Define TPS and DSS and explain how an organization can use these systems to make decisions and gain competitive advantage
TPS Transaction Processing Systems | DSS Decision Support System |
The basic business system that serves the operational level (analysts) in an organization - Manage elementary business activities eg sales, receipts, cash deposits, payroll, credit decisions and flow of materials - They also replace repetitive tasks - Online transaction processing systems o Eg ATM- information is processed immediately - Provide the foundation for all over information systems - Eg POS- collects information directly from customer - Collects information directly from internet/ customer to store in database- reduces data entry processes/ reducing mistakes A system that records each transaction eg adding a payroll etc | Information to support managers and business professionals during the decision-making process - Assist decision making to more complex problems/ unstructured/ semi-structures problems o Eg Estimating future cash flows from the use of long-lived assets, Eg Judging the adequacy of an argument promoting a reduction in the capital gains tax rate, Eg preparing an operating budget for the next 5 years Comes from TPS- analyses it. Helps making strategic decisions |
Describe the 3 quantitative models typically used by decision support Systems (DSS)
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
2. What-if analysis
- Checks the impact of a change in an assumption on the proposed solution
- Eg what is sales increase or decrease?- effects: staffing, marketing etc
3. Goal seeking analysis
- Finds the inputs necessary to achieve a goal
- Eg what sales do I set to break even?
Describe business processes and their importance to an organization
- Business Process:
o A standard set of activities that accomplish a specific task such as processing a customers order or enrolling a student
o The more efficient this process the higher the business profits (eg creating lower COGS)
- Customer-facing process
o Received directly from customer
o Eg ordering maccas
- Business-facing process
o INVISIBLE to the external customer
o Eg goal setting, day to day planning, rewards and resource allocation
Compare Business process improvement and business process re-engineering
BPI Business process improvement | BPR business process re-engineering |
Requires taking a broad view of both IT and business activity & the relationships between them - Develop the business vision & process objectives - Identify processes to be improved - Understand & measure the existing processes - Know the limitations/potential of technology - Design & build a prototype of the new process Continuous improvement model | - Assumes the process is BROKEN and needs to be improves - EG AAMI- best call centre (because 80% of calls are answered by a person who knows all the answers- no transferring) Process is dead- needs a new one |
Describe the importance of business process modeling (or mapping) and business process models
- To be able to visualize an organisations operation- helps identify problems and new opportunities
- Technology makes processes invisible, BPM makes them visible
- Shows process details in a gradual and controlled manner
IT makes processing possible. Make process visible to make it more efficient
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