Deck 3: Business Performance Management

Question 1

In a budget-centric operational plan, tactics are established to meet the objectives and targets established in the strategic plan.

Answer 1

False

Question 2

The primary challenge of dashboard design is to display all the required information to be displayed clearly and without distraction on a single screen in a manner that can be assimilated quickly.

Answer 2

True

Question 3

Business performance management (BPM) is an outgrowth of decision support systems (DSS), enterprise information systems (EIS), and business intelligence (BI).

Answer 3

True

Question 4

Six Sigma is drastically different from other business initiatives.

Question 5

The average knowledge worker spent less than 20 percent of his or her time focused on higher-value analytical and decision support tasks, according to the Saxon Group's findings.

Question 6

An effective performance measurement system should not change measurements even when the underlying processes and strategies change.

Question 7

With comparative measures, it is important to point out whether a particular number is good or bad and whether it is trending in the right direction. Without these designations, it can be time-consuming to determine the status of a particular number or result.

Question 8

A KPI represents a tactical objective and measures performance against a goal.

Question 9

Both balanced scorecards and Six Sigma are performance management tools and methodologies.

Question 10

Operational dashboards are used by managers and analysts to track, on weekly basis, raw data generated from departmental processes and projects.

Question 11

The term business performance management (BPM) refers to the business processes, methodologies, metrics, and technologies used by enterprises to measure, monitor, and manage business performance.

Question 12

For a low-cost provider such as Wal-Mart, distribution capabilities are a critical success factor.

Question 13

Harrah's closed-loop marketing system has all the hallmarks of a performance management system.

Question 14

A comprehensive framework for monitoring performance should address two key issues: what to monitor and how to monitor.

Question 15

The Palladium Group found that 75 percent of organizations tied their budgets to their strategic plans.

Question 16

Lean manufacturing focuses on the elimination of waste or non-value-added activities, whereas Six Sigma focuses on reducing the variation or improving the consistency of a process.

Question 17

Unlike BPM, DMAIC is an open-loop business improvement model that encompasses the steps of defining, measuring, analyzing, improving, and controlling a process.

Question 18

An operational plan translates an organization's strategic objectives and goals into a set of well-defined tactics and initiatives, resource requirements, and expected results for some future time period, usually, but not always, a month.

Question 19

A data mart forms the base of a closed-loop marketing system that enables Harrah's to define the objectives of its marketing campaigns, to execute and monitor those campaigns, and to learn what types of campaigns provide the highest return for particular types of customers.

Question 20

Six Sigma is a performance management methodology aimed at reducing the number of defects in a business process to as close to zero DPMO (defects per million opportunities) as possible.

Question 21

An organization's strategic objectives and key metrics should serve as ________ drivers for the allocation of an organization's tangible and intangible assets.

A) bottom-up
B) top-down
C) company wide
D) revenues

Question 22

Saxon Group's benchmarking results indicate that best practice organizations:

A) focus on competition instead of on cause-and-effect relationships between tactics and objectives.
B) develop better predictions or plans.
C) are far better equipped to quickly identify changes or problems, diagnose the root causes, and take corrective action.
D) are historic and internally focused.

Question 23

What was the most important service provided by Harrah's Total Rewards program?

A) It provided Harrah's with a vast collection of high volume, real-time transaction data about its customers and their behaviors.
B) The program served to reward customers with cash for their gaming.
C) The program served to reward customers with comps for their gaming.
D) Opulent accommodations and surroundings for loyal customers.

Question 24

Which of the following is the best-known and most widely used performance management system?

A) Dashboard
B) Performance reengineering
C) Balanced scorecard (BSC)
D) Total quality management

Question 25

A ________ delineates the process of value creation through a series of cause-and-effect relationships among the key organizational objectives for all four BSC perspectives--financial, customer, process, and learning and growth.

A) balanced scorecard
B) strategic theme
C) strategy map
D) KPI

Question 26

Which of the following is not a part of a cybernetic system?

A) Inputs
B) Standard
C) Feedback channel
D) Diagnostic mechanism

Question 27

Which of the following is not what an effective performance measurement system should do?

A) Align top-level strategic objectives and bottom-level initiatives.
B) Identify opportunities in a timely fashion.
C) Determine priorities and allocate resources based on those priorities.
D) Maintain measurement when the underlying processes and strategies change.

Question 28

Sigma, σ, is a Greek alphabet letter used by statisticians to measure the ________ in a process.

A) variance
B) mean
C) inconsistency
D) variability

Question 29

Which of the following about Six Sigma is not true?

A) Six Sigma focuses on the elimination of waste activities, whereas lean focuses on reducing the variation or improving the consistency of a process.
B) Most companies use Six Sigma as a process improvement methodology that enables them to scrutinize their processes, pinpoint problems, and apply remedies.
C) Six Sigma is a performance management methodology aimed at reducing the number of defects in a business process to as close to zero DPMO as possible.
D) Six Sigma uses DMAIC, a closed-loop business improvement model that involves the steps of defining, measuring, analyzing, improving, and controlling a process.

