1. Define TPS & DSS, and explain how an organization can use these systems to make decisions and gain competitive advantages
TPS is a transaction processing system, which is used at an operational level (analyst). An example is a payroll system. Organisations use transactional information when performing operational tasks, repetitive decisions such as analyzing daily sales reports to determine how much inventory to carry. A business needs to ensure it carries sufficient inventory on a daily basis as excessive or limited stock can cause the business to loose revenue and potential sales. TPS today are moving to an online transaction process capturing the transactions immediately and processed through a system where this valuable information can be stored for business use. Thus businesses can use these systems to make decisions through the available information online which can lead to a competitive advantage of the business through the availability of the system.
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DSS is a decision support system, which serves to support managers and executives during the decision-making process. DSS help managers make decisions, in relation to more complex problems, so called unstructured or semi-structured problems. TPS supplies transaction based data to the DSS. A decision support system is used at a strategic level where executives and managers use the information processed from transactions to provide analytical information. These decisions can include: estimating the sum of future cash flows from the use of assets, or preparing an operating budget for the next 5 years. This can allow a business to gain competitive information and become organised by making these decisions for the future of the organisation using current transactional information. Furthermore, a business is able to create innovative products or services or change existing services to suit future trends or problems by referring to a decision support system.
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2. Describe the three quantitative models typically used by decision support systems.
1. Sensitivity Analysis: is the study of the impact of changes within one or more parts of the DSS model and the effects this has on other parts of the model. Eg how sensitive is our firm to a tax rate, what would be the increase in the cost of staffing?, what would our revenue be?
2. What if Analysis: determines the impact of a change and the effect this might have on solution. Modeling current situation, if changes are made how will it affect the business.
What will happen to sales as the price and quantity of units sold changes?
3. Goal- Seeking analysis: determines the desired output for a goal and finds inputs necessary to achieve the goal. Eg if we change the number of dresses we sell from 45-93 how will this affect profit?
to To determine how much money a person can borrow with an interest rate of 5.5% and a monthly payment of $1,300.
http://en.wikipedia.org/wiki/Decision_support_system
3. Describe a business processes and their importance to an organisation.
A business process is a set of standardized activities that help accomplish a specific task such as processing a customer’s order.[1] Business process is important to an organization as it allows a business to examine faults in an activity and ensures the process is running effectively and efficiently. Developing a reasonable process will allow goal achievement for a business.
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. [2] An example of improvements within business process is innovative technology such as Internet and wireless, allowing a business to further improve and advance communication within an organization. Examining a business process helps a business eliminate duplicate activities and combine related activities to ensure a smooth running of the process.
Business process re-engineering (BPR) redesigns a process or activity that currently isn’t working or needs improving. By improving and reinventing a process it allows a business to improve ideas and focus on new strategies to perform a process, which is up to, the standards of customer needs and wants.
In essence, both BPR and business process improvement are inextricable, they are steps in order to improve and enhance a business process, business process improvement can identify the steps needed to refine a procedure while BPR is applied to redesign a process improving its cause. Furthermore, businesses gain a competitive edge when they minimize costs and streamline their business process using BPR.
5. Describe the importance of business process modelling (or mapping) and business process models.
Business process modeling is the activity of creating a flowchart or process of map of a work process, showing all activities, inputs and tasks in a structured sequence[3].
Business process modeling show process details in a gradual and controlled manner.
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. [4]
The As-Is process models represent the current state of the operation that has been mapped, without any improvements or changes applied
The to be- process model shows the improvements and changes into the process that have been applied.
The importance of a process model is to identify sequential processes within an activity and improve the model continuously, ensuring the efficient and effective use of these goals are accomplished. It also allows a business to identity the time taken to complete an activity, decide whether there are steps missing to complete a process more effectively and efficiently.
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