Week 3 Questions

Strategic Decisions Making

1. Define TPS & DSS, and explain how an organisation can use these systems to make decisions and gain competitive advantages

A transaction processing system (TPS) is the basic business system that serves the operational level in an organisation, with the most common example of a TPS being an operational accounting system such as a payroll system. A decision support-system (DSS) models information to support manager and business professionals during the decision making process. A business can use these systems to make decisions and gain competitive advantages as TPS and DSS allow a business to improve their operations, make better and reliable decisions and thus improve the overall function of an organisation.

 2. Describe the three quantitative models typically used by decision support systems.

Three models commonly used by DSS include sensitivity analysis, what-if analysis and goal-seeking analysis. Sensitivity analysis is the study of the impact that changes in one or more parts of the model have on other parts of the model. What-if analysis checks the impact of change in an assumption on the proposed solution. Users repeat this analysis until they understand all the effects of various situations. Lastly, goal-seeking analysis finds the inputs necessary to achieve a goal such as a desired level of output. It sets a target value for a variable and then repeatedly changes other variables until the target value is achieved.

3. Describe business processes and their importance to an organisation.

Businesses gain a competitive advantage when they minimise costs and streamline their business processes. The best way a company can satisfy customers and generate profits is by completely understanding all of its business processes. The process steps are the activities the customer and store personnel do to complete s transaction. A business process is a standardised set of activities that accomplish a specific task, such as processing a customer's order. Business processes transform a set of inputs into a set of outputs (goods or services) for another person or process by using people and tools.

Business processes are of immense importance to an organisations as they help a business to anticipate bottle necks, eliminate duplicate activities, combine related activities and identify smooth-running processes. Developing logical business processes can help an organisation achieve it's goals.

4. Compare business process improvement and business process re-engineering.

Business process improvement attempts to understand and measure the current process and make performance improvements accordingly. Organisations must improve their business processes because customers are demanding better products and services and if customers do not receive what they want from one supplier, they will have many other choices as to where they purchase their products. However, Business Process re-engineering (BPR) is the analysis and redesign of workflow within and between enterprises. BPR relies on a different school of thought than business process improvement. BPR may assume that the current process is irrelevant, does not work, or is broken and must be overhauled from scratch.

5. Describe the importance of business process modelling (or mapping) and business process models.

Business process modelling (or mapping) is the activity of cresting a detailed flowchart or map or work process, showing inputs, tasks and activities in a structured sequence. A business process model is a graphic description of a process, showing the sequence of process tasks, which is developed for a specific purpose and from a selected viewpoint.

Business process modelling usually begins with an As-Is process model which represents the current state of the operation that has been mapped. The next step is to build a To-Be process model that displays how the process problem will be solved or implemented.

A business process model is important as it can expose process detail gradually and in a controlled manner, encourage conciseness and accuracy in describing the process model, focus attention on the process model interfaces and provide a powerful process analysis and consistent design vocabulary.