In this Information Era, adequate and relevant information is the key to decision-making and effective operation for any entity. An information system, which is a coordinated and integrated network system, is thus, an essential component for the smooth running of any organization, be it a start-up or a bigger establishment. Every business organization or firm is dependent upon an information system for an array of functions, like data processing, operation management, smoothening customer interactions, competition tracking, etc. In addition, it can aid a businesses’ growth by optimizing its efficiency, enhancing employee monitoring, better inter and intra-departmental communication and collaboration.
Here is a piece covering the most popular information system types, along with their applicability.
Information System: What is it?
An information system is a bundle of various information resources, like hardware, software, etc., aimed to gather information, followed by its processing, storing, and distribution. While you are going through this article itself, you are putting some examples of information systems to use, like your laptop or mobile, or computer.
Businesses and other organizations depend on these systems to communicate with their suppliers and customers and compete with their rivals. Even the smooth running of a company’s supply chain depends on an information system.
Information System Classification
Classification by organizational level is the most common segregation of information systems. Understanding the levels gives a vivid picture of the information required of any user at that level.
Level of operational management: This level deals with the company’s daily business transactions, and the users here have rules to guide their decisions. Thus, they have structured decisions. For instance, a store offers credit facilities to customers but has a credit policy posing a borrowing limitation. The users in this level decide to extend credit only after they are aware of the credit information system.
Level of tactical management: This level includes the supervisors, mid-level managers, etc., who are responsible for monitoring activities of the users in operational management. At this level, the users make semi-structured decisions, guided by established guidelines and their judgment. For instance, after studying the customer’s payment history information, the supervisor is responsible for making an exception and uplifting a customer’s borrowing limit.
Level of strategic management: Being the senior-most level, the users here create unstructured decisions. Their decisions are dependent upon the information collected from the other two levels.
Six Popular Information Systems
Now that you know what information systems are and their classification, look at these six types of information systems. Although the types are not limited to these six, they are the most popular and widely used in business organizations.
Transaction Processing System
Transaction Processing System or TPS is responsible for data processing, which arises from business transactions. Every business operation includes daily business transactions, like order entries, accumulation of goods receipts, record keeping of the company’s employees, hiring, etc. Transaction Processing System has the sole objective of providing transaction details to keep the company’s records updated.
Applications:
Payroll system: This system helps process staff salaries, manage loans, etc.
Stock control system: This system helps a company keep pace with their inventory level stocks.
Bill system: This system helps in keeping track of sales amounts.
Office Automation System
The Office Automation System, abbreviated as OAS, includes computers, communication-allied technologies, and various personnel involved in official tasks. OAS is responsible for supporting official tasks at every level, ranging from clerical to managerial. Activities performed with the help of Office Automation System include emailing, office calendar maintenance, document printing, etc. Office Automation System works to enhance inter-departmental communication for smoothly performing any task.
Applications
Voice mail: This calling service helps record and save telephone messages, which can be retrieved per needs.
Email: This application enables message or document transfer (or any other form of data like images, videos, audios, etc.) with the aid of communication lines.
Word processing: It is used to prepare electronically printable materials, like documents, memos, reports, etc. The keyboard helps in text generation and is displayed via the machine’s display unit. The texts in any word processing can be modified, saved, and reproduced by using commands, and it also facilitates grammar and spell checks, index creation, etc.
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Knowledge Work System
Knowledge Work System, abbreviated as KWS, enhances knowledge creation and ensures that both technical skill and knowledge are properly integrated into your business. KWS helps generate and propagate new information using communication, analytical, document management, and graphical tools. It is vital that KWS has easy accessibility to external databases and a user-friendly interface, ensuring that users can access information swiftly.
Applications:
CAD or Computer-Aided Design system: This unique system is responsible for automatically creating computer graphics and designs. CAD can provide specific designs required in the tooling-manufacturing process.
Financial workstation: These systems are responsible for combining large chunks of data, both from external and internal sources, market and management data, research reports, etc. These systems can analyze large data volumes in a jiffy.
Virtual Reality Systems: This system uses various aural, visual and haptic displays and possesses capabilities beyond CAD.
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Management Information System
MIS or Management Information System is a valuable tool for middle managers because they are often required to look into admin duties, monitor the employee performances, and make sure they are in tune with the company’s needs. This system helps these managers to plan, control and decide the workflow by pulling out data from multiple TPSs. MIS is responsible for compiling this data and its corresponding presentation. MIS can produce various types of reports, like ad-hoc reports, summary reports, etc.
Applications:
- HR management system
- Sales management system
Decision Support System
Decision Support System or DSS is directed towards semi-structured decision-making of the managers in an organization. DSS helps to summarize (in charts, tables, etc.) or analyze vast chunks of information into simpler forms so that decision making on the manager’s part becomes easier. For instance, a DSS in a bank will help the managers in interpreting and analyzing varying trends of loans or deposits and finalizing a yearly target.
Applications:
- Inventory management to itemize an organization’s assets and boost profit.
- Optimizing sales in a company.
- Planners can use DSS to monitor the existing sales pattern in a company and design sales projections.
- In agriculture, farmers can use DSS tools to plan their crops by analyzing the best season for plantation and harvesting.
- DSS has been used in certain states for weather forecasting and hazard forecasting.
Executive Support System
ESS or Executive Support System is much like MIS, except that it is for decision-making at the executive level. With higher stakes, decisions demand to be insightful and require more judgment. Thus, ESS aims to provide better communication, enhanced computation capacities, and greater display options. For making the decisions better and more effective, ESS uses internal MIS, DSS data (summarized), along with external data (e.g., dynamic tax laws or emerging competition, etc.).
Applications:
- In staffing departments of organizations.
- Accounting or billing departments.
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