Week three - Strategic Decision Making

1. TPS or Transaction Processing Systems are systems put in place to manage the daily, fundamental processes of a business.  Some examples may include, but are not limited to: Sales of goods and services, Cash deposits, receipts, payroll.

DSS or Decision Support Systems are the systems within a business which solve more complex problems otherwise known as un structured or semi structured problems such as, preparing an operating budget for the next 5 years or estimating future cash flows from the use of long lived assets.

TPS and DSS both create competitive advantages for a business. The use of computerised systems helps to dramatically reduce human resource costs and allows relevant information to be documented and displayed for both the externally e.g. shareholders – allowing them to see point of sale statements to gain a greater understanding of how well the business is performing financially and internally e.g. Financial department – to help them develop accurate/appropriate financial budgets for the many different sectors within the business.

2. Three quantitative models typically used by Decision Support Systems include;

- Sensitivity analysis: Shows how a change in one part of a graph will impact other parts of a graph

- What if analysis: Checks the impact on a change in an assumption on the solution

- Goal seeking analysis: Finds the input necessary to create outcome.

3. Business processes are the standard set of business activities, which accomplish a specific service or task e.g. processing a customers order. Business processes is important to an organisation as it helps to increase business productivity.

4. Business process improvement is the understanding and measurement of current business processes resulting in the identification of any changes that can be made to ensure the improvement of outputs.

Business process re-engineering is the complete re-design of an organisations business processes, setting new standards for the business.

5. Business Process modeling (or mapping) is the process of adding all business processes into a flow chart to enable complete visualisation, which can help identify problems and/or new opportunities. The use of technology results in many of these processes becoming invisible, so BMI makes it visible again.

A business process model is the standard set of business activities, graphically portrayed in sequential order.

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