Chapter Two Questions

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

• TPS (Transaction Process Systems): Record every transaction of the business, and can be managed in various ways including batch and online systems. They give businesses a competitive advantage as they have a fairly fast response time, convey impressions to customers about the quality of the business and work in real time.
• DDS (Decisional Support System): assist managers in the decision making process especially when it comes to unstructured or semi-unstructured decisions.
  

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

1. Sensitivity analysis: The assessment of the impacts that a change in a part of the model has on the other parts of the model.

2. What if analysis: inspects the impacts a change in assumption has on the solution.

3. Goal seeking analysis: concerned with finding the inputs which are needed in order to achieve the goals set by the business.

3. Describe a business processes and their importance to an organisation.

A business process is the set of standardised tasks which are followed in order to complete specific tasks/goal/output. A business must continually assess and improve their business processes as they vital to the organisation, as a business is only as good as its processes.

4. Compare business process improvement and business process re-engineering.

Business Process Improvement: Is a model used by a business in order to improve their current processing systems. The business must first understand and measure the process, which is currently in use, and then make adjustments, to improve their systems.

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Business Process Reengineering: This is a model which views the current process system as broken or inappropriate and then redesigns the process starting from the beginning.

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

BPM’s are in depth flow charts that aim too:

• Process details
• Accurately describe the process model
• Focus on the model’s interfaces
• Analyse the business process

Chapter One Questions

Explain information technology’s role in business and describe how you measure success?

IT is everywhere in business, which is why it is essential to learn when, working within any business. Business IT is a support system for business and they therefore must align themselves with the goals of the business. Information technology effects the major functions of the business: accounting, finance, human resources, sales, marketing, operations management and management of systems.

IT is measured through the use of efficiency metrics and effectiveness metrics.

• Efficiency Metric: Measure the performance of the system itself including things such as speed, throughput and availability.
• Effectiveness measurements: Measure the impact IT systems have on the business and its activities including customer satisfaction and conversion rates.

List and describe each of the forces in Porter’s Five Forces Model?

• Buyers (Buyer power): Buyer power is high when there are many choices of where to purchase their products from and low when there are few choices.
• Suppliers (Supplier power): If supplier power is high, then they can greatly influence the industry by doing such things as charging higher prices.
• Threat of substitute products or service: High when there are many products or services available to buyers e.g. bread. Low when there are fewer options for buyers e.g. medical equipment
• Threat of new entrants: High threat when there are many opportunities for new businesses to enter the market. Low threat e.g. phone companies
• Rivalry: Competition is growing in all industries, so it is therefore becoming more difficult to avoid. Rivalary also makes industries less secure as there are many more substitutes.

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Describe the relationship between business processes and value chains?

Business processes are a standardised set of tasks which or followed in order to accomplish a specific task. A value chains is when value is added to the product or service as is it goes through the various processes of the business.

Compare Porter’s three generic strategies?

1. Broad Cost Leadership: Reach a large market segment.

2. Broad differentiation: Has many products but promotes differences between them.

3. Focused strategy: Focuses on a niche market within the large market segment.

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