Glossary

Abstraction (of a system) - A model of a system that hides details (metrics, drivers, functional relationships).

Accumulation - Accumulation, in the sense of a model at the same level of abstraction, refers to calculating the total effect of all other variables on it.

Activity Analysis - Within the context of Activity Base Costing, activity analysis is the identification of activities constituting a product or service, sufficient to allocate costs based on activity execution.

Activity Based Costing (ABC) - allocation of costs. Activity Based Costing (ABC) assumes that the volume of contributing activities is the primary driver of the cost of delivered value and allocates costs according to contributing activity execution.

Allocation - Allocation, in the sense of a model with multiple levels of abstraction, refers to calculating the effect on lower level parameters of a higher level parameter according to the functional relationship between them.

AS-IS Model - The AS-IS model captures processes and products as they are currently practiced.

Behavior (of a Specification) - Behavior is the conceptual action thought, etc., being specified.

Beneficiary - The beneficiary is the receiver of the delivered value.

Condition (of a Specification) - The condition (or pre-condition) of a behavioral specification is the precise context under which the behavior is to be measured, ranging from a single stimulus (eliciting a response) to complex scenarios complete with displays, documents, etc.

Contributing Activities - Contributing activities that respond to drivers from some preceding source e.g. contributing activity and result in a contribution to a successor beneficiary.

Contribution - Contribution is the value added to an expected opportunity to deliver products and services. For comparative purposes, contribution is measured by the net present value of the expected value of the value delivery.

Contribution Analysis - Contribution Analysis is the study of activity impact on expectations of delivered (or returned) value.

Contribution Chain - From a specific contributing activity, a conceptual sequence of contributing activities and contributions, ending the ultimate value delivery made to a beneficiary. A single contribution chain holds all other contribution chains and contribution drivers (except those at the contributing activity) constant.

Contribution Management - Contribution management is the identification and facilitation of local contributions throughout and organization such that the value of customer products and services, shareholder value and other delivered benefits are maximized.

Contribution Network - For a specific value delivery made to a beneficiary and a specific contributing activity, all contribution chains between them.

Contribution System - For a specific value delivery made to a beneficiary, all contribution networks from all contributors of interest that influence that value.

Contributional Thinking - Contributional thinking is the focused efforts by individuals and organizations to maximized their local contribution such that the value of a specific delivered benefit is maximized.

Correlation - Correlation is a measure of the strength of the relationship between two variables. Correlation doesn't guarantee a cause and effect relationship between two variables but is a necessary condition to such a relationship.

Criterion (of a Specification) - The criterion of the specification is the specific category, level or amount required of the measurement.

Customer - The customer (of a supplier) both receives value deliveries and returns value deliveries and the returned value is related to the deliveries.

Delivering Activities - Delivering activities actually deliver the product(s) and/or service(s) to the beneficiary.

Driver (of an activity) - A driver is an independently determined parameter known to influence one or more of an activity's metrics. (see input measures).

Dynamic Model - A dynamic model has outputs depended on inputs and by when they are applied (dependent on time).

Expected Value (of delivered value and delivery time) - As the amount and timing of future delivered value has some degree of randomness, it is appropriate to consider the expected value of value deliveries in a statistical sense, i.e., the value that might be delivered with some stated probability.

Flow Cost Accounting (FCA) - Flow Cost Accounting (FCA) assumes that material flows are the drivers of contribution and allocates costs on the acquisition, transformation and disposition of raw material, finished goods, scrap, waste, etc.

Function (of drivers) - When metrics are a function of drivers then each value of a metric will have one corresponding set of driver values.

HOW-TO model - A HOW-TO model is the projected or proposed processes and products needed to transform the AS-IS to the TO-BE.

IDEF0 - IDEF0 is an ontology modeling methodology where activities are described a function of inputs and resources available and output created by the activity. The various types of concepts captured are activities and their ICOMs, i.e., Inputs = I, Controls = C, Outputs = O, and Mechanisms = M.

Impact Measures - Impact Measures are measures of the direct or indirect effects or consequences resulting from achieving program goals. (From the Government Performance and Results Act or GPRA)

Indicators - Indicators (aka markers) are metrics believed to correlate with other metrics.

Input Measures - These are measures of what an agency or manager has available to carry out the program or activity: i.e., achieve an outcome or output. (see Resources, Drivers, Government Performance and Results Act or GPRA).

Interval Scale - An interval scale is an ordinal scale where preceding or succeeding categories are separated by a fixed unit of measured attribute.

Measurement (of a Specification) - The "measurement" of the specification is the metric believed to capture the behavior of interest. (See also Performance Indicator)

Metric - A scale applied to a conceptual characteristic of interest.

Net Present Value - Net Present Value is the amount invested today at interest that would have the specified future value.

Nominal Scale - A nominal scale contains mutually exclusive categories identified by names.

Ontology - Ontology is the set of base concepts and identifying terminology by which active practitioners in a field (domain) describe their products and processes.

Ordinal Scale - An ordinal scale is a nominal scale where categories are ordered by quantity or degree of measured attribute.

Outcome Measures - An outcome measure is an assessment of the results of a program compared to its intended purpose. (From the Government Performance and Results Act or GPRA)

Output Measures - An output measure is a tabulation, calculation, or recording of activity or effort that can be expressed in a quantitative or qualitative manner. (From the Government Performance and Results Act or GPRA)

Performance Goal - GPRA defines a performance goal as a target level of performance expressed as a tangible, measurable objective, against which actual performance can be compared, including a goal expressed as a quantitative standard, value, or rate. (see Specification)

Performance Indicator - GPRA defines a performance indicator as a particular value or characteristic used to measure output or outcome.

Performance Specification - A performance specification is a specification applied to a target behavior whose performance is of interest.

Process Map - Generally, a process map is a representation of workflow showing at least the expected sequence(s) in which processes are executed to complete and deliver a product or service.

Propagation - Propagation, in the sense of a model at the same level of abstraction, "spreads" the effect of one or more parameters to other values according to its functional relationships.

Ratio Scale - A ratio scale is an interval scale which has a true zero, i.e., matching the zero value of the measured attribute.

Refinement (of a system) - A model of a system that adds more details (metrics, drivers, functional relationships).

Roll Up - Roll up, in the sense of a model with multiple levels of abstraction, refers to calculating the effect on a higher level parameter of lower level parameters according to the functional relationship between them.

Scale - A repeatable method of assigning an attribute to categories (often referred to as "the scale"). The four most common scales are nominal, ordinal, interval, and ratio.

Specification - A criterion applied to a metric.

State Model - A state model is a dynamic model where a set of "state variables" plus future inputs can completely describe the behavior of the system (state captures the effect of entire history of inputs).

Static Model - A static model outputs depend on inputs but is unaffected by the time when inputs are applied (independent of time).

TO-BE Model - A TO-BE model is the projected or proposed processes and products, to a degree capable of simulation (predict performance improvements), mapping (i.e., process planned) from untouched AS-IS organizational functions and implemented using HOW-TO processes and products.

Traditional Cost Accounting (TCA) - allocation of costs. Traditional Cost Accounting (TCA) assumes that volume of product is the driver of individual contribution and allocates costs according to production volume.

Value Chain - The value chain (really a value network) is the conceptual sequence(s) of activities that contribute to the corporate competitive advantage either through cost leadership, differentiation or focus.

Value Stream (map) - A high level presentation of all activities what have value to a customer (see contribution network).