Chapter Two: Digital Transformation: Decisions, Processes, and Artificial Intelligence

Vocabulary flashcards covering key terms from Chapter 2: Decision Support Systems and Digital Transformation (Sections 2.1 and 2.2), including MIS/DSS concepts, decision levels, metrics, and business process modeling.

Decision Support System (DSS)

A managerial‑level information system that models information to support decision making, especially for semistructured problems, using tools like what‑if, sensitivity analysis, goal seeking, and optimization.

Management Information System (MIS)

Systems used to support decision making across the organization; encompasses TPS, DSS, and EIS and integrates data, processes, and people.

Critical Success Factor (CSF)

The crucial steps a company must perform to achieve goals, objectives, and implement strategies.

Key Performance Indicator (KPI)

A quantifiable metric used to evaluate progress toward CSFs; examples include turnover rate, number of new customers, and average customer spending.

Operational Decision‑Making Level

Level where employees perform day‑to‑day, structured decisions; relies on Transaction Processing Systems (TPS) and OLTP.

Managerial Decision‑Making Level

Level where semi‑structured decisions are made to optimize operations; relies on DSS and OLAP.

Strategic Decision‑Making Level

Level where unstructured decisions set overall direction and long‑term objectives; relies on EIS and external data.

Structured Decision

Decisions with clear, established processes and rules, typically at the operational level.

Semistructured Decision

Decisions with some established processes but requiring human judgment; common at the managerial level.

Unstructured Decision

Decisions lacking standard procedures or rules; typical of strategic, high‑level choices.

Six‑step Decision‑Making Process

Problem identification; data collection; solution generation; solution test; solution selection; solution implementation.

Transaction Processing System (TPS)

Basic operational system that captures and processes daily transactions and supports structured decisions at the operational level.

Online Transaction Processing (OLTP)

Technology for real‑time capture, processing, and updating of transaction data.

Online Analytical Processing (OLAP)

Technology that analyzes data to create business intelligence and support strategic decision making.

Executive Information System (EIS)

A specialized DSS for senior executives to support unstructured, long‑term decisions with external data.

Benchmarking

The process of comparing system results to optimal performance or best practices to identify improvements.

Efficiency Metrics

MIS metrics that measure the performance of the MIS itself (e.g., throughput, transaction speed, usability, and availability).

Effectiveness Metrics

MIS metrics that measure the impact of MIS on business processes (e.g., customer satisfaction, conversion rates).

Source Document

The original transaction record used as input to processing.

CRUD

Create, Read, Update, Delete—the basic data operations on information within a TPS/MIS.

Business Process Modeling Notation (BPMN)

A graphical notation used to depict the steps in a business process.

As‑Is Process Model

The current state of a process as it exists before improvements are made.

To‑Be Process Model

The future state of a process after applying changes and improvements.

Customer‑Facing Process

A process that results in a product or service delivered to an external customer.

Business‑Facing Process

An internal process not visible to customers but essential to running the business.

Workflow

The sequence of tasks, activities, and responsibilities required to execute each step in a process.

Digitization

Automation of manual and paper‑based processes into a digital format.

Automation

Computerizing manual tasks to improve efficiency and reduce costs.

Use Case

A description of how a system, product, or service can be used to achieve specific goals or tasks.

Digital Dashboard

A dashboard that tracks CSFs and KPIs by aggregating data from multiple sources for the user.

Interrelationship Between Efficiency and Effectiveness

Positioning for optimal operation where both efficiency and effectiveness are high, typically in the upper‑right quadrant.