Sunday, March 27, 2011

Strategic Decision Making - Week 3 Questions

Weekly Questions – Week Three
A general diagram for strategic decision making.

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

TPS (Transaction Processing Systems) are the basic business systems that serve the operational level in an organisation, and DSS (Decision Support Systems) model information to support managers and business professionals during the decision-making process. TPS supplies transaction-based data to the DSS. The DSS then summarises and aggregates the information from the many different TPS systems, which assists the managers in making informed decisions. These decisions can be made through the interpretation of the data such as sales, manufacturing and transportation data in the DSS from order entry, inventory and shipping data in the TPS, which all compile the managerial reports that assist in business improvement decisions and allow competitive advantages.

Describe the three quantitative models typically used by decision support systems.

The three quantitative models often used by DSS are as follows;
Sensitivity analysis studies the impact that changes in one or more parts of the model have on other parts of the model.
The 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.

Describe a business process and their importance to an organisation.

A business process is a standardised set of activities that accomplish a specific task. They transform a set of inputs to a set of outputs for another person or process using people and tools. As organisations pride themselves on providing breakthrough products and services for customers, an organisation must have a complete understanding of all its business processes, which will automatically satisfy customers and spur profits.

This short video further explains business processes.

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. Improving business processes is paramount in order to stay competitive in today’s electronic marketplace, as customers are demanding better products and services. Business process re-engineering (BPR) is the analysis and redesign of workflow within and between enterprises, relying on a different school of thought than business process improvement. BPR starts redeveloping business processes with a clean slate, assuming that the current process is irrelevant so that they are able to disassociate themselves from today’s process and focus solely on a new one.

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

Business process modelling (or mapping) 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. These are both used in determining whether each process is appropriately structured, also displaying input-output relations among process-dependant operations and departments. Business process models must be created to document the step-by-step process sequence of the activities that are required to convert inputs to outputs for the specific process.

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