ISDS 2001 : Test 5 Comprehensive Notes (with Highlight)
15 Mar 2019
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ISDS 2001 – STUDY GUIDE for Final Exam – Chapters 3 and 6
1. that BPM encompasses a core set of processes, including financial and operational planning,
consolidation and reporting, modeling, analysis, and monitoring of KPIs, linked to organizational strategy
2. that BPM helps organizations translate a unified set of objectives into plans, monitor execution, and
deliver critical insight to improve financial and operational performance
3. that BPM refers to the business processes, methodologies, metrics, and technologies used by
enterprises to measure, monitor, and manage business performance
4. that BPM is an enterprise wide strategy that seeks to prevent organizations from optimizing local
business at the expense of overall corporate performance; concentrates on enterprise-wide view.
5. that BPM = BI + Planning
6. understand that the closed-loop process (the BPM cycle) links strategy to execution in order to
optimize business performance
7. that the four steps of the closed-looped process are: (1) Strategize, (2) Plan, (3) Monitor, (4) Act and
Adjust
8. that Strategize asks the question, Where Do We Want to Go? It requires setting goals and objectives
9. that Plan asks the question, How Do We Get There? It requires establishing initiatives
and plans to achieve those goals
10. that Monitor asks the question, How Are We Doing? It requires monitoring actual performance
against the goals and objectives
11. that Act and Adjust asks the question, What Do We Need to Do Differently? It requires taking
corrective action
12. that, using the BPM Cycle Figure 3.1 in the notes, (1) Strategize uses mission, values, goals,
objectives, incentives, and strategy maps; (2) Plan uses budgets, plans, forecasts, models, initiatives,
targets, (3) Monitor uses performance dashboards, reports, analytical tools, (4) Act and Adjust uses
interpretations, collaboration, assessment, decisions, acting and adjusting, and tracking.
13. that the basic tasks of the strategic planning process are: (1) Conduct a current situation analysis, (2)
Determine the planning horizon, (3) Conduct an environmental scan,
(4) Identify critical success factors (CSF), (5) Complete a gap analysis, (6) Create a strategic vision,
(7) Develop a business strategy, (8) Identify strategic objectives and goals
14. the descriptions of each of the 8 basic tasks of the strategic planning process
a. Conduct a current situation analysis - Where are we?
Establish a baseline for both financial and operational performance.
b. Determine the planning horizon 规划周期 - Produce plans on a yearly basis with the
planning horizon running 3-5 years
c. Conduct an environmental scan - Here the company assesses standard SWOT (strengths,
weaknesses, opportunities, and threats). It identifies and prioritizes key factors that actually
or potentially affect the company.
d. Identify critical success factors (CSF) - Key factors that delineate the things that an
organization must excel at to be successful.
e. Complete a gap analysis - Gaps reflect what the strategy actually requires and what the
organization actually provides.
f. Create a strategic vision - What should the organization look like in the future?
g. Develop a business strategy based on information from the previous steps, taking into
account the company’s strength, take advantage of opportunities, address weaknesses, and
respond to threats.
Four steps of the closed-looped process are: BPM Cycle
(1) Strategize – Where do we want to go? Goals & objectives
• mission, values, goals, objectives, incentives, and strategy maps
1. Conduct a current situation analysis
▪ Reviews the company’s current situation and establishes a baseline, as well as key
trends, for financial performance and operational performance.
2. Determine the planning horizon
▪ The time horizon is determined by: the volatility and predictability of the market, product
life cycles, the size of the organization, the rate of technological innovation, and the
capital intensity of the industry. The shorter the life cycles, the smaller the organization.
The faster the rate of innovation, less capital intensity, the shorter the planning horizon.
3. Conduct an environmental scan
▪ Strengths, weaknesses, opportunities, and threat assessment of the company. Identifies
and prioritizes key customer, market, competitor, government, demographic, stakeholder,
and industry factors that potentially affect the corp.
