Week 3: Strategic Decision Making

1) Define TPS and DSS, provide some examples of these systems in business

Transaction Processing Systems (TPS) are the basic business systems that serves the operational level (analysts) in an organization. They were the first system to be automated because these repetitive, consistent and high volume tasks were ideal candidates for ‘computerization’. The most common example of a TPS is an operational accounting system such as payroll system or an order-entry system and Point of Sale systems (POS). In today’s society however, it has moved to online transaction processes such as PayPal.

Decision Support Systems (DSS) assist decision making to make more complex problems simpler. For example, estimating future cash flows from the use of long-lived assets or preparing an operating budget for the next 5 years.

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

The three quantitative models that are typically used by decision support systems include:

-       Sensitivity analysis

Which is the study of the impact that changes in one (or more) parts of the model

-       What-if analysis

Checks the impact of a change in an assumption on the proposed solution

-       Goal-seeking analysis

Finds the inputs necessary to achieve a goal such as a desired level of output

3) Describe a business process and their importance to an organization, outline an example of how they are used

A business process is a standardized set of activities that accomplish a specific task, such as processing a customer’s order. It organizes, coordinates and focuses to produce a valuable product or service for the business.

An organization can only be as effective as their business process, therefore, if they do not have a strict set of procedures and rules to follow, they will not be able to operate effectively as a business. An example of this process being used is when a person wants to travel overseas

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. It requires taking a broad view of both information technology and business activity and the relationships between the two in order to understand and make these improvements. Business process re-engineering however is the analysis and redesign of workflow within and between enterprises. It is about improving the experience for the company and often attempts to set new standards for the industry.

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

The importance of business process modeling is the activity of creating a detailed flowchart or process map of a work process, showing its 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. By making a detailed flowchart, a business can then show their process details in a gradual and controlled manner, encourage consciousness and accuracy in describing the process model, focus attention on the process model interfaces and provide a powerful process analysis and consistent design vocabulary.