A Transaction Processing System (TPS) is a basic business system used to enter and store a businesses data. TPS systems are used to transform data into readable reports and are commonly used by employees in a firm’s financial department, for example, payroll systems such as MYOB may be used to store and retrieve financial information. TPS systems implement the use of batch processing, whereby, ‘batches’ or packets of data from a specified period are compiled and illustrated to the user. Transaction Processing Systems are commonly implemented by businesses who desire to gain a competitive edge or advantage. For example, a business may use its TPS to identify trends in consumer spending. The business may then compare these simply formulated trends with their competitors to identify what facets of their business they can improve to gain a competitive edge. TPS systems may also be implemented by businesses who are selling their products online. A business may analyse the processes involved with processing an order online and make changes accordingly if they believe there is an improved way of performing a certain task. Such improvements may allow a business to differentiate the way of purchasing products online, allowing them to ultimately gain a competitive advantage. An example of an online transaction processing system is below. The image displays a point of sale TPS which is a process being commonly adopted by online businesses. [1]
A decision support system (DSS) allows management to make decsisions based on gathered data and information from the TPS. Decision support systems are used to formulate or model a businesses information to allow managers to gain an easily comprehensible overview of the firms current position when making important decisions. Decision support systems are typically interactive and compile information, such as raw data and business models to identify and solve problems and to make well-informed decisions.[2] A business can successfully use such managerial system to gain a competitive edge in its specific industry as this system can ensure all decisions made are fit for the businesses current position and will not put the firm in a hazardous state once entered.
Describe the three quantitative models typically used by Decision Support Systems
There are three quantitative models implemented by Decision Support Systems. Such models consist of a sensitivity analysis, a what-if analysis and a goal-seeking analysis. A sensitivity analysis studies the impact one alteration of a facet in a business model will have on the entire business model used by the business. Through the use of this system, managers can alter a part of the businesses model and analyse how this impact affects the overall business model. Such method is referred to as a 'change, check and refine' method. A what-if analysis is another typical model used by decision Support Systems. This analysis identifies the impact of a specified change within the business model. For example, a manager may question what will happen to the businesses overall model if the firm introduced a new range of differentiated products onto the market. The manager or 'user' of the what-if analysis will propose such changes and analyse how this will impact on various situations and ultimately, the businesses overall model. There are technical programs which may be implemented during this analysis, such as Microsoft Excel. The final quantitative model typically employed by employees using decision support systems is a goal-seeking analysis. This analysis identifies the various inputs imperative to achieve the firm’s objectives. For example, such analysis could identify that a firm needed to improve the quality of its products in order to increase its business reputation. The goal-seeking analysis varies from the sensitivity and what-if analysis as it does not identify how altering a variable affects other variables[3]; however, such analysis alters variables to allow a specified goal or objective to be met.
Describe a business process and their importance to an organisation
A business process is ‘a defined set of business activities that represent the steps required to achieve a business objective’[5]. Business processes convert a range of inputs into a set of outputs which can be either categorised as goods, such as computer monitors, or services, such as a shop assistant serving a customer. Business processes are very important components of any business as they prove to be crucial for the smooth running of a firm. It is essential that businesses closely monitor and continuously improve their processes to gain a competitive edge by minimising costs associated with each process and to prevent the duplication of various processes. Firms may also choose to monitor their business processes to streamline them and to effectively compete with other firms in their industry. For example, Coles Myer decided to improve their commonly performed business process of serving customers. In order to keep up with their competitors Woolworth’s, who installed self-serving checkouts in their Big W stores in 2006, Coles Myer decided to introduce a range of improved self-serving machines in their grocery stores to reduce the time consumers had to wait in line to be served and to also reduce costs associated with hiring, training and retaining staff. The human resources of a firm or, staff are also seen as processes which ultimately contribute to the success of any business. Employees are seen as an important process within businesses, thus, managers must ensure that they critically monitor such process to ensure staff are satisfied and retained. Columbia Sportswear Company aimed to improve the staff business process by introducing Microsoft driven software which would enable staff to work from home or anywhere across the world, allowing them to improve and balance their lifestyle.[6] Business processes can be categorised as departmental processes which are performed by a sole department alone or cross-departmental processes. For example, a departmental process may consist of the financial department producing budgets, whereas, a cross-departmental process may include the human resources function surveying all staff members to evaluate their job-satisfaction. Business processes can also be categorised as business-facing processes. Such processes are the functions performed to ensure the successful running of a business and are performed 'behind closed doors', for example, the creation of marketing campaigns. Customer-facing processes are functions illustrated to the external customers of a business, for example, the packing of shelves. As business processes prove to be essential and highly important in any firm, “organisations can only be as effective as their processes”.[7]
Compare business process improvement and business process re-engineering.
