Also called business war gaming, a role-playing
exercise involving simulating business moves and countermoves. Business war
gaming applies in the business setting techniques and concepts long found
useful for military planning.
To conduct a business war game, teams are established to
represent stakeholders, such as key customers, suppliers, partners,
competitors, investors, and regulators. Each team is provided a briefing
containing relevant information and knowledge. The game is then conducted
in a series of "rounds," with each round representing a time period
(typically several months to one or two years). The teams meet
independently, in workshop sessions, and use the briefing information to
plan what they would do during the first time period, playing the role and
adopting the objectives of the designated stakeholder. Team members are
encouraged to anticipate the moves of the other players, develop counter
strategies, and determine the resources and funding that will be needed.
Following the completion of the round, players then announce their selected
strategies and plans. In some versions, a computer model is used to
simulate resulting outcomes such as market shares and financial results,
which are used to score the performance of each team. During the second
round the teams consider the plans and strategies of the various players
and modify their own strategies for the following period. This process
continues for an agreed upon number of rounds. Following the game period,
the participants discuss the results and the lessons learned.
War gaming can help build understanding of the business
situation, opportunities, threats and issues; crate recommendations and
suggestions for future actions; identify corporate blind-spots, missing
intelligence on the market and business environment; foster improved
teamwork; and crate awareness of how the market may change over the short
and medium terms.
In the least restrictive sense, software stored on a web
server and delivered to end-users via a
network using the TCP (Internet) protocol. With a web application, all or
at least parts of the software are downloaded from the Web each time
someone runs the application. Most often, Web-based applications run inside
a Web browser. However, Web-based applications can also be largely
client-based, where only a small part of the program is downloaded to a
user’s desktop, with processing done over the Internet on the
Web applications are popular because nearly every
computer has a web browser. The browser serves as a client making it easy
to update and maintain the web application without disturbing or manually
installing software on the potentially large number of client
Many project portfolio
management (ppm) tools are web-based. The tools are coded in a browser
supported language such as HTML, ASP or PHP so they can be accessed by
clients through a web browser. Oftentimes, the software can also be
accessed using smartphones or tablets. The one main version of the software
is installed and maintained on a server where it can be accessed by
A disadvantage of some web-based ppm tools is that the
program may be slower to respond than a typical desktop or client
application; Web-based applications are limited by the speed of one's
Internet connection, while client applications operate as quickly as the
client's processor speed. In addition, most information in Web-based
applications is not accessible when a user is offline.
Software as a Service
(SaaS) is web-based and has become a common delivery model for many ppm
tools. With SaaS, the provider typically has full control of the
application, so most ppm providers use the term web-based rather than SaaS
to indicate that the application is placed on a server that the customer
controls (rather than the provider).
A type of server
whose primary purpose is to connect to the internet and download stored
webpages and files to the user (client) computers in response to their
requests. Web servers use HTTP (Hypertext Transfer Protocol), the basic
network protocol used to distribute information over the internet.
A parameter in a decision model meant to indicate the
importance or significance assigned to a particular objective, criterion, attribute, or other relevant decision
consideration. Weights are commonly used in models based on multi-criteria analysis. For example, a weighted,
additive scoring model for
evaluating projects has the form:
In this equation, Sj is the
total score for the jth project, N is the number of
criteria, wi is the weight assigned to the
ith criterion, and sij is the score of the
jth project on the ith criterion.
Weights are often scaled to sum to one, expressed
In this case, each weight may be interpreted as
indicating the proportional weight assigned to a particular criterion
compared to that assigned to all criteria.
There are two main distinct types of weights, importance weights, which are not
defensible for use in project prioritization, and swing weights, which are.
weighted average cost of capital (WACC)
A calculation of a company's cost of capital in which each source of
capital (e.g., common stock, preferred stock, bonds and any other long-term
debt) is weighted in proportion to the amount of capital that source
contributes to the company. The WACC is the minimum return that a company
must earn on to satisfy its creditors, owners, and other providers of
capital; otherwise they will invest elsewhere.
weighted product model (WPM)
A multi-criteria analysis
(MCA) decision making method analogous to the weighted sum model (WSM) with multiplications
instead of sums. With the WPM, each performance measure is divided by
another performance measures, the ratios are raised to a power specified as
a weight, and the ratios are
multiplied. Mathematically, let xkj denote the
performance of the k'th alternative with respect to the j'th criterion. For
simplicity, assume all of the criteria are benefits; that is, higher
performance is better. The ratio of the performance of the k'th and m'th
alternatives is xkj/xmj.
If the performance of alternative k is better than alternative m with
respect to the j'th criterion, the ratio will be greater than one,
otherwise it will be less than one. Let j denote a
weight indicating the relative importance of the j'th criterion. If there
are M alternatives and N criteria, a metric then that aggregates the
relative performance of alternatives m and k across all criteria while
accounting for the criteria weights is:
If the ratio Skm is greater than
or equal to the value 1, then it indicates that alternative k is more
desirable than alternative m (in the maximization case). The best
alternative is the one that is better than or at least equal to all other
The WPM is a dimensionless analysis because by dividing
each performance measure by itself eliminates the units of measure.
