Types of Information System
The many different types of information systems can be
divided into categories based on where they are used in the
hierarchy of an organization as shown in pyramid model.
Pyramid model
Transaction Processing System
Transaction Processing Systems are operational-level
systems at the bottom of the pyramid. They are usually
operated directly by shop floor workers or front line
staff, which provide the key data required to support
the management of operations.
A business will have many (sometimes several) TPS;
e.g.: billing systems to send invoices and statements to
clients; production and purchasing systems to analyze
and calculate all raw material requirements etc.
Decisions made at TPS level are highly structured.
TPS
Some examples of TPS
Payroll systems
Order processing systems
Reservation systems
Stock control systems
Systems for payments and funds transfers
Management Information System
Many of the different types of Information Systems found in
commercial organizations are referred to as "Management
Information Systems". However, within our pyramid model,
Management Information Systems are management-level
systems that are used by middle managers to help ensure
the smooth running of the organization.
These systems usually take data from the transaction
processing systems and summarize it into a series of
management reports. MIS is an information system that
generates exact, timely and structured information so
managers and other users can make decisions, resolve
problems, supervise activities, and track progress.
MIS
Some examples of MIS
Sales management systems
Inventory control systems
Budgeting systems
Management Reporting Systems (MRS)
Personnel (HRM) systems
Decision Support System
A Decision Support System can be seen as a knowledge based
system, used by senior managers. These systems are often used
to analyze existing structured information and allow managers
to project the potential effects of their decisions into the
future. Decisions made at this level are semi structured.
DSS is an information system intended to help users reach a
decision when a decision-making situation arises. This system
comprises tools and techniques to help collect relevant
information and analyze the choices and alternatives. DSS
usually involves use of complex spreadsheet and databases to
create models which will help determine difficult situations
and its possible outcomes.
DSS
Some examples of DSS
Group Decision Support Systems (GDSS)
Computer Supported Co-operative work (CSCW)
Logistics systems
Financial Planning systems
Spreadsheet Models
Executive Information System
EIS is strategic-level information system that is found
at the top of the Pyramid. They help executives to
analyze the environment in which the organization
operates, to identify long-term trends, and to plan
appropriate courses of action. The information in such
systems is often weakly structured and comes from
both internal and external sources.
For example, a CEO may require overall sales for the
company, along with sales for every department
separately, and general economic data for the year.
EIS
Some examples of EIS
EIS tend to be highly individualized and are often custom made
for a particular client group; however, a number of off-the-shelf
EIS packages do exist and many enterprise level systems offer a
customizable EIS module.
The role of EIS
Are concerned with ease of use
Are concerned with predicting the future
Are effectiveness oriented
Are highly flexible
Support unstructured decisions
Use internal and external data sources
Fundamental role of IS in business
Day To Day Survival:
Businesses must invest in information systems and
technology as they are essential to doing business. This
necessity is caused by the industry level changes and firms
need to use information systems and technology in order to
provide the capability to respond to these.
Information systems enables companies to react, respond,
cater, store, retrieve, disseminate and control their new
valuable asset that is information. In the future, a good
information system in a business will no longer be an
option, it will become a compulsory in determining success.
Fundamental role of IS in business
Operations
A business information system carries out specific functions
in support of operations, including payroll, employee record
storage, preparing and storing company documents and
credit card processing. If your company operates a
manufacturing line, the information system can schedule
tasks and processes while keeping quality records. Some
companies, such as graphic designers or advertising
companies, use the information system to produce their
products and services. In supporting operations, the
information system can increase efficiency and improve
employee productivity.
Fundamental role of IS in business
Controls
Monitoring and controlling the activities of employees is a core
function of information systems. This is especially true of financial
transactions in which management has a duty to prevent fraud and
theft. In this role, the security of the information system is critical,
as managers rely on it to track payments received from customers
and invoices from suppliers.
The system imposes its control functions by allowing only
authorized employees to log in and access the relevant functions.
For example, only a few employees may be authorized to generate a
company check. In addition to limiting who can perform such
functions, the system keeps track of who logged in and carried out
the task.
Fundamental role of IS in business
Decisions
Another fundamental role for information systems is
management support in making decisions. Managers can
get all the information they need about company activities
from the system. Complete, accurate information means
management decisions are more effective. More
sophisticated systems can go beyond supplying data to
running scenarios: Managers present hypothetical
decisions and the system shows what the results might be.
This function of information systems helps managers
make decisions that have relatively predictable results.
