio Management practices adopted by the organisation and its governance arrangements.

Early Start

The earliest possibly time that an activity can start.

Reliability

The extent to which a product is unlikely to fail or break down

Late finish

The latest time that an activity can finish

Minimum Efficient Scale

The minimum efficient scale is the smallest amount of production a company can achieve while still taking full advantage of economies of scale with regards to supplies and costs. In classical economics, the minimum efficient scale is defined as the lowest production point at which long-run total average costs (LRATC) are minimized.

Utilization

The number of hours billed to clients, usually expressed in percentages.

Chargeable

The number of hours you get to bill a client for

PROJECT SUCCESS

The project met scope, time, and cost goals. The project satisfied the customer/sponsor. The results of the project met its main business or clinical objective.

Segment

The small piece after breaking down big problem, industry, workstream, etc.

Interventions

These are planned activities targeting specific outcomes such as improving individual, group, or organizational performance or well-being.

Touch base

To catch up with someone, typically a person with whom you've not had much contact lately. For example: "I've been dealing with another client all week and I know I owe you some numbers. We'll touch base after my afternoon conference call."

Fact pack

Typically a "pack" of information that provides the essential "facts" on a project/industry/company, provided or compiled in the first 3 days of an engagement.

MONITORING &CONTROLLING

Updating project Managing resources and tasks Meet management timing, resource, and cost objectives Changing project (On-going)

6

We believe in continuous improvement... In getting better day-by-day and shift-by-shift.

Capability

What can you do

Competitive response - competitor introduces new product - questions

What is the competitor's new product and how does it differ from what we offer? What has the competitor done differently/changed? Have any other competitors picked up market share? Have the consumer's needs changed? Did they increase or expand into new channels?

interoperability

a characteristic of a product or system, whose interfaces are completely understood, to work with other products or systems, present or future, in either implementation or access, without any restrictions

assets

a company's physical/intellectual properties that has financial value

Activity relationships

a diagramming technique to illustrate the activity's logical relationships: Finish to Start, Start to Start, Finish to Finish, and Start to Finish

balance sheet

a financial document showing the assets and liabilities of an organization

Work Breakdown Structure

a list of tasks broken down into small manageable activities

vendor

a person who sells something, especially a property

project

a temporary endeavor undertaken to create a unique product, service, or result Projects end when their objectives have been reached, or the project has been terminated

ex-post alpha

alpha measured after actual results have become available and is the average realized residual return over a measurement interval = alpha of portfolio + beta p*excess return on benchmark portfolio + random component

investments in individual countries

are passive, indexed investments

Gain Traction

ave a client or senior person engaged in an idea. This is an important concept for selling new Consulting projects, and/or for suggesting an addition or change to a Consulting workplan.

Toolkit

collection of methodologies or tools that consultants can use to help solve a problem

The number of products or operations that are performed at the same time and the resulting degree of difficulty best defines

complexity

COGS

costs of goods sold; costs directly related to the purchase or production of whatever the company sells

Design Phase Outputs

designed using a computer CAD project phases optimized thru BIM

Mutually Exclusive, Collectively Exhaustive (MECE)

grouping principle that allows coverage of every idea without any overlap

using historical numbers

have to estimate very large number of inputs and there is a large amount of estimation error

Government officials

involved early in project w/ respect to zoning approvals and issuing building permits

Late Start

latest time an activity can start without delaying the project

Facility managers

most common owner representative. Found in large organizations and institutions like schools universities and hospitals Job is to understand the goals and objectives of their organization and ensure that facilities are planned to support them

specific

not stereotyped

strategic inflection point

occurs when a company's competitive position goes through a transition. it is the point at which the organization must alter the path it is on - adapting itself to the new situation or risk going into decline. it is concerned with how companies recognize and adapt to "paradigm changes"

market share

percentage of any of its markets that it holds; companies will discount products to saturate the marketplace with them and thereby gain a greater market share

5000 Mile/ 20,000 Foot View

phrase used to describe a high-level, summary view of the situation where most details are omitted. (5000 can be replaced by any large number)

cost-based pricing

pricing method in which some percentage of desired profit margins is added to the cost of the product to obtain the final price

Case Team

project team

program manager

provides leadership and direction for the project managers heading the projects within the program

Key Performance (Success) Indicators

quantifiable measurements, agreed to beforehand, that reflect the critical factors (of the company, department, project)

competition-based pricing

refers to a method in which an organization considers the prices of competitors' products to set the prices of its own products

business operations

repetitive, permanent, or semi-permanent functional activities to produce products or services.

Solvency risk

risk that the entity does not survive or succeed because it runs out of cash to meet its financial obligations

Project schedule network diagrams

schematic depiction of scheduled activities and dependencies (logical relationships of activities); model of sequenced activities

Continuous Improvement Plan (CIP)

set of activities designed to bring gradual, but continual improvement to a process through constant review

company culture

shared values/practices of employees

bundle-ing

term referring to the sales increase strategy that involves increasing the amount of each sale by putting different products together people buy in a package

leveraged buyout (LBO)

the acquisition of another company using a significant amount of borrowed money to meet the cost of acquisition, with assets of the company often used as collateral for the loans, along with the assets of the acquiring company -- allows companies to make large acquisitions without having to commit a lot of capital

business process modelling (BPM)

the activity of representing processes of an enterprise, so that the current ('as is') process maybe analysed and improved in future ('to be'0

