A process typically used when deciding whether to proceed with a new business or project. The breakeven analysis determines the level of sales required such that the new business/project will exactly break even, i.e. neither make a profit nor a loss. Obviously, if the projected sales are lower than this breakeven point then the project should not be undertaken. However, that is a minimum requirement. Projects/new businesses should be undertaken only if they are projected to deliver a rate of return equal to or greater than the company's hurdle rate of return.
Note 1: In the above paragraph, "project" should be read as having a broad definition and would include, for example, simply the purchase of a new piece of equipment.
Note 2: The benefit of a new project within an existing business might not be an increase in sales, but rather, for example, a decrease in the cost per unit of production. In this case, a breakeven analysis is still appropriate because it shows the level of sales required such that those lower costs per unit will cover the fixed costs of the project.
The rate at which cash outflows exceed cash inflows. This is typical in a start-up company that is spending its venture capital while it works to become profitable.
Abbreviated as BAM, it is the capturing of information about the ongoing operations of a business including, but not exclusively, interactions with customers and suppliers in as close to real-time (i.e., as they happen) as possible and practical. This allows the organization to take more immediate action to resolve unexpected problems and to react to evolving conditions.
Software is required to perform BAM effectively and efficiently but, semantically, BAM is a methodology, not a technology. Nonetheless, the software used to perform BAM is often referred to as simply BAM rather than the more semantically correct "BAM software" or "BAM application".
A (usually) detailed and well documented plan for how and where a business will resume operations after a disaster strikes. The plan should take into account as many contingencies as possible and consider all aspects of the business' operations.
Contributed by: Managerwise Staff
business process outsourcing
The contracting of an outside firm to perform business processes that would normally be performed in-house, such as employee benefits administration, accounting, procurement, etc. The theory is that, because the BPO firm specializes in that process (or because it operates somewhere where labor costs are lower), the BPO firm can perform those services at a lower cost than the company purchasing those services. The contracted BPO firm is often offshore in a country with a labor cost advantage, but that is not necessarily the case.
Typically abbreviated as BPO.
A major transformation of how, by whom and/or the order in which regular business tasks are performed within an organization. The transformation is carried out with the goal of achieving significant improvements in the efficiency and/or effectiveness of the reengineered business processes.
Contributed by: Managerwise Staff
business-to-business
Businesses that are involved in selling to other businesses rather than to end consumers. Frequently abbreviated as "B2B".
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