What is the most common type of information systems are those designed for?

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DEFINITION OF INFORMATION SYSTEM – ” An information system is a set of interrelated components that works together to collect, process, store and breakdown the information to support decision making. ”

Following are the DIMENSIONS of information system:

1.ORGANIZATIONAL DIMENSION : Information system are part of organization. Information system will have the standard operating procedure and culture of an organization embedded within them. This involves:
a)Functional specialties b)Business processes c)Culture d)Political interest groups

2.MANAGEMENT DIMENSION : Managers perceive business challenges in the environment. Information systems supply tools and information needed by the managers to allocate,coordinate and monitor their work, make decision,create new products and services and make long range strategic decision.

3.TECHNOLOGY DIMENSION : Management uses technology to carry out their functions. It consists of – computer hardware/software, data management technology, networking/telecom technology.Its one of the many tools managers use to cope with the change.

Information Systems are classified by organisational levels, mode of data, processing, system objectives and type of support provided.

Following are the TYPE of information system:

1. Transaction Processing System (TPS):

  • Transaction Processing System are information system that processes data resulting from the occurrences of business transactions
  • Their objectives are to provide transaction in order to update records and generate reports i.e to perform store keeping function
  • The transaction is performed in two ways: Batching processing and Online transaction processing.
  • Example: Bill system, payroll system, Stock control system.

2. Management Information System (MIS):

  • Management Information System is designed to take relatively raw data available through a Transaction Processing System and convert them into a summarized and aggregated form for the manager, usually in a report format. It reports tending to be used by middle management and operational supervisors.
  • Many different types of report are produced in MIS. Some of the reports are a summary report, on-demand report, ad-hoc reports and an exception report.
  • Example: Sales management systems, Human resource management system.

3. Decision Support System (DSS):

  • Decision Support System is an interactive information system that provides information, models and data manipulation tools to help in making the decision in a semi-structured and unstructured situation.
  • Decision Support System comprises tools and techniques to help in gathering relevant information and analyze the options and alternatives, the end user is more involved in creating DSS than an MIS.
  • Example: Financial planning systems, Bank loan management systems.

4. Experts System:

  • Experts systems include expertise in order to aid managers in diagnosing problems or in problem-solving. These systems are based on the principles of artificial intelligence research.
  • Experts Systems is a knowledge-based information system. It uses its knowledge about a specify are to act as an expert consultant to users.
  • Knowledgebase and software modules are the components of an expert system. These modules perform inference on the knowledge and offer answers to a user’s question

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Organizations use several types of information systems to suit their needs. The various types of information systems that an organization uses may be classified into the following categories:

  1. Office automation systems
  2. Transaction processing system
  3. Decision support systems
  4. Executive information systems
  5. Business expert system

Apart from these broad classes of information systems, organizations also use specific information systems for some special tasks like executive information system, enterprise (wide) resource planning systems, customer relationship management systems and supply chain management system. These systems also fall under the above broad classification.

Office Automation Systems

This type of information system aids in automating office tasks. They have a limited role in decision-making and are more useful for operational level people. The information coming out of this kind of system can be used for rule-based decision-making for managers at the operational level. These systems however play an important role in automating several functions of an office and thus help in creating paperless offices. These kinds of systems help in increasing the productivity and efficiency of the office workforce by automating simple tasks. These systems mostly deal with operational data. More and more modern businesses are opting for this paperless office environment as this brings in the following unique advantages for the business:

  1. Office work becomes faster and process driven.
  2. All basic level data is digitized and stored for future action.

An example of office automation system is the office suite of software that helps in automating simple office tasks like presentations and documentation. Sometimes we also come across a class of systems called the operations support system (OSS). OSS also work with the lowest levl31of management is ensuring that the operations of the firm are performed smoothly. OSS can be very different from Office Automation System even though they both help bottom level managers, in term of the information complexity involved.

Transaction Processing System

This type of system is critical to the smooth functioning of an organization. The objective of this kind of system is to capture all transaction related data between the organization and its external and internal customers. Typically, these transaction level data are stored in a pre-formatted manner in a relational database for further action in future. TPS is the most widely used form of information systems as they provide the management with the flexibility of storing data in a structured manner and retrieving it at a later date using a query facility. The system also helps in aggregating and summarizing the data for creating of management reports. These reports are further improved by using visualization tools that help the management in understanding situations and scenarios better. These systems deal with tactical data from within the organization.

An example of TPS would be the sales management system with a relational database management system at the server side back end and a customized front end to interact with the users.

Decision Support Systems

Decision support systems help senior management to take strategic decisions. Contrary to the other systems, decision support systems are developed with the objective of providing the users (top management personnel) with unstructured information. These systems help the management to develop ‘what if analysis’ so that different scenarios can be developed for decision-making. Decision support systems deal with both internal and external data. Such systems are custom built with features like business dashboard and scenario panel.

Such systems are complex with working models (internal) on the data to provide the senior managers with decision support. Unlike transaction processing systems, these systems are not query dependent only. Their main role is to access data from a data repository and then pass that data through a model (mathematical, heuristic, statistical, econometric, operations research and combinatorial), so that the senior management can take better decisions by doing either ‘what if analysis’ and scenario building or by doing ‘predictive analysis’ to get some insight into a business issue. Such systems are very costly to build and require advanced analytics tools.

Executive Support System

Executive support system is also known as the executive information (support) system. It began to gain acceptance in the mid-eighties in large corporations and is now used even is smaller corporations. In functionality, it is nearer to decision support systems than management information systems. Its main objectives are to provide a macro-organization wide view for senior executives, by providing a very user-friendly user-interface so that proactive steps may be taken to beat competition. It provides timely and proactive organization tracking and control. It is able to perform these tasks by providing fast access to all type of data and by filtering and tracking critical data and information. It helps to identify problems and opportunities and thus, helps senior executives to troubleshoot problems and take advantage of opportunities.

Business Expert System

Some business scenarios are so complex that they require the help of advanced systems that can provide expert solutions. These systems use artificial intelligence and neutral networks to reach the performance level of a human expert thereby helping the organization. These systems are different from any other information system as they are capable of decision-making by themselves without human intervention. Actually, these systems are loaded with the knowledge of experts and these systems simply simulate the expert knowledge to arrive at decisions.


What is the most common type of information systems are those designed for?