Strategic Decision making
1. Define TPS and DSS, and explain how an organisation can use these systems to make decisions and gain competitive advantages.
• A Transactional Processing System(TPS) is system which supports the transactions carried out by the organisation allowing customer needs to be met. The system collects stores and modifies the data from the transactions to serve the operation of the business. Some Transaction Processing Systems include reservation systems, operational accounting systems such as payroll and EFTPOS.
• A decision Support System(DSS) provide support for the business professionals undertaking decision making by providing to information and analysis tools. With the aid of models the information is easily accessible as a guide for the decision making process.
• Each of the systems Transactional Processing Systems and Decision Support Systems allow organisation to make informed decisions. Business Professionals are able to with Decision Support Systems evaluate the effect of changes within the information modelled, asses the impact of assumptions on the model or understand the input required to achieve specific goals in order to make positive decisions. The information collected from Transaction Processing Systems can be incorporated in making strategic decisions to gain a competitive advantage with the input of the data in a DSS. These systems allow decisions to be made with a wealth of information therefore organisations are able to gain a competitive advantage.
2. Describe the three quantitative models typically used by decision support systems.
• The sensitivity Analysis observes the effect of adapting one or more areas of the information modelled on the other areas within the model. The organisation can incorporate this model to assess the effect of small changes within the mode and how these will affect the model as a whole. This allows an organisation to weigh up decisions in terms of providing the best outcome.
• The what-if analysis is used to assess the impact on a solution if changes are made to assumptions in the model. This model can observe the outcomes to what is suspected to occur and allows the organisation to interpret possible outcomes on the proposed solution and make a decision which will provide the best solution.
• The Goal-seeking Analysis model functions to ensure the organisation can fulfil a goal such as increase in annual revenue. Organisations can interpret what is the required input to achieve a certain goal allowing specific decisions to be made to ensure this happens.
3. Describe a business processes and their importance to an organisation.
• A Business Process is a set of ordered activities or tasks to produce a particular service or product. These Business Processes fulfil a customer’s needs and are important to the overall success of the business. There is a direct relationship between the performance of the business processes and the overall performance of the business and therefore they are vital to an organisation.
4. Compare business process improvement and business process re-engineering.
• Business Process Improvement attempts to evaluate the business process in an attempt to make performance improvements in order to offer better products and services. The improvement is done through a continuous improvement model which involves documenting the current process, establishing a measurement of the process, following the process, measuring the performance in order to identify an improvement. In comparison to BPR, Business Process Re-engineering attempts to re-create the workflow rather than improve what already exists. Business Process engineering assumes the initial system is damaged or no longer relevant allowing designers to initiate a new process moving towards the future.
5. Describe the importance of business process modelling (or mapping) and business process models.
• Business Process Modelling creates a visual map of the business process identifying all aspects in a sequential and ordered diagram which is easy to understand. A model describes the specific activities in a concise and accurate manner. Through modelling the current model and possible solutions the most efficient and effective operation can be devised. This allows an organisation to achieve the greatest profit through providing an efficient process in offering products or services.
Image:Figure 2.20 Customer service As-Is process model, Business Driven Information systems
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