Types of Information Systems

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Conceptually, information systems in the real world can be classified in several different ways. For example, several types of information systems can be classified conceptually as either  operations or management information systems. (i) Operations Support Systems

Inform Informati ation on system systemss have always always been been needed needed to proces processs data data generat generated ed by, and used used in,  business operations. Such operations support systems produce a variety of information products for internal and external use. However, they do not emphasize producing the specific information   products that can best be sued by managers. Further processing by management information systems is usually required. The role of a business firm’s operations support systems is to effici efficient ently ly proces processs busine business ss trans transact action ions, s, control control indust industri rial al proces processes ses,, suppor supportt enterp enterpris risee communications and collaboration, and update corporate databases. (ii) Transaction Processing Systems

Operations support systems include the major category of transaction processing systems (TPS). Transactio Transaction n processing processing systems systems record record and process process data resulting resulting fro business business transaction transactions. s. Typica Typically lly example exampless are inform informati ation on system systemss that that proces processs sales, sales, purchas purchases, es, and invent inventory ory changes. The results of such processing are sued to update customer, inventory, and other  organizational databases. These databases then provide the data resources that can be processed and used used by manage managemen mentt inform informati ation on system systems, s, decisio decision n suppor supportt syste systems, ms, and execut executive ive information systems. Transaction processing systems process transactions in two basic ways. In batch processing, transactions data is accumulated over a period of time and processed periodically. In real-time (or online) processing, data is processed immediately after a transaction occurs. For example,  point of sale (POS) systems at retail stores may use electronic cash register terminals to capture and transmit sales data over telecommunication links to regional computer centers for immediate (real-time) or nightly (batch) processing. (iii) Process Control Systems

Operat Operation ion suppor supportt syste systems ms also also make make routi routine ne decisi decisions ons that that contro controll operat operation ional al proces processes ses.. Examples Examples are automatic automatic inventory reorder decisions and production production control decisions. decisions. This includes a category of information systems called process control systems, in which decisions adjusting a physical production process are automatically made by computers. For example, a  petroleum refiner uses electronic sensors linked to computers to continually monitor chemical   processes. The computers monitor a chemical process, capture and process data detected by sensors, and make instant (real-time) adjustments to appropriate refinery processes.

(iv) Enterprise Collaboration Systems

Enterprise collaboration systems are information systems that use a variety of information technologies to help people work together. Enterprise collaboration systems help us collaborate to communicate ides, share resources, and coordinate our cooperative work efforts as members of the many formal and informal process and project teams and other workgroups that are a vital   part of today’s organizations. Thus, the goal of enterprise collaboration systems is to use information technology to enhance the productivity and creativity of teams and workgroups in the modern business enterprise. (v) Management Support Systems

When information systems focus on providing information and support for effective decision making by managers, they are called management support systems. Management Information Systems

Management information systems (MIS) are the most common form of management support systems. They provide managerial end users with information products that support much of  their day-to-day decision-making needs. Management information systems provide a variety of  reports and displays to management. The contents of these information products are specified in advance by managers so that they contain information that managers need. Management information systems retrieve information about internal operations from database that have been updated by transaction processing systems. They also obtain data abo ut the business environment from external source. Information products provided to managers include displays and reports that can be furnished (1) on demand, (2) periodically, according to a predetermined schedule. (a) Decision Support Systems

Decision support systems (DSS) are a natural progression from information reporting systems and transaction processing systems. Decision support systems are interactive, computer-based information systems that use decision models and specialized database to assist the decision making process of managerial end users. (b) Executive Information Systems

Executive information systems (EIS) are management information systems tailored to the strategic information needs of top management. Top executives get the information they need from many sources, including letters, memos, periodicals, and reports produced manually as well as by computer systems. Other sources of executive information are meetings, telephone calls, and social activities. Thus, much of a top executive’s information comes from non-computer  services. Computer generated information ahs not played a primary role in meeting many top executives’ information needs.

Other classifications of Information Systems (i) Expert Systems

An expert system is a knowledge-based information systems; that is, it uses its knowledge about a specific area to act as an expert consultant to users. The components of an expert system are a knowledge base and software modules that perform inferences on the knowledge and offer  answers to a user’s questions. Expert systems are being used in many different fields, including medicine, engineering, the physical sciences, and business. For example, expert systems now help diagnose illnesses, search for minerals, analyze compounds, recommend repairs, and do financial planning. Expert systems can support either operations or managemen t activities. (ii) Knowledge Management Systems

Knowledge Management systems (KMS), Workers create, organize, and share important   business knowledge wherever and whenever it is needed. For example, many knowledge management systems rely on Internet and intranet Web sites, knowledge bases, and discussion forums as key technologies for gathering, storing, and disseminating business knowledge. In this way, knowledge management systems facilitate organization learning and knowledge creation and dissemination within the business enterprise. (iii) Strategic Information Systems

The strategic role of information systems involves using information technology to develop   products, services, and capabilities that give a company strategic advantages over the competitive forces it faces in the global marketplace. This creates strategic information system, information systems that support or shape the competitive position and strategies of an enterprise. So a strategic information system can be any kind of information systems (TPS, MIS, DSS, etc.) that helps an organization gain a competitive advantage, reduce a competitive disadvantage, or meet other strategic enterprise objectives. (iv) Business Information Systems

As a future managerial end user, it is important for you to realize that information systems directly support both operations and management activities in the business functions of  accounting, finance, human resource management, marketing, and operations management. Such  business information systems are needed by all business functions. For example, marketing managers need information about sales performance and trends provided  by marketing information systems. Financial managers need information concerning financing costs and investment returns provided by financial information systems. (v) Integrated Information Systems

It is also important to realize that information systems in the real world are typically integrated combinations of several types of information systems we have just mentioned. That’s because

conceptual classification of information systems are designed to emphasize the many different roles of information systems. In practice, these roles are integrated into composite or crossfunctional information systems that provide a variety of functions. Thus, most information systems are designed to produce information and support decision making for various levels of  management and business functions, as well as do record keeping and transaction processing systems.

Information System Activities

The major activities of an information system are; (i) Input of data resource:

Data about business transactions and other events must be captured and prepared for processing  by the input activity. Input typically takes the form of data entry activities such as recording and editing. End uses typically record data about transactions on some type of physical medium such as paper form, or enter it directly into a computer system. This usually includes a variety of  editing activities to ensure that they have recorded data correctly. Once entered, data may be transferred onto a machine-readable medium such as a magnetic disk until needed for processing. For example, data about sales transactions can be recorded on source documents such as paper  sales order forms. (A source document is the original formal record of a transaction). Alternately, salespersons can capture sales data using computer keyboards or optical scanning devices; they are visually prompted to enter data correctly by video displays. This provides them with a more convenient and efficient user interface, that is, methods of end user input and output with a computer system. Methods such as optical scanning and displays of menus, prompts, and fill-inthe-blanks formats make it easier for end users to enter data correctly into an information system. (ii) Processing of data into information:

Data is typically subjected to processing activities such as calculating, comparing, sorting, classifying, and summarizing. These activities organize, analyze and manipulate data, thus converting them into information for end users. The quality of any data stored in an information system must also be maintained by a continual process of correcting and updating activities. For example, data received about a purchase can be (1) added to a running total of sales results, (2) compared to a standard to determine eligibility for a sales discount, (3) sorted in numerical order based on product identification numbers, (4) classified into product categories (such as food and nonfood items), (5) summarized to provide a sales manager with information about various product categories, and finally, (6) used to update sales records.

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