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Business Functions terms
Analytics inside the company: BI, finance, sales, customers, people, supply chain, operations, risk, legal and strategy.
Business intelligence (BI) The practice of turning company data into dashboards, reports and metrics that guide business decisions. Dashboard A visual display of the metrics a team needs to monitor, usually updated on a schedule or in real time. KPI (key performance indicator) A measurable value tracked over time to show whether a team or process is on track toward a goal. OKR (objectives and key results) A goal-setting framework that pairs one qualitative objective with a small set of measurable key results. Self-service BI BI tooling that lets business users build their own reports and explore data without waiting on IT or analytics teams. Annual recurring revenue (ARR) The value of a subscription business's recurring revenue, normalized to a one-year run rate. Bookings, billings, and revenue Three distinct SaaS figures often confused: signed contract value, amount invoiced, and amount recognized as earned. Break-even analysis Calculating the sales volume or revenue at which total costs are exactly covered, with neither profit nor loss. Budget vs. actual A report comparing what was budgeted for a period against what actually happened, line by line. Burn rate How fast a company spends cash, usually measured monthly, and used to estimate how long its remaining cash will last. Cash conversion cycle (CCC) The number of days it takes a company to turn spending on inventory and operations back into collected cash. Contribution margin Revenue minus all variable costs, showing how much each sale contributes toward covering fixed costs and profit. Cost allocation Assigning shared or indirect costs, such as overhead, to the departments, products, or customers that use them. Deferred revenue A balance-sheet liability for cash received from a customer before the related goods or services have been delivered. Driver-based planning Building a financial plan from operational drivers, such as units sold or headcount, rather than top-down growth assumptions. EBITDA (earnings before interest, taxes, depreciation, and amortization) A profitability measure that adds back interest, taxes, depreciation, and amortization to earnings. Financial close The recurring process of finalizing a company's accounting records and producing financial statements for a period. FP&A (financial planning and analysis) The finance function responsible for budgeting, forecasting and analyzing company performance against plan. Gross margin The share of revenue left after subtracting the direct cost of producing or delivering what was sold. Headcount planning Forecasting how many people a company will hire, lose, and pay for across a plan period, by team and role. Revenue per employee A productivity ratio, total revenue divided by headcount, used to benchmark organizational efficiency. Revenue recognition The accounting rules for when revenue counts as earned and can be recorded, which is often not when cash is received. Rolling forecast A financial forecast that is continuously extended, adding a new future period as each period closes. Rule of 40 A SaaS benchmark stating that growth rate plus profit margin should add up to 40% or more. Scenario modeling Building several named versions of a financial plan, such as best, base, and worst case, under different assumptions. Unit economics The direct revenue and costs attributable to a single unit, such as one customer or one transaction. Variance analysis Comparing actual financial results to budget or forecast and breaking the gap into the specific causes behind it. Working capital The difference between a company's current assets and current liabilities, a measure of short-term operating liquidity. Zero-based budgeting (ZBB) Building each budget cycle from a zero base, requiring every expense to be justified again rather than carried forward. Average deal size The mean revenue value of closed-won deals over a period, found by dividing total value by deal count. Average revenue per daily active user (ARPDAU) The average revenue earned per daily active user, a monetization metric common in mobile games and free-to-play apps. Average revenue per user (ARPU) The average revenue generated per subscriber or user over a defined period, typically a month or year. CAC payback period How many months it takes for the gross margin a customer generates to repay the cost of acquiring them. Conversation intelligence Software that records, transcribes and analyzes sales or support calls to surface talk patterns, objections and coaching cues. Expansion revenue Additional recurring revenue from existing customers, through upsells, cross-sells, or usage growth. Gross revenue retention (GRR) The percentage of recurring revenue kept from an existing customer base after churn and downgrades, excluding any expansion. LTV:CAC ratio (customer lifetime value to customer acquisition cost ratio) The ratio of what a customer is worth over their lifetime to what it costs to acquire them. Monthly recurring revenue (MRR) The value of a subscription business's recurring revenue, normalized to a one-month run rate. Net revenue retention (NRR) The percentage of recurring revenue kept from an existing customer base, including expansion and after subtracting churn. Pipeline coverage The ratio of open sales pipeline