Week 3: Strategic Decision Making

Define TPS & DSS, Provide Some Examples Of These Systems In Business

TPS and DSS are two types of decision-making information systems commonly used in business. A TPS, or Transaction Processing System, is a basic business system that facilitates organisational activities at the operational level. The most common example of a TPS found in business is payroll systems, order-entry systems, Credit Card Authorisation and EFTPOS Online Bill Payments.

In comparison, a DSS refers to a Decision Support System. These systems model information to support an organisation’s management through their decision-making process. In this way, a DSS system can be used in conjunction with a TPS to predict and achieve a business’s longer term strategy and goals. For this reason, some examples of a DSS include Business Intelligence Systems like Oracle and Executive dashboards that display all relevant information to the organisation’s decision makers.


Describe The Three Quantitative Models Typically Used By Decision Support Systems

Decision Support Systems, commonly use 3 quantitative models to achieve their aim. These three models are known as;

• Sensitivity Analysis
• What-If Analysis
• Goal-Seeking Analysis

Sensitivity Analysis is that which measures the impact to a model when changes are made to one or more parts of it. This is usually accomplished by the operator of the system  repeatedly changing the values of one or more of the variables and observing the resultant effect on the rest of the model.

Similarly, a What-If Analysis also measures the impact of changes in models. Instead of just determining how sensitive the model is to changes however, this model measures the exact effect. For example, a commonly used application of What-If Analysis is to determine a business’s different break-even points depending on varying amounts of sales and/or expenses.

In comparison to these two models that measure the end results of inputs, the Goal-Seeking Analysis model works backwards from the finished product to determine the inputs necessary to achieve such a goal. It does this by setting a target value or goal for a variable, such as desired sales and then repeatedly making changes to others until the desired outcome is achieved.

Describe Business Processes And Their Importance To An Organisation. Outline An Example Of How They Are Used

A Business Process is a set of standardised activities or steps that are used to accomplish a specific task. In essence, they are those systems put in place within a business that transform a collection of inputs into an output such as a good or service. The ultimate success of an organisation is intrinsically linked to the business processes it has in place. In order to satisfy their customers and increase their profits, an organisation’s decision makers must understand and constantly monitor their business processes. In this way, business processes have the power to help an organisation achieve their goals, and in recent times many organisations have turned to automation to stay competitive and increase efficiency.

For example, in supermarkets the ‘checkout’ process is a clear use of business processes within an organisation. In this instance, the process involves all the steps both the customer and store personnel undertake to complete the transaction. As seen in the diagram below, the checkout ‘process’ begins when the customer gets into line and ends when they receive the receipt for their purchases. Retail stores such as K-Mart which have begun integrating automated self-serve check-out systems to this process, are also examples of how organisations can work to improve these processes.

Compare Business Process Improvement And Business Process Re-Engineering

Business Process Improvement is when the decision makers in an organisation attempt to understand and measure the current business process that is in place and make any necessary improvements. In order to do this there is a cycle of 5 basic steps that are followed. These steps are;

·    Documenting the way the system currently works

·    Establishing a way to measure the process

·    Following the Process

·    Measuring the Performance

·    Identifying and Implementing Improvements

In this way, Business Improvement is an effective way to implement gradual and incremental improvement to an existing process, for example, many businesses today have adapted their inventory system from pen/paper records to electronic scanning.

Re-engineering on the other hand, refers to when a process is made to be totally redundant and so, is re-engineered to suit and model new technology. Unlike, Improvement, it assumes that the system currently being used is unnecessary or inefficient and as such should be overhauled and recreated from scratch. In this way the basic steps of Business Process Re-Engineering include;

·    Setting the Project Scope

·    Studying the Competition

·    Creating New Processes

·    Implementing the Solutions

Describe The Importance Of Business Process Modelling (Or Mapping) And Business Process Models 

As the use of technology becomes more and more common in business, the importance of business process modelling and business process models will increase. Unlike in the past, when managers could easily improve their processes purely through observation, in today’s high-tech business environment, they are increasingly becoming invisible.

For this reason, Business Process Modelling or Mapping has become extremely necessary. Involving the creation of a detailed flowchart or map of the inputs, tasks and activities within a structured sequence, Business Process Mapping, creates a graphic description of a process in the form of a Business Process Model.

These models can take the form of either an As-Is Process Model, or To-Be Process Model. Where an As-Is Model represents the process as it is now, the To-Be model illustrates the results of applying possible improvements. In this way, the creation of a Business Process Model can be used in business to both clarify the present situation and express  the vision for improvement.