Business process improvement aims to simply improve or restructure the already existent processes within a firm, whereas, business process re-engineering ultimately eliminates already existent processes with an aim to redesign a new work flow or set of processes. The main aim of both improvement processes is to achieve efficiency within the firm. Business process improvement systematically identifies current processes within a firm and proposes alterations which aim to improve the work flow within a firm. Such task is crucial to ensure a business maintains a competitive edge in the highly technical/electronic marketplace of the modern commercial world. For example, Alpha Consulting Asia-Pacific improved their communication business process by relying on the use of internet teleconferencing to have an easy access to clients internationally. Businesses also implement the use of business process improvement strategies to ensure all business process are regularly improved to ensure their consumers demands are desires are met. Such attitude allows firms to maintain a strong and loyal client base. The ultimate aim of business process improvement systems is to measure and understand the current processes used by a firm and enhance such processes accordingly. Once a business has identified its current processes, it establishes measures of ways to improve their processes. The business may then choose to make alterations to the already existent process. Once changes have been made, the improved business process is measured in terms of its performance. As aforementioned, business process improvement systems seek to enhance of improve the already existent business processes of a firm, whereas, business process reengineering systems identify and eliminate current business processes with an aim to 'reinvent them from scratch'.[8]This system focuses on creating entirely new processes formulated from thoroughly analysing the advantages and disadvantages of the current processes used by a particular firm. A Brisbane Consulting Group named Prime PMG used a business process re engineering program to innovate their business processes. According to Business Driven Information Systems (2010), Baltzan et al, (Page 70), one of the partners in this firm stated “...removing non-value adding tasks... has contributed to a radical change”. It is evident from such statement that the use of business process re engineering within a firm does create a 'radical change' which aims to be beneficial for the firm. The business process re engineering system initially sets project scope, then studies its competition, formulates new processes and implements a solution.[9]
Describe the importance of business process modelling (or mapping) and business process models.
Business process modelling or mapping and the use of business process models is considered extremely important in all businesses who wish to implement changes to their already established business processes. These processes are considered crucial in most businesses as they allow the various business processes to be illustrated in a gradual manner and allow the analysis of current processes. Business process modelling or mapping refers to the creation of a thorough flowchart or process map which displays the inputs and activities needed to perform a certain business process in a chronological order. Business process modelling is important as it maps out how various inputs will be mixed together to create a reformed or new process. Business process modelling or mapping are used after business models of processes have been chosen and process to be an effective and efficient way to initiate change within a firm. Business process models displays the various activities undertaken to perform a business process using boxes and arrows to represent 'data and interfaces'.[11]Business process models consist of 'as-is models' which display the current state of the business or the current processes use. Business process models also consist of 'to-be models' which display the forecasts processes or models to be implemented by a business. The importance of business process modelling or mapping within a business is evident as such system is used to thoroughly display the details of a particular business process/es, ensure accuracy when describing new process models, focus on model interfaces and interrelations and to also provide a critical process analysis. [12]
Example of a Business Process Model [13]
[1] Business Driven Information Systems (2010), Online Resources, Week 2 Slideshow
[2] http://www.informationbuilders.com/decision-support-systems-dss.html, 2010, Business Intelligence
[3] Business Driven Information Systems (2010), Baltzan et al, Page 59
[4] Business Driven Information Systems (2010), Baltzan et al
[5] John Moe, http://www.modernanalyst.com/Resources/Articles/tabid/115/articleType/ArticleView/articleId/936/More-Confusing-SOA-Terms.aspx, 2006
[6] Business Driven Information Systems (2010), Baltzan et al, Page 70
[7] Business Driven Information Systems (2010), Baltzan et al, Page 70
[8] Business Driven Information Systems (2010), Baltzan et al, Page 72
[9] Business Driven Information Systems (2010), Baltzan et al, Page 73
[10] http://www.extremeit.net/magnoliaPublic/extremeit/bpr/middleColumnParagraphs/0/image/bpr.jpg, Extreme IT, 2008
[11] Business Driven Information Systems (2010), Baltzan et al, Page 79
[12] Business Driven Information Systems (2010), Baltzan et al, Page 79
[13] http://bpmfundamentals.files.wordpress.com/2009/04/contextdiagramdfd.jpg, Ian Louw, 2007
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