value to a revenue target, used to judge whether enough deals exist to hit it. Quota attainment The percentage of an assigned sales quota that a rep, team or organization actually achieved in a period. Revenue management The discipline of selling the right unit of fixed, perishable capacity to the right customer at the right price and time. Revenue operations (RevOps) The function that aligns sales, marketing and customer success operations, data and systems around one revenue process. Sales cycle length The average time from an opportunity being created to a deal closing, either won or lost. Sales forecasting Predicting future sales volume or revenue from pipeline data, historical trends or statistical models. Sales velocity A single measure of how fast a sales team generates revenue, combining pipeline volume, deal size, win rate and cycle time. Same-store sales (comparable-store sales, comps) Revenue growth measured only at locations that were open throughout both the current and prior comparison periods. Territory planning Dividing a market into sales territories, by geography, account size or industry, to balance opportunity and workload. Win rate The share of sales opportunities that close as won, out of all opportunities that reached a final decision. Attrition risk A predictive score estimating how likely an individual employee or customer is to leave in a given period. Average handle time (AHT) The average duration of a customer service interaction, including talk time, hold time and after-call work. Churn rate The share of customers or revenue a business loses over a given period. Cohort analysis Grouping customers by a shared starting point, such as signup month, and tracking how their behavior diverges over time. Customer 360 A single, unified profile of a customer that consolidates data from every touchpoint and system into one view. Customer effort score (CES) A survey metric measuring how much effort a customer had to spend to resolve an issue or complete a task. Customer health score A composite score combining usage, engagement, support and billing signals to estimate a customer's renewal or churn risk. Customer journey analytics Analyzing a customer's touchpoints across channels and time to understand and improve the full path to purchase and beyond. Customer journey mapping The practice of visualizing every touchpoint a customer has with a brand, from first awareness through purchase and beyond. Customer lifetime value (CLV) The total net profit a business expects to earn from a customer over the entire relationship. Customer satisfaction score (CSAT) A survey metric that asks customers to rate how satisfied they were with a specific interaction, product or purchase. Customer segmentation Dividing a customer base into groups that share meaningful traits so each can be targeted or served differently. First contact resolution (FCR) The share of customer support issues resolved in a single interaction, with no follow-up or escalation needed. Net Promoter Score (NPS) A single-question survey score that gauges customer loyalty by asking how likely someone is to recommend a company. Network churn prediction Using network performance and usage data to predict which telecom subscribers are likely to cancel their service. Next-best-action (NBA) A system or process that recommends the single most valuable action to take for a specific customer at a specific moment. RFM analysis A segmentation technique that scores customers on how recently, how often and how much they buy. Share of wallet The percentage of a customer's total spending in a category that goes to one company rather than its competitors. Speech analytics Software that transcribes and analyzes spoken audio, such as call center recordings, to extract sentiment, keywords, and compliance signals. Voice of the customer (VoC) The structured practice of capturing and analyzing customer feedback across surveys, support, reviews and social channels. Absenteeism rate The share of scheduled work time lost to unplanned employee absence over a period. Employee engagement The degree to which employees feel committed to, motivated by and emotionally invested in their work and organization. Employee net promoter score (eNPS) A single-question survey metric, adapted from NPS, measuring how likely employees are to recommend their employer. Employee turnover rate The share of employees who leave an organization, voluntarily or involuntarily, over a given period. Organizational network analysis (ONA) Mapping and analyzing the informal networks of communication and collaboration inside an organization. Pay equity analysis A statistical review of compensation data to detect unexplained pay gaps by gender, race or other protected characteristics. People analytics Applying data analysis to workforce data such as hiring, performance and attrition to guide HR decisions. Quality of hire A composite measure of how well new hires perform and stay, used to judge recruiting effectiveness beyond speed and cost. Span of control The number of direct reports a manager oversees, used to gauge organizational structure and management capacity. Time to hire The number of days between a candidate entering the pipeline and accepting a job offer. Workforce planning Forecasting an organization's future staffing needs and aligning hiring, skills and budget to meet them. Bullwhip effect The tendency for small changes in end-customer demand to be