Therefore, the WPM can be used in the common case where different criteria
are measured in different units with no need of performance measure
Like the WSM, the WPM requires independence assumptions
to justify the multiplicative form. Because neither the weights nor
multiplication is particularly intuitive, the method is not used very
weighted sum model (WSM)
Also called a weighted scoring model, simple additive weighting (SAW), and the
additive weighting method, the simplest and most often used multi-criteria analysis (MCA) decision-making
method. The WSM is a special case of an additive, multi-attribute value
function wherein the value contributed by each attribute is linearly proportional to the level of the attribute (the
single attribute value functions, also called scaling functions, are all linear functions). As such, it is subject to the assumptions of the
additive value function; namely, the attributes must
be mutually preferential independent.
The WSM is applied in six steps:
- Identify the alternatives to the decision.
- Select the criteria relevant to the decision.
- Assign scores to each alternative based on its performance relative
to each criterion.
- Weight the criteria.
- Obtain a total or composite score for each alternative by multiplying
its score on each criterion by the weight assigned to the criterion and
sum the results.
- Rank the alternatives by their composite scores.
Mathematically, the weighted sum model can be
In this equation, Sj is the
total score for the jth alternative, N is the number
of criteria, wi is the weight assigned to the
ith criterion, and sij is the score of the
jth alternative on the ith criterion.
The challenge for using the weighted sum model is
satisfying three requirements essential for the results to make sense.
First, weighted summation can only be applied if the attributes are
additive independent relative to one another. This assumption basically
means that the value of achieving any score on any criterion cannot depend
on the score achieved on any other criterion. See a formal test for
determining additive independence. Unfortunately, in many situations
additive independence is an unrealistic assumption.
Second, the model is only applicable if the scores
assigned to each criterion are expressed in units of preference or
desirability such that increasing the score for a criterion by a given
number of units produces exactly the same increment to desirability or
value regardless of what the starting score is. Satisfying this requirement
almost always means having to transform units, a process referred to as
Finally, the weights assigned to the criteria must be
swing weights. The method is based on comparisons of differences: how does
the swing from 0 to 1 on one preference scale compare to the 0 to 1 swing
on another scale? To make these comparisons, its necessary to take into
account both the difference between the least and most preferred scores,
and how you care about that difference. Thus, the weight on a criterion
reflects both the range of difference of the options, and how much that
willingness to pay
The amount consumers are prepared to pay for a good or service. If a consumerís willingness-to-pay for a good
exceeds its price, the consumer obtains consumer surplus.
work breakdown structure (WBS)
The tasks or activities required to complete a project, organized into a hierarchical
structure. A WBS typically shows who is responsible for each activity and
identifies costs, resources and time required. The WBS is a useful aid for
planning the work scope for a project and assists in cost estimating and
project monitoring and control. WBS capability is typically provided in
project management tools and in some project
portfolio management tools.
The money available and needed to fund the day-to-day
operations of a company.
Stands for Extensible Markup Language, a set of
rules for identifying and structuring data in a way that is readily
interpretable by computers. Although it was originally developed to support
large-scale electronic publishing, XML has become the standard means for
supporting data exchange between computer systems, applications, and
databases. Many project portfolio
management (PPM) tools allow for data importing and exporting via the
XML format, and this capability can facilitate the transfer of data between
the PPM tool and the organization's other computer systems.
Data exchange has long been an issue in information
technology. Software applications typically contain data in incompatible
formats. Consequently, exchanging data between applications is often a
significant challenge. To be exchanged, the data must be represented and
formatted in a way that both systems can understand.
XML facilitates data exchange because it marks the data
in a way that documents its content and structure. Like other markup
languages, XML is applied to text files and uses tags to delineate and
describe the component elements of the file. However, XML is a kind of
metalanguage in that it allows defining custom markup tags based on an
international standard for document markup. For example, if "Base Case" is
the name assigned to a particular version of a project, this might be
expressed using XML tags as:
The particular XML tag structure utilized for a given
application is referred to as a schema. The XML schema makes the data
"self-describing" in that the names of the markup tags indicate the type of
content that they hold. An application that receives data formatted
according to its XML schema can easily map the data into its database.
Although different applications may use different XML
schema, an XML-based language called XSLT (Extensible Stylesheet
Language Transformations) may be used to translate XML documents
between XML schemas. Thus, if an application represents its data in an XML
schema, that fact will make it much easier to conduct the other steps
needed to share the data between applications.
A philosophy for capital budgeting wherein the funding
for every activity or cost element must be specifically justified, not just
increments to previous funding levels. Without approval, the budget
allowance is zero. In other words, zero-based budgeting makes no implicit
commitment to sustain past levels of funding.
zero condition attribute
A condition regarding one or more attributes in
multi-attribute utility analysis that, if present, emply a specific form for the
utility function. Suppose the utility function attributes are
X1, X2p,...,XN . If there is an attribute Xi
for which there is an outcome level xi0 such that, if Xi = xi0, the
decision maker is indifferent among all of the possible permutations of outcomes for the other attribures, then attribute
Xi is said to be a zero condition attribute.
Zero condition attributes often appear in project selection decisions when obtaining
benefits of a project requires some positive outcome for some uncertain event, such as technology success or regulatory approval.
For example, if p is the probability of project success, such that the project will provide some total value V with
probability p and zero otherwise, then it is reasonable to assume that the decision maker is indifferent among all probabilities
p if V = 0. Likewise, it is reasonable to assume that the decision maker is indiferent among all values V if p = 0.
So, both p and V are zero condition attributes. A reasonable form for the utility function in this case would be U(p,V) = P × V