Decision, procurement and transformation terms defined plainly, including where each concept gets misused in practice.
Definitions are easy to find; judgement about the terms is not. Each entry defines the concept, explains why it matters when a real decision is on the table, and describes where it typically goes wrong or gets gamed.
Every entry explains the term, why it matters in a live decision and where it gets misused. Follow the links into the tools and templates that use it.
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Comparing your costs, performance or practices against peers or a reference standard. Genuinely useful for locating yourself in a market; routinely misused as a substitute for understanding it.
A closing round in a competitive process where shortlisted bidders are asked for their last, best price and terms. A legitimate lever, with side effects on every future negotiation you run.
The pace at which an organisation or initiative consumes cash, usually expressed monthly. Gross burn is total spend; net burn is spend minus incoming cash. Divide cash by net burn and you get runway, the deadline built into every plan.
The structured argument for an investment: costs, benefits, risks and options, assembled to support an approval decision. In most organisations, it is authored by the people who want the answer to be yes.
The senior executive who owns a programme's business case: accountable for the benefits, empowered to remove obstacles, and expected to spend personal capital on the outcome. The role most consistently linked to success, and most casually filled.
The accounting distinction between capital expenditure, spend on assets, capitalised and depreciated over years, and operating expenditure, costs expensed in the period they occur. A bookkeeping label that ends up steering technology and sourcing decisions.
The discipline of moving people from current ways of working to new ones, so that the change an organisation paid for actually happens. Routinely budgeted last and cut first.
A formal amendment to an agreed scope of work, adjusting deliverables, timeline or price. The mechanism that keeps contracts honest, and the mechanism through which a winning bid recovers its margin.
The rate at which customers, or their revenue, leave over a period. The single number that most determines what growth costs, and one of the easiest to define into looking better.
The confidential document a client submits to Digital Advisory describing the decision to be pressure-tested: the context, the options under consideration and the questions that need independent challenge.
The value lost for every week or month a decision or delivery slips: revenue not earned, savings not banked, options that expire. The price tag on "let's revisit this next quarter".
A pre-agreed point in a programme or process where work pauses and a named authority decides, on evidence, whether to proceed, redirect or stop. The mechanism that separates commitment from momentum.
A running record of the significant decisions made in a programme or leadership team: what was decided, by whom, on what evidence, and what alternatives were rejected. Cheap to keep, and the only defence against hindsight.
The explicit allocation of who recommends, who must be consulted, who decides and who can veto for a given class of decisions. Cheap to define, expensive to leave undefined.
The rate used to convert future cash flows into today's money, reflecting the time value of money and, in most corporate uses, the riskiness of the cash. One input, quiet authority over the whole investment portfolio.
The structured investigation of a target, vendor or partner before commitment. Designed to test the deal; in practice it often arrives after the deal has already gathered too much momentum to fail.
A deal structure in which part of an acquisition price is paid later, contingent on the acquired business hitting agreed performance targets. A bridge across a valuation gap, built out of deferred disagreement.
Earnings before interest, tax, depreciation and amortisation: a measure of operating profitability used to compare businesses and to price deals. Not a measure of cash, however often it is treated as one.
The dimensions, and their weightings, against which competing options or bids are scored. The place where a selection decision is actually encoded, before any scoring happens.
Digital Advisory's network of selected senior operators: executives who have run functions, companies and programmes, and who provide confidential, decision-specific perspectives in response to client briefs.
The plan for how an offering reaches customers and wins them: target segments, positioning, pricing, channels and sales motion. Routinely costed at a fraction of the build it exists to pay back.
The defined structure through which an organisation or programme makes and oversees decisions: which bodies exist, what each can decide, how issues escalate, and how decision-makers are held to outcomes.
Revenue minus the direct cost of delivering it, expressed as a percentage of revenue. The clearest single reading of whether a business model works, provided you know what was counted as a direct cost.
The document, common in UK deal-making, that records what buyer and seller have agreed in principle before binding contracts are drafted. Labelled subject to contract; treated by everyone as the deal.
The discount rate at which an investment's net present value equals zero, in effect, the annualised return the project's cash flows imply. A single percentage with unusual persuasive power, and known blind spots.
A preliminary document recording the headline terms on which two parties intend to do a deal, price range, structure, exclusivity, timetable, mostly non-binding by design. Mostly.
The smallest version of a product that lets a team test its core value hypothesis with real users. Conceived as an instrument for learning; widely repurposed as a euphemism for a cheap first release.
A framework contract that fixes the standing legal terms between client and supplier, liability, intellectual property, termination, payment, so individual pieces of work can be agreed quickly underneath it. Negotiated once, lived with for years.
The revenue a customer cohort produces today as a percentage of what the same cohort produced a year ago, after churn, downgrades and expansion. The metric that shows whether a business grows without new customers.
The sum of an investment's expected future cash flows, discounted to today's money, minus the money put in. Positive means the investment is expected to create value, on the stated assumptions. The caveat is the substance.
