Week 3, Chapter 2: STRATEGIC DECISION MAKING

Blog Questions

Define TPS & DSS, provide some examples of these systems in business

Transaction Processing Systems (TPS) is the basic business system that serves the operational level in an organisation. The most common TPS example is a payroll system. The accountant (or account department) would simply enter the hours worked and the program would generate the weekly pay in relation to the individual pay rate, allowances, withholdings and a payroll summary is then generated, deducting this monetary amount from the organisations cash flow. Another example would be within a retail environment where the TPS determines stock orders. The system would analyse the amount of inventory on hand within a store (minus sales and transfers, plus returns and new deliveries) before reordering.  Decision Support Systems (DSS) models information to support decision makers during their decision making process and therefore assist in the overall planning of business within an organisation. These systems compile raw data to assist management in making business decisions.

The expanded DSS framework includes; Communications driven DSS, data driven DSS, document driven DSS, knowledge driven DSS and model driven DSS.

Examples include:

·       Communications driven – chat

·       Data driven: invoicing, inventory, and KPI management in retail environments

·       Document driven – template materials to increase workflow and improve consistency across materials in an advertising agency

·       Knowledge driven – Credit analysis in a banking environment

·       Model driven – Applicant eligibility scoring in a insurance environment

Describe the three quantitative models typically used by decision support systems

·       Sensitive analysis: How alterations to one area of the model may or may not impact other areas of the model. This analysis studies the change resulting from an altered variable

·       What-if analysis: The study of the impact of a change to understand the effects of a situation

·       Goal-seeking analysis: Defines the inputs required to achieve a desired outcome

Describe a business process and it's importance to an organisation

Streamlined operations increase customer satisfaction and organisational workflow.

By understanding processes, a business is better able to understand (and therefore serve!) it’s customers. The business processes are standardised activities that complete a certain task, such as processing an order or fulfilling a customer request. For an example, a digital agency may receive a website brief from a client. This is then communicated the agency designers and developers, who then create concepts which, once approved, become the clients website. The process is then completed once the invoice has been paid and the job details archived. Examining business processes allows organisations to identify areas of improvement and implement more time saving procedures that ultimately impact organisational profits.

Compare business process improvement and business process re-engineering using an example

Business Process Improvement (BPI) analyses current processes and makes improvements accordingly.

Business Process Re-Engineering (BPRE), assumes that the current process is inefficient and therefore requires replacing (rather than improving in the way that BPI does). A seemingly irrelevant example would be the method by which a graphic design business transfers documents. While a BPI solution would be to send emails, decreasing organisational costs and allowing designers to continue working a BPRE would be to create a technological driven drop box system by which the client and agency are able to share and transfer files.

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

The importance in being able to visualise an organisation’s operation in the future can often identify opportunities for business growth or enable organisations to avoid problems. This activity maps the work processes and is important when an organisation is attempting to streamline work processes. A business process model displays the sequence of activities either as the business currently operates (As-Is process model) or as it will operate (To-Be Process Model). These processes identify opportunities for improvement in relation to BPI or ensure all aspects of the business have been considered when implementing BPRE.