Types of Information Systems

Types of information systems[edit]


A four level pyramid model of different types of Information Systems based on the different levels of hierarchy in an organization
The "classic" view of Information systems found in the textbooks
[38]
in the 1980s was of a pyramid of systems that reflected the
hierarchy of the organization, usually transaction processing systems at the bottom of the pyramid, followed by management
information systems, decision support systems, and ending with executive information systems at the top. Although the pyramid
model remains useful, since it was first formulated a number of new technologies have been developed and new categories of
information systems have emerged, some of which no longer fit easily into the original pyramid model.
Some examples of such systems are:
 data warehouses
 enterprise resource planning
 enterprise systems
 expert systems
 search engines
 geographic information system
 global information system
 office automation.
A Computer(-Based) Information System is essentially an IS using computer technology to carry out some or all of its planned
tasks. The basic components of computer based information system are:
 Hardware- these are the devices like the monitor, processor, printer and keyboard, all of which work together to accept,
process, show data and information.
 Software- are the programs that allow the hardware to process the data.
 Databases- are the gathering of associated files or tables containing related data.
 Networks- are a connecting system that allows diverse computers to distribute resources.
 Procedures- are the commands for combining the components above to process information and produce the preferred output.
The first four components (hardware, software, database and network) make up what is known as the information technology
platform. Information technology workers could then use these components to create information systems that watch over safety
measures, risk and the management of data. These actions are known as information technology services.
[39]

Certain information systems support parts of organizations, others support entire organizations, and still others, support groups of
organizations. Recall that each department or functional area within an organization has its own collection of application programs,
or information systems. These functional area information systems (FAIS) are supporting pillars for more general IS
namely, business intelligence systems and dashboards
[citation needed]
. As the name suggest, each FAIS support a particular function
are within the organization, e.g.: accounting IS, finance IS, production/operation management (POM) IS, marketing IS, and human
resources IS. In finance and accounting, managers use IT systems to forecast revenues and business activity, to determine the best
sources and uses of funds, and to perform audits to ensure that the organization is fundamentally sound and that all financial reports
and documents are accurate. Other types of organizational information systems are FAIS, Transaction processing
systems, enterprise resource planning, office automation system, management information system, decision support system, expert
system, executive dashboard, supply chain management system, andelectronic commerce system. Dashboards are a special form
of IS that support all managers of the organization. They provide rapid access to timely information and direct access to structured
information in the form of reports. Expert systems attempt to duplicate the work of human experts by applying reasoning capabilities,
knowledge, and expertise within a specific domain.



Decision Support Systems

Transaction processing and management information systems provide information on a regular
basis. Frequently, however, users need information not provided in these reports to help them make
decisions. A sales manager, for example, might need to determine how high to set yearly sales quotas
based on increased sales and lowered product costs. Decision support systems help provide information
to support such decisions.

A decision support system (DSS) is an information system designed to help users reach a decision when
a decision-making situation arises. A variety of DSSs exist to help with a range of decisions.

A decision support system uses data from internal and/or external sources.

Internal sources of data might include sales, manufacturing, inventory, or financial data from an
organization’s database. Data from external sources could include interest rates, population trends, and
costs of new housing construction or raw material pricing. Users of a DSS, often managers, can
manipulate the data used in the DSS to help with decisions.

Some decision support systems include query language, statistical analysis capabilities, spreadsheets, and
graphics that help you extract data and evaluate the results. Some decision support systems also include
capabilities that allow you to create a model of the factors affecting a decision. A simple model for
determining the best product price, for example, would include factors for the expected sales volume at
each price level. With the model, you can ask what-if questions by changing one or more of the factors
and viewing the projected results. Many people use application software packages to perform DSS
functions. Using spreadsheet software, for example, you can complete simple modeling tasks or what-if
scenarios.

A special type of DSS, called an executive information system (EIS), is designed to support the
information needs of executive management. Information in an EIS is presented in charts and tables that
show trends, ratios, and other managerial statistics. Because executives usually focus on strategic issues,
EISs rely on external data sources such as the Dow Jones News/Retrieval service or the Internet. These
external data sources can provide current information on interest rates, commodity prices, and other
leading economic indicators.

To store all the necessary decision-making data, DSSs or EISs often use extremely large databases, called
data warehouses. A data warehouse stores and manages the data required to analyze historical and
current business circumstances.




Types of Information Systems

Types of Information systems
(Source: Management Information Systems, Laudon and laudon)
The six major types of information systems corresponding to each organizational level
(the four levels shown in figure above) are:
1. Transaction Processing Systems (TPS): serve the operational level of an
organization.
2. Knowledge work systems (KWS)
3. Office automation systems (OAS) to serve the knowledge level of an organization.
4. Decision-support systems (DSS)
5. Management information systems (MIS) serve the management level of the
organization.
6. Executive support systems (ESS) serve the strategic level of an organization.