Question 30

A(n) ________ plan translates an organization's strategic objectives and goals into a set of well-defined tactics and initiatives, resources requirements, and expected results for some future time period.

A) business
B) operational
C) tactical
D) strategic

Question 31

The term business performance management (BPM) encompasses three key components, which include all of the following except:

A) a set of integrated, closed-loop management and analytic processes, supported by technology, that address financial as well as operational activities
B) an enterprise-wide strategy that helps to optimize local business performance
C) tools for businesses to define strategic goals and then measure and manage performance against those goals
D) a core set of processes, including financial and operational planning, modeling, analysis, and monitoring of key performance indicators (KPIs), linked to organizational strategy

Question 32

An effective diagnostic control system encourages ________.

A) management by exception
B) strict rules
C) democratic rules
D) elite rules

Question 33

Logically speaking, a BPM system consists of three basic parts, or layers. Which of the following is not one of those parts or layers?

A) BPM applications
B) Dashboards and scorecards
C) Information hub
D) Source systems

Question 34

Characteristics of all well-designed dashboards and scorecards include all of the following except:

A) they present a static, real-world view of the data
B) they use visual components to highlight, at a glance, the data and exceptions that require action
C) they are transparent to the user and extremely easy to use
D) they enable drill-down or drill-through to underlying data sources or reports

Question 35

Best practice organizations tend to utilize ________ operational planning, which begins the operational planning process by defining the alternative tactics and initiatives that can be used to reach a particular target.

A) tactic-centric
B) budget-centric
C) cost-centric
D) revenue-centric

Question 36

The effectiveness of a campaign is measured by ________.

A) net cost and productivity
B) relative profitability and net value
C) gross revenue and net income
D) cost and quality

Question 37

BSC translates an organization's vision and strategy into a set of interrelated financial and nonfinancial objectives. All of the following are nonfinancial objectives except:

A) business rules
B) customers
C) internal business process
D) learning and growth

Question 38

Fundamentally, an operational plan is like a project plan that is designed to ensure that an organization's ________ is realized.

A) business policy
B) plan
C) strategy
D) business rules

Question 39

BPM encompasses a core set of processes, including financial and ________ planning, consolidation and reporting, modeling, analysis, and monitoring of KPIs, linked to organizational strategy.

A) strategic
B) tactical
C) operational
D) daily

Question 40

BPM is an enterprise-wide strategy that seeks to prevent organizations from optimizing ________ business at the expense of overall corporate performance.

A) corporate wise
B) global
C) regional
D) local

Question 41

KPIs stand for ________, which are strategically aligned metrics.

Question 42

DMAIC is a ________ business improvement model.

Question 43

________ outline those things that an organization must excel at to be successful in their market space.

Question 44

In recent years, there has been a focus on combining the Six Sigma methodology with the ________.

Question 45

________ focuses on the elimination of waste or non-value-added activities.

Question 46

Six Sigma is a performance management methodology aimed at reducing the number of defects in a business process to as close to ________ as possible.

Question 47

Six Sigma and Lean Production both deal with ________.

Question 48

A ________ delineates the relationships among the key organizational objectives for all BSC perspectives.

Question 49

A ________ is the quantification of an objective for a designated period of time. For example, if an organization has an objective of increasing profitability, that objective is turned into quantified targets.

Question 50

________ refers to both the logical and physical design of a system.

Question 51

In a ________ plan, tactics are established to meet the objectives and targets established in the strategic plan.

Question 52

Most companies use ________ to monitor organizational performance and correct deviations from present performance standards.

Question 53

________ focuses on reducing the variation or improving the consistency of a process.

Question 54

________ is a framework for organizing, automating, and analyzing business methodologies, metrics, processes, and systems to drive the overall performance of the enterprise.

Question 55

________ is used to identify and prioritize the internal strengths and weaknesses in an organization's processes, structures, and its technologies and applications.

Question 56

Dashboards and ________ both provide visual displays of important information that is consolidated and arranged on a single screen so that information can be digested at a single glance and easily explored.

Question 57

A(n) ________ is a standard strengths, weaknesses, opportunities, and threats (SWOT) assessment of the company.

Question 58

A ________ is a set of activities that transform a set of inputs that include suppliers, assets, resources, and information into a set of outputs for another person or process.

Question 59

Targets are measured against a baseline or ________.

Question 60

To achieve a Six Sigma level of performance, the company would have to reduce the number of defects to no more than ________ DPMO.

Question 61

A number of surveys have highlighted the gap that routinely exists in organizations between their strategic plans and the execution of those plans. What are the reasons for this strategy gap?

Question 62

Describe the series of three steps in the discovery-driven planning (DDP).

Question 63

Describe or sketch the BPM cycle.

Question 64

Explain three of the drawbacks or limitations of using financial data as the core of a performance measurement system.

Question 65

What are the three key components of business performance management (BPM)?

Question 66

List the basic ingredients of good performance measures.

Question 67

What are the characteristics of well-designed dashboards and scorecards?

Question 68

Describe the steps in DMAIC performance model.

Question 69

Describe the conditions under which an information system can be used as diagnostic control system.

Question 70

Describe the common tasks in strategic planning process.