How an organisation arranges people, processes, technology and governance to deliver what its strategy promises. The layer where strategy either becomes real or fails to, without anything visibly breaking.
The time an investment takes to recover its initial outlay from the cash it generates. Beloved by boards for its simplicity, and biased in ways the simplicity conceals.
A limited, real-conditions deployment run before full rollout, meant to reveal how a solution performs with actual users, data and constraints. Its value depends entirely on whether it was designed to learn or designed to pass.
The function that sets delivery standards, tracks programme status and reports progress to sponsors. It controls the information leadership sees, which makes it more powerful than its admin reputation suggests.
The work of actually combining two businesses after a deal closes: systems, processes, organisations, cultures and customers. The phase where the price paid is either justified or quietly written off.
The condition in which a product satisfies real demand in a defined market strongly enough that growth pulls rather than pushes. Easy to claim, hard to evidence, expensive to be wrong about.
A small-scale build or trial designed to test whether an approach is technically and operationally feasible before full commitment. Useful when scoped honestly; dangerous when treated as a soft approval.
An early-stage document used to gather information about vendors and approaches before formal procurement begins. Less binding than an RFP, and more influential than most buyers realise.
A formal invitation asking vendors to propose how they would meet a defined requirement, usually with pricing. The backbone of structured procurement, and a process that measures proposal quality more directly than delivery quality.
The umbrella term for structured sourcing requests: RFI for information, RFP for proposals, RFQ for quotations. Choosing which instrument to issue is itself a decision about what kind of answer you will get.
The living record of a programme's identified risks: what could go wrong, how likely, how severe, who owns the response. Also, frequently, the only place dissent about a decision is written down.
The ratio of net gain to cost, usually expressed as a percentage. The most quoted number in business cases, and the one most shaped by whoever built the spreadsheet.
The current period's figure, revenue, cost, savings, extrapolated to a full year. A quick way to annualise the present, and an assumption-laden way to describe the future.
The gradual expansion of what a project is expected to deliver, without matching adjustments to budget, timeline or the original approval. Not one bad decision, an accumulation of small reasonable ones.
The practice of varying a model's key assumptions to see how much the answer moves. The difference between a forecast that informs a decision and a single number that merely decorates one.
The contractual definition of the service standard a supplier commits to, with measurable targets and remedies, usually service credits, when they are missed. Protection on paper; an incentive structure in practice.
Systems, tools and subscriptions adopted by teams without the knowledge or approval of the IT function. Part governance problem, part unfiltered evidence of what the official systems fail to provide.
A delivery and investment method that divides work into phases separated by decision gates, releasing funding stage by stage as evidence accumulates. Discipline on paper; only as strong as its weakest gate.
The degree to which the people affected by a decision, and needed to execute it, genuinely agree on the problem, the chosen option and its consequences. Often declared; less often real.
The engagement-specific contract that defines what will be delivered, by whom, by when and for how much, under the umbrella terms of a master agreement. The document every delivery dispute is eventually settled against.
The senior governance body of a programme: it approves plans and budgets, resolves escalations, and holds the authority to redirect or stop the work. In principle the brake and the steering wheel; in practice, often just the dashboard.
Money, time or effort already spent and unrecoverable regardless of what happens next. Rationally irrelevant to any forward-looking decision, and rhetorically decisive in a remarkable number of them.
Everything it would actually cost to move from one supplier, platform or partner to another: migration, retraining, parallel running, integration rework, and the risk of the move itself. The number that decides who holds power at renewal.
The additional value two combined businesses are expected to create beyond what they were worth apart, usually cost savings or revenue gains cited to justify an acquisition premium.
The accumulated cost of past shortcuts in software and systems: design compromises that made earlier work faster and make all future work slower, riskier or more expensive.
A short document recording the headline terms of a proposed investment or acquisition: price, structure, control rights, exclusivity. Mostly non-binding, and more decisive than much of the binding paperwork that follows.
The total revenue available if a product or service captured every possible customer for it. The biggest number in the deck, which is why it deserves the most suspicion.
The full cost of acquiring, implementing, operating and eventually exiting an asset or system over its life, not just the purchase price. Only as honest as the boundary drawn around it.
The contract under which a seller keeps running services (IT, payroll, finance operations) for a business it has just sold, while the buyer builds or connects its own. The deal after the deal, priced when leverage has already changed hands.
The condition in which leaving a supplier costs so much, in money, disruption or risk, that staying stops being a choice. Rarely imposed in one move; usually accumulated through decisions that each looked efficient.
The reduced set of vendors taken forward into detailed evaluation. The stage where most of the selection decision is actually made, usually with the least scrutiny.
The cash tied up in running the business day to day: receivables and stock, less what is owed to suppliers. Growth consumes it, deals argue over it, and forecasts routinely forget it.
We pressure-test important decisions with selected senior operators from the Global Board, in confidence, before you commit.