amplified into far larger order swings further up the supply chain. Days of supply How many days current inventory would last at the recent or expected rate of usage before running out. Demand forecasting Estimating future customer demand for a product so inventory, production and staffing can be planned ahead. Fill rate The share of customer demand fulfilled immediately from available stock, without delay, backorder, or substitution. Inventory turnover How many times a company sells and replaces its inventory over a given period, usually a year. Lead time The total time between triggering an order or task and having it completed and available for use. On-time in full (OTIF) The share of customer orders delivered both on the promised date and complete, with nothing missing or short. On-time performance (OTP) The share of trips, flights, deliveries, or services completed within a defined acceptable window of their scheduled time. Procurement analytics (government) Analyzing public purchasing data to control spend, detect irregularities, and evaluate vendor and contract performance. Route optimization Computing the most efficient sequence of stops or paths for vehicles, usually to minimize distance, time, or cost. Safety stock Extra inventory held beyond expected demand to absorb variability in demand or supply lead time without running out. Sales and operations planning (S&OP) A recurring cross-functional process that aligns sales forecasts, production plans, and financial targets into one plan. Sell-through rate The share of stocked inventory that actually sells within a given period, usually expressed as a percentage. Spend analysis Analyzing an organization's purchasing data to understand what is bought, from whom, at what price, and where to save. Supply chain visibility The ability to track goods, orders, and inventory across every stage of a supply chain, often close to real time. Bottleneck analysis Identifying which step in a process limits the speed of the whole system, so improvement effort targets the right place. Cycle time The total elapsed time to complete one unit of work, from when active processing starts to when it finishes. Lean analytics Applying lean management's focus on flow and waste reduction to choosing and acting on the one metric that matters most right now. Process mining Reconstructing how a business process actually runs from system event logs rather than from how it is documented. Six Sigma A structured methodology for reducing process defects and variation using statistical measurement and the DMAIC cycle. Statistical process control (SPC) Using control charts and statistical limits to tell normal process variation apart from a genuine problem in real time. Throughput The rate at which a process completes units of work over a period of time, such as orders shipped per hour. Anti-money laundering (AML) The laws, controls, and analytics financial institutions use to detect and prevent the disguising of illegal funds. Claims analytics Applying analytics to insurance claims data to speed processing, control cost, and detect fraud. Credit scoring Ranking a borrower's creditworthiness with a numeric score derived from their credit history and other data. Fraud detection Identifying transactions, claims, or behavior that are likely fraudulent, using rules, statistics, or machine learning. Know your customer (KYC) Verifying a customer's identity and assessing their risk before and throughout a business relationship. Model risk management (MRM) The governance practice of validating, monitoring, and controlling the risk that a model is wrong or misused. Pharmacovigilance Detecting, assessing, and monitoring adverse effects of a drug throughout its use, especially after approval. Risk scoring Assigning a numeric score to a customer, transaction, or entity that estimates the likelihood of a specific negative outcome. Transaction monitoring Ongoing, largely automated screening of financial transactions to flag activity that may indicate fraud or laundering. Contract analytics Using software to extract, review, and analyze clauses, terms, and obligations across many contracts at scale. E-discovery (electronic discovery) Identifying, collecting, and reviewing electronically stored information as evidence in litigation or investigations. Litigation analytics Using data on past case outcomes, judges, and courts to inform legal strategy, such as predicting how a case might proceed. Brand health A composite view of how a brand is perceived and performing, combining awareness, sentiment, consideration, and loyalty metrics. Competitive intelligence The systematic gathering and analysis of public information about competitors to inform strategy and decisions. Market share The percentage of total sales in a market or category captured by a specific company, product, or brand. Scenario planning A planning method that builds and stress-tests a small number of distinct, plausible futures rather than a single forecast. Social listening Continuously tracking social platforms and public online conversations for mentions of a brand, topic, or competitor, then analyzing themes. SWOT analysis (strengths, weaknesses, opportunities, threats) A framework for assessing a company's internal strengths and weaknesses alongside external opportunities and threats. Total addressable market (TAM) The total revenue opportunity for a product or service if it captured 100% of its potential market.