Week 3 Questions - Strategic Decision Making

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

• TPS – Transaction Processing Systems (TPS) contain all of the information of a business, with its primary purpose to support the daily operational tasks. They record every transaction within the organisation. Examples of TPS include online reservations for hotels and airlines or using an ATM to withdraw cash. Analytical information incorporates all of the information of an organisation, which is utilised by managers when decisions need to be made.
• DCS - Decision Support Systems (DCS) model information to support managers and business professionals during the decision-making process. A DCS gathers the data from TPS and builds a model of this data to make decisions.

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

Sensitivity Analysis – Sensitive Analysis studies the impact of change on the organisation. It studies the change on a model if parts of another model are changed and how this affects the results of that model as well as other supporting models.

What-If Analysis – The what-if analysis checks the impact of a change in an assumption on the proposed solutions. This means that they look at all the possible affects a change may have on an organisation.

Goal-seeking Analysis – Goal-seeking analysis determines what is needed in order for an organisation to achieve the goals, ie. The resources needed. It involves variables being changed to determine when the goal is reached.

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

A business process is a set of standardised activities or steps that are followed to complete a specific task. An example is processing a customer order. They transform inputs into outputs and are needed for a business to be effective as without a business process, the goals of an organisation can not be achieved. Business-facing processes are invisible to external customers but are essential to the effective management of a business as it includes goal setting, day-to-day planning, performance feedback, rewards and resource allocation.

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

• Business process improvements attempts to understand the processes an organisation has in place and make changes to these processes to improve the systems. The steps to business process improvement include; documenting what they currently do, follow the process, measure the performance and ideas the areas where improvements can be made.
• Business process re-engineering assumes that the business process used within an organisation is not relevant and a new process is implemented from scratch. A new business system is developed first, before a business process is built. The steps in business process re-engineering are; set project scope, study competition, create new processes and implement the solution. A business process re-engineering does not just make a process better, faster and cheaper, but it can redefine the best practices for the entire industry.
  

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

Business process modelling is a detailed flowchart of the work processes showing inputs, tasks and activities in a structured sequence. It is a visual representation of the processes of a business. The purpose of a business process model is that is allows organisations to visually see the effectiveness of their processes within the organisation and highlight where changes need to be made and determine whether or not they are in line with the goals of the organisation.