PROJECT MANAGEMENT

the application of knowledge, skills, tools and techniques to project activities to meet the project requirements process of initiating, planning, executing, controlling, and closing a project

linear management

the application of reductionism to management problems, often relying on the ability to predict, engineer and control outcomes by manipulating the component parts of a business (organization, operation, policy, process and so on). Business process reengineering (BPR) is a popular example of linear management at work. The key defining characteristic of linear management is that order is imposed - usually from above.

bottom line

the bottom line of an income statement. shows the net income available to shareholders. when a company talks about increasing the bottom line, they mean doing things to either increase the revenue or decrease the expenses so the company's income increases

capital market line

the capital allocation line in a world in which all investors agree on the expected returns, standard deviations, an correlations of all assets

process management

the ensemble of administrative activities of planning and monitoring the performance of a business process. It usually includes (1) defining a process, (2) establishing responsibilities, (3) evaluating process performance, and (4) identifying opportunities for improvement.

A/P

the monies the company owes for goods and services received, but not yet paid for

strike price

the price at which the holder of a stock option may purchase the stock. if the strike price is below the price at which the stock is trading on the open market, the option holder may be able to make a profit. if the stock price on the open market is below the strike price, the options are said to be "underwater." it would make no sense to exercise an underwater option because that would mean buying the stock through the stock option at a higher price than you would pay on the open market

benchmarking

the process of gathering information about other companies in your industry to compare your performance against and to use to set goals

Overall success factor of a project is...

the realized value of the project that can be measured by the project stakeholders

Black-Scholes Equation

used to determine the value or price of a stock option

Professional construction management services

when constructors are hired earlier and asked to provide technical, cost and scheduling advice to the owner. Constructor acts as a constructing consultant.

Compound Annual Growth Rate (CAGR)

year-over-year growth rate of an investment over a specified period of time

Let's run the numbers and see how they look

"I know they look bad on first blush. But the true use of Excel is to keep changing the formulas until you find a format that makes the numbers look good."

I'm calling to touch base

"I want something from you but I can't say it up front" or "I am worried that you are lost and I'm sniffing around for signs to confirm my hunch" or "I'm calling because you micromanage me."

Buckets

"categories" or "groups" when talking about a project

Porter's Five Forces

(Michael Porter's explanation of the five forces that drive industry competition) potential entrants, suppliers, substitutes, buyers, and competitors

3.) People typically do voice their doubts and tell the truth in organizations...

- In private

Credit Risk

- the risk that a counter party will not pay an amount owed

Risk shifting

-hedging with derivatives

Types of power used by PM

1. Reward power 2. Coercive Power 3. Legitimate Power

What does Refreeze look like?

1.) Reinforcement and institutionalization of all the change 2.) Make the change second nature to employees

Return on Assets (ROA)

= (Net Income)/(Total Assets)

ex-post information ratio

= t-statistics of alpha / sq root n

Expense Ratio

= total expenses / sales

In line

About the same. Ex: "The steel plant performed in line with the market average but room for improvement exists."

Change Initiative

An umbrella term for Projects and Programs

Project Charter

Authorizes the project and ensures that necessary resources and management commitments are provided to attain success

CAGR

Compound annual growth rate

Defined Benefit Plan

Employer promises to make period payments to the employee after retirement. Because the employee's future benefit is defined, the employer assumes the investment risk

Profit and loss - increasing volume

Expand into new areas Increase sales (volume and force) Increase marketing Reduce prices Improve customer service

Feasibility

How possible something is

Big 3

McKinsey, Bain, BCG aka "MBB"

Mechanism

Method

project review

Project reviews take place during the lifecycle of a project in order to check the likely or actual achievements of the objectives specified in the Project Management Plan (PMP) and the benefits detailed in the Business Case. They should be planned through the project and aligned to the business cycles, and with portfolio or programme reviews.

Insurance

Property insurance to owner Liability insurance to designers Bonding insurance to constructor Lawyers advise clients on ways to minimize liability and risk

IR of constrained portfolios

TC * IC * sq root BR E(R) = TC * IC * sq root BR * risk

Scope

The area covered by a consulting project, including its purpose and limits.

budget constraint

The limit that the size of a consumer's income (and the prices that must be paid for goods and services) imposes on the ability of that consumer to obtain goods and services.

MOV Statement Format

Time Period MOV 6 months 1 year 2 years

PM Triple constraints

Time, cost, scope

Touch Base

To get in touch with someone in the consulting industry.

True or false: Membership behavior is more vital than leadership behavior?

True

3

We function as a team... "We all look good together, we all look bad together.

Deck

Your Powerpoint slides (anything more than 3 slides), and sometimes referring to the master "deck" for the team.

ex-ante alpha

forward looking *forecast* of residual return while ex-post alpha is backward-looking average of *realized* returns

system(s) integrator

is a person or company that specializes in bringing together component subsystems into a whole and ensuring that those subsystems function together,

SWOT analysis

method of identifying whether to use a component or a feature in a project

goals

objective, measurable expectations set to measure progress toward desired results

FMEA

process in product development and is used in managing operations, and potential failure modes within a system

Back-of-the-Envelope Calculation

rough, on-the-spot estimate

income statement

summarizes a company's revenue and expenses for a specific period of time; usually a quarter or entire fiscal year

Project Selection Decision

▪The project must align with the organization's values, vision, mission, and strategies. ▪The project must provide measurable organizational value that can be verified at the completion of the project.