Weekly Questions (Week 3)
Chapter Two: Strategic Decision Making
1. Define TPS & DSS, and explain how an organisation can use these systems to make decisions and gain competitive advantages
Transactional Process Systems (TPS) are the basic business systems used to manage business activities at an operational level. This may include things such as sales, orders and receipts. A Decision Support System (DSS) can be considered as analytical systems used by managers of a business to make more complex decisions which go beyond a simple transaction. The nature of these problems are usually semi structured or unstructured. E.g. budget preparation, negotiating, project scheduling. An organisation can use these systems to evaluate the business’ performance in regards to its daily operations or operations in a particular time period. Management is able to assess sales, create budgets and forecasts, and review the efficiency and effectiveness of the business. This in turn will allow an organisation to evaluate its position in the marketplace, and also the needs and wants of consumers. Understanding this will provide an organisation with a competitive advantage.
Textbook: Baltzan, Philips, Lynch & Blakey, Business Driven Information Systems (Australian/New Zealand edition) pg58-59
2. Describe the three quantitative models typically used by decision support systems.
Three quantitative models used by decision support systems include:
Sensitivity analysis –when one or more variables are changed in parts of a model and the result it has on other variables. The user repeatedly changes one variable and observes the impact it has on other variables. E.g. how a change in price of a product can affect quantity sold.
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| Goal-Seeking Analysis (Diagram 1) |
What-if analysis – investigates the impact of how an assumption will affect the proposed solution. E.g. natural disaster depletes supplies by 20%
Goal-seeking analysis – investigates what amount of input is necessary for the business to achieve its goal or output. Unlike the sensitivity analysis and what-if analysis, which investigate the impact of how the changes of one or more variables affect other variables, the goal-seeking analysis sets a target value and the system will process all other variables until the target value is met.
Goal-seeking analysis – investigates what amount of input is necessary for the business to achieve its goal or output. Unlike the sensitivity analysis and what-if analysis, which investigate the impact of how the changes of one or more variables affect other variables, the goal-seeking analysis sets a target value and the system will process all other variables until the target value is met.
Textbook: Baltzan, Philips, Lynch & Blakey, Business Driven Information Systems (Australian/New Zealand edition) pg59
3. Describe a business processes and their importance to an organisation.
Business processes are a set of activities which a business undertakes in order to complete a specific task. This involves planning, organising and coordinating the operations needed to transform inputs(raw materials) into outputs(final product). Business processes have great importance in relation to a business’s survival in the continually changing market place and the business's viability/profitability. Due to the continual changes in consumer needs, demands and expectations , business’s must re-evaluate their business processes in an attempt to improve efficiency and effectiveness. The more efficient the business process, the less cost/waste is produced, increasing profits. Similarly, effective business processes increase customer satisfaction.
Textbook: Baltzan, Philips, Lynch & Blakey, Business Driven Information Systems (Australian/New Zealand edition) pg70
4. Compare business process improvement and business process re-engineering.
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| Business Process Improvement (Diagram 2) |
Business process improvement is a systematic approach which attempts to understand and measure the current process, and make performance improvements to increase efficiency. However, business process re-engineering is the assumption that the business process is broken and irrelevant, where a new process is designed and implemented.
For further information, visit:
For further information, visit:
Textbook: Baltzan, Philips, Lynch & Blakey, Business Driven Information Systems (Australian/New Zealand edition) pg71-72
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| Process Re-engineering(Diagram 3) |
5. Describe the importance of business process modeling (or mapping) and business process models.
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| Sample Process Model (Diagram 4) |
Process modeling (or mapping) is the process of creating a detailed flowchart of the current process, including all tasks, and inputs involved. The business remodeling begins with an ‘As-is process model’ showing the present operation process. A ‘To-be process model’ is then created in attempt to simplify and improve the existing model. Business process models have great importance as they allow the business to visualise the process, identify any problems, and opportunities to improve overall efficiency and effectiveness.
For further information, visit:
For further information, visit:
Textbook: Baltzan, Philips, Lynch & Blakey, Business Driven Information Systems (Australian/New Zealand edition) pg78-79
Diagram Reference
Diagram 2 - http://www.executivebrief.com/process-improvement/business-process-improvement-strategic/
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