Glossary
ARIS (Architecture of Integrated Information systems)
Scientifically based method used to describe business processes and information systems developed by Dr. August-Wilhelm Scheer. The ARIS software product family developed on this basis by IDS Scheer serves to analyze, model, implement and measure processes. For several years, independent market analysts such as Gartner, Forrester, AMR Research and the Fraunhofer Institute (IAO) have repeatedly rated ARIS as the leading solution on this market.
ARIS Platform (for Process Excellence)
The umbrella brand of all IDS Scheer products. ARIS Platform products support every stage of the holistic process lifecycle – from strategy and design through implementation to controlling of business processes. The aim of this is to enable flexible and efficient design and management of processes in line with changing corporate requirements.
ARIS Process Performance Manager (ARIS PPM)
A software solution created by IDS Scheer for the automated measurement of performance data from company-wide processes. Based on benchmarking and using key process data objectively measured in ongoing operations, the solution provides information to discover weaknesses and potential areas for improvement in a company’s business processes.
ARIS SmartPath
A one-stop solution from IDS Scheer for fast, process-oriented application specially geared towards the needs of small and medium-sized enterprises. ARIS SmartPath provides preconfigured solution packages comprising the standard business solution SAP All-in-One, ARIS products with industry based process reference models and consulting.
ARIS Value Engineering (AVE)
Consulting method from IDS Scheer based on ARIS for the development of consistent business process management. AVE supports the introduction of a process-oriented organization and the optimization of entire value chains, the implementation of process controlling and the ongoing process-oriented development of IT systems.
Business Intelligence (BI)
Methods and software solutions for the systematic analysis (gathering, evaluation, presentation) of data on a company and its market and competitive environment in electronic form. BI systems identify and define the relevant management information, provide the necessary data and help to adjust (optimize) the relevant strategic and operating processes. The aim is to improve decision management in the company.
Business Performance (Management)
Performance, i.e. the growth and profitability of a company. Business performance management includes methods, tools and processes to improve company performance. The foundation of this is systematic monitoring and analysis of operating processes and data by business process management that provides a solid decision-making basis to allow early and efficient management intervention. Business performance management is seen as a progression of business intelligence (BI) and covers not only past financial data and processes but also includes data from current operations and future processes such as planning and forecasts. Its areas of application are growing constantly, particularly given the rising requirements placed on companies in terms of compliance, audit transparency and control.
Business Process Management (BPM)
A complete process cycle comprising strategy, design, modelling and implementation into IT as well as the measurement and management of business processes. BPM controls the processes of a business application from a management standpoint and handles these processes and the services being performed separately. BPM is a key component in the implementation of a service-oriented architecture (see SOA).
CAGR (Compound Annual Growth Rate)
Represents the average annual growth of a financial indicator, usually sales.
Cash Flow
Key financial figure of the cash flow statement that is used to assess the financial and earnings power of a company, calculated as the difference between income (cash earnings, inflow of funds) and expenses (cash expenses, outflow of funds). Cash flow is defined as the surplus or deficit of cash and cash equivalents for a period from business activities and allows a reliable assessment of internal financing potential.
Compliance Management
Compliance with external laws and guidelines for corporate structures and processes. The term compliance describes conduct by a company in compliance with the legal and regulatory provisions of, for example, Basel II, the Sarbanes-Oxley Act, Solvency II, FDA, Corporate Governance, etc. To be in compliance with these regulations, the companies have to identify the processes concerned, analyze the risks, establish the necessary controls for processes and monitor their correct performance.
Corporate Governance
Generally recognized and increasingly internationally observed standards of conduct for the responsible management and control of a company targeted at adding value transparently and sustainably.
Corporate Social Responsibility (CSR)
Voluntary contribution by business to sustainable development going beyond legal requirements (compliance). Responsible action by a company in its business activities (market), through ecological aspects (the environment) to relations with employees (workplace), the social environment and the exchange with relevant interest groups (stakeholders).
Deferred Taxes (according to IFRS)
Calculation of notional taxes on (temporary) differences between the tax accounts and the financial accounts with the aim of reporting the tax result in line with accounting profit.
Derivatives
Financial instruments whose prices are dependent on fluctuations in or expectations of other investments. Derivatives are constructed so that they strongly track the fluctuations in the prices of these investment vehicles. They can therefore be used both to hedge against losses in value and to speculate on price gains in underlying securities. The main derivatives are certificates, options, futures and swaps.
Dividend Yield
A ratio used to assess the profitability of a stock investment that expresses the dividend income as a percentage of the stock’s price.
EBIT
Earnings before interest and taxes.
EBITA
Earnings before interest, taxes and amortization.
Enterprise Architecture (EA)
Method for standardization and governance of IT with the aim of making the right adjustments for changes in the IT landscape to provide the best possible flexible and long-term support for corporate strategy.
ERP (Enterprise Resource Planning) System/Business Software
Complex business application software for planning and controlling company resources (capital, equipment and staff) and to support efficient use of resources for operating procedures. The ERP software solutions from the world’s leading IT companies are now seen as the standard business software.
Fair Value
According to IFRS and U.S. GAAP, fair value is the amount at which an asset can be exchanged or an obligation can be settled between knowledgeable, willing and independent business partners. It is therefore the hypothetical market price (fair value) under idealized conditions.
Free Float
The share of stock held in free float.
IFRS (International Financial Reporting Standards)
Capital market-oriented accounting regulations that all companies listed on the Frankfurt Stock Exchange and headquartered in Germany are obliged to use for their consolidated financial statements since 2005. These standards and definitions establish rules for consistent external financial reporting.
Impairment Test
Value test taking the form of a company evaluation; regularly used to assess capitalized goodwill.
IT (Information Technology)
General term for information and data processing and the software and hardware required. It describes devices and procedures for processing information and data (data systems technology).
Market Capitalization
Market value of a company’s equity that is calculated by multiplying stock price by the number of issued shares of a publicly traded corporation.
PER (Price/Earnings Ratio)
A ratio that is used to analyze the earnings power per share. The price of the shares is compared to the actual or expected earnings per share for a comparative period. If the PER is relatively low the shares are considered to be favorably valued, shares with a relatively high PER are regarded as less favourable or expensive.
Sarbanes-Oxley Act
US capital market law from 2002 passed as a reaction to several financial scandals. The act strengthens corporate governance and is thereby intended to win back the trust of investors in the capital market. The law obliges corporate management to perform its duty regarding the completeness and correctness of the figures in regular reports. The new, expanded regulations apply to all companies listed on a US stock exchange.
SCM (Supply Chain Management)
Planning, optimization and management of the flow of goods and data through the entire value chain from basic suppliers through production and logistics stages to the end consumer. The aim of SCM is to increase efficiency along the entire supply chain.
Shareholders’ Equity
Proportion of equity to total assets, expressed as a percentage.
SME (Small and Medium Enterprises)
At IDS Scheer, companies with up to 100 employees are considered to be small enterprises and companies with between 100 and 999 employees are considered to be medium enterprises.
SOA (Service-oriented Architecture)
A concept for a new software infrastructure in which software modules are implemented as reusable Web services and can be exchanged with other services on a network or bundled to form more complex services in line with business processes. SOA follows defined business processes and therefore requires business process management.
Volatility
Degree of fluctuation in prices, e.g. of stocks or currencies.
Additional information
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