Week Three Questions

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

Transactional Processing system is the basic business system that serves the operational level in an organisation. TPS enable organisations to contain all their information within a single business process which allows support for the daily operational tasks such as sales, receipts, cash deposits, payroll, credit decisions and flow of materials. These transactions can be managed though batch processing which enables a business to collect data from transactions as they occur, placing them in groups or batches. They are then prepared and processed periodically, often without human intervention, thus minimising the risk or error. The appropriate decisions are then made based on this ordered and accurate information.

Transaction related process were the first to be automated because these repetitive, consistent, high volume tasks were ideal candidates for ‘computerisation’. As TPS are the foundation for all other information systems, they are out-reaching and convey impressions to the customers about the quality of business and further, can be built on a client/ server architecture which allows for a faster transaction process, giving competitive advantage.

DSS or Decision Support Systems help managers make decisions, in particular in relation to complex situations, also known as unstructured or semi structured problems such as estimating the sum of future cash flows from the use of long-lived assets, judging the adequacy of an argument promoting a reduction in the capital gains tax rate and preparing an operating budget for the next 5 years. These functions allow a business to predetermine the course of the business.

2. Describe the three quantitative models typically used by decision support systems.
There are three quantitative models used by DSSs to determine business possibilities. These include:

(1) Sensitivity analysis - the study of the impact that changes in one (or more) parts of the model have on other parts of the model. Users change the value of one variable repeatedly and observe the resulting change

(2) What-if analysis - checks the impact of a change in an assumption on the proposed solution.

(3) Goal-seeking analysis - finds the inputs necessary to achieve a goal such as a desired level of output. Instead of observing how changes in a variable affect other variables as in what if analysis, goal seeking analysis sets a target value fir a variable and then repeatedly changes other variables until the target value is achieved.

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

Business process is a standardised set of activities that accomplish a specific task, such as processing a customs order. Business Process transform a set of inputs into a set of outputs (goods or services) for another person or process by using people as tools. Examining business processes helps an organization to anticipate bottlenecks and eliminate duplicate activities, combine related activities and indentify smooth-running processes. Organisations are only effective as their business process and developing logical business process can help an organisation achieve its goals

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

Many organisations begin business process improvement with a continuous improvement model. A continuous process improvement model attempts to understand and measure the current process, and make performance improvements accordingly whereas Business Process re-engineering relies on a different school of thought than business process improvement. In the extreme BPR assumes the current process is irrelevant, does not work, or is broken and must be overhauled from scratch. Such a clean slate enables for a total process remodel while further enabling the process designers to distance themselves from today’s process and focus on a new process. Business process reengineering (BPR) is the analysis and redesign of workflow within and between enterprises. Business process reengineering (BPR) is the analysis and redesign of workflow within and between enterprises.

5. Describe the importance of business process modelling (or mapping) and business process models.
Business process modelling is the activity of generating a detailed flowchart or process map of a work process, showing its inputs, tasks and activities in a structured sequence where as a business process model is a visual representation of a process, showing the succession of process tasks, which is developed for a specific purpose and from a selected viewpoint. The importance of a business process model is to expose the process detail gradually and in a controlled manner while further promoting conciseness and accuracy in describing the process model. It also directs consideration on the process model interfaces while providing a powerful process analysis and consistent design vocabulary. Today’s technology makes the processes within a business invisible, so BPM makes the processes visible