Strategic Decision Making

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

TPS: Transaction Processing Systems - TPS is the basic business system that serves the operational level of an organisation, for example an operation accounting system such as payroll.

DSS: Decision Support Systems - DSS looks at the effect decisions made have on other functional areas of a business.

When these two systems are implemented effectively, an organisation benefits holistically. TPS and DSS support executive information systems (EIS). When the three of these systems work together, the business becomes streamlined, with all functional levels and organisational levels working in harmony with each other and the overall goals of the organisation.

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

• Sensitivity Analysis - analyses how changes in one area of a business model will impact upon other areas of the business model.


• What-If Analysis - checks the impact of a change in an assumption on the proposed solution.


• Goal Seeking Analysis - finds the inputs required for an organisation to achieve its goals.

Question Three - Describe business processes and their importance to an organisation.

Business processes are a set of standardised tasks that accomplish a set purpose. These processes are important to an organisation as they form the backbone of the operations of a business. The more effective and efficient business processes are, the more efficiently and effectively run the business will be.

Question Four - Compare business process improvement and business process re-engineering.

Business process improvement is a process where analysts attempt to understand and measure the current process' success and make performance improvements accordingly. This process takes an existing system and, after evaluation, will suggest ways to improve the process for optimal productivity.

On the other hand, business process re-engineering is a process where analysts assume the current process is irrelevant, and instead of making improvements, will redesign the work flow within and between enterprises through forming a new business process.

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

Business process modelling is the activity of creating a detailed flowchart or process map of a work process; it is making visible which is usually invisible. It shows the inputs, tasks and activities of a particular process in a structured sequence. A business process model is a graphic description of a process, developed for a specific purpose and from a selected viewpoint.

Business process modelling is important because:

• It exposes process detail gradually and in a controlled manner


• It encourages conciseness and accuracy in the process model


• It focuses attention on the process model interfaces


• It provides a powerful process analysis and consistent design vocabulary

There are two types of business process modelling; As-Is and To-Be process modelling. As-Is process models show the current state of operation within a business, and To-Be process modelling show the results of apply change improvement opportunities to the current as-is model.

The figure to the left displays the difference between As-Is and To-Be process modelling.