4. Identify critical success factors (CSF)
▪ Delineate those things that an organization must excel at to be successful in its market
space. (product-focused company = product quality & innovation)
5. Complete a gap analysis
▪ Identify and prioritize the internal strength and weaknesses in an organization’s
processes, structures, and technology and applications. What the strategy requires and
what the organization actually provides.
6. Create a strategic vision
▪ Picture or mental image of what an organization should look like in the future- the shift in
products and markets. Identifies the as-is state and the desired state.
7. Develop a business strategy
▪ Strategy that is based on the previous steps but is consistent with strategic vision. Exploit
the strengths, take advantage of opportunities, address weaknesses, and respond to
threats. Needs to be internally consistent, the culture is aligned with the strategy, and that
resources and capital are available to implement the strategy.
8. Identify strategic objectives and goals
▪ A strategic objective is a broad statement or general course of action that prescribes
targeted directions for an organization. Needs to be converted into a well-defined goal.
▪ A strategic goal is a quantification of an objective for a designated period of time. Guide
operational execution and allow progress to be tracked against overall objectives.
(2) Plan – How do we get there? Plans to achieve goals
• budgets, plans, forecasts, models, initiatives, and targets
• requires operational and financial planning and budgeting
• operational planning:
1. like a project plan that is designed to ensure that an organization’s strategy is realized
2. translates an organization’s strategic objectives and goals into a set of well-defined tactics (action
steps) to bring about expected results for some future time period
3. Can be:
▪ Tactic-centric
• Best practice organization use tactic-centric operational planning
▪ Budget-centric
(3) Monitor – How are we doing? Monitors actual performance
• performance dashboards, reports, analytical tools
1. framework for monitoring performance should address:
▪ What to monitor
▪ How to monitor
(4) Act and Adjust – What do we need to do differently? Corrective action
• interpretations, collaboration, assessment, decisions, acting and adjusting, tracking
15. the definition of strategy gap: the difference between the current performance of an organization
and the desired performance as described in the mission statements, objectives, and goals
16. that the PLANNING requires operational and financial planning and budgeting
17. the definition of operational plan; know that an operational plan is like a project plan that
is designed to ensure that an organization’s strategy is realized.
Know that the operational plan: translates an organization’s strategic objectives and goals into a set of
well-defined tactics (actions steps) to bring about expected results for some future time period Strategic
objectives : goals → Tactics → Results
18. that operational planning can be (1) tactic-centric or (2) budget-centric
19. that best practice organizations use tactic-centric operational planning
20. that an organization’s strategic objectives and key metrics should server as top-down drivers
(management driven)
21. that a comprehensive framework for monitoring performance should address two key issues: (1)
what to monitor and (2) how to monitor.
22. that a cybernetic 控制论 system has (1) inputs, (2) a process for transforming inputs into outputs, (3)
a standard or benchmark for comparing to the outputs, and (4) a feedback channel to allow
information on variances between the outputs and the standard to be communicated and acted upon
A Diagnostic Control System is a cybernetic system
that has inputs, a process for transforming the inputs into outputs, a standard or benchmark
against which to compare the outputs, and a feedback channel to allow notification on
variances/differences between the outputs and the desired standard.
***Made 20 Qs on the test of DCS
This requires an information system that can:
1. set a goal in advance
2. measure the output (the CSF at a particular point)
3. calculate relative or absolute performance
Document Summary
Establish a baseline for both financial and operational performance. Determine the planning horizon - produce plans on a yearly basis with the planning horizon running 3-5 years. Conduct an environmental scan - here the company assesses standard swot (strengths, weaknesses, opportunities, and threats). It identifies and prioritizes key factors that actually or potentially affect the company. Identify critical success factors (csf) - key factors that delineate the things that an organization must excel at to be successful. Complete a gap analysis - gaps reflect what the strategy actually requires and what the organization actually provides. Develop a business strategy based on information from the previous steps, taking into account the company"s strength, take advantage of opportunities, address weaknesses, and respond to threats. The shorter the life cycles, the smaller the organization. The faster the rate of innovation, less capital intensity, the shorter the planning horizon: conduct an environmental scan, strengths, weaknesses, opportunities, and threat assessment of the company.
