This article is based on Information Systems and the its various types.
"Types of Information System" or "What is an Information System?" is common question asked in University Exams. Sometimes they ask to explain Management Information System in more detail.
An information system is a set of interrelated components that collect, manipulate and disseminate data and information and provide feedback to meet an objective. It can be also defined as to collect, process, store and distribute information within and outside the organization in order to improve organizational effectiveness and efficiency. A well designed and developed information system helps an organization in managing its operations, interacting with its customers and suppliers and competing in the marketplace.
The basic components of Information System are
(1) Input - which is the activity of gathering and capturing raw data.
(2) Processing - which includes converting or transferring data into useful outputs.
(3) Output - which is production of useful information, usually in the form of documents and reports.
(4) Feedback - It is the output that is used to make changes to input or processing activities.
The different types of information systems are-
- Transaction Processing System
- Enterprise Resource Planning
- Management Information System
- Decision Support System
- Executive's Information System
A) Transaction Processing System (TPS) -
It is an information processing system for business transactions involving the collection, modification and retrieval of all transaction data.
There are two types of Transaction Processing System -
(1) Processing in a batch-Transactions may be collected and processed as in batch processing. Transactions may be collected and later updated as a batch when it's convenient or economical to process them.
(2) Processing in real time - This is the immediate processing of data. It provides instant confirmation of transaction. It may involve a large number of users who are simultaneously performing transactions which change data.
TPS is used in systems with highly structured decisions and it is used at operational level. Some features of TPS are fast performance, ease of use, continuous availability, data integrity, modular growth, etc. The limitations of TPS are that it cannot provide an abstract view, is not suitable for decision making and cannot maintain historical information.
B) Enterprise Resource Planning (ERP) -
It is a software and system used to plan and manage all the care supply chain, manufacturing, services, financial and other processes of an organization.
It has a typical three tier architecture which includes
(1) Data Tier
(2) Application Tier
(3) Web Tier
ERP is an integrated system which operates in or near real time. It has common database that supports all the applications with a consistent look and feel across modules. It improves efficiency and productivity and reduce cost. The limitations are that it is functional at operational level and it is not suitable for decision making.
C) Management Information System (MIS)-
It is an information system used for decision making, and for the coordination control, analysis and visualization of information in an organization. The study of the management information system involves, people, processes and technology in an organizational context.
MIS is useful because it supports multi-dimensional analysis, OLAP operations and supports decision making. It also maintains the historical information. However, MIS cannot provide alternate solutions, cannot support what if analysis and cannot perform predictive analysis.
D) Decision Support System (DSS) -
It is a computerized program used to support determinations, judgements and course of actions in an organization or a business. It is used at tactical and strategic management level and takes input from operational systems, external sources and MIS. It has four fundamental components -
(1) User Interface
(2) Database
(3) Knowledge
(4) DSS Model
It is highly beneficial as it allows what-if analysis and performs predictive analysis which is absent in the previous systems. The limitations of DSS are that it requires experience and expertise to select the appropriate DSS, it doesn't emphasize much on data visualization, and user's need to have technical background.
It is also called as Executive's Support System and is considered to be a specialized form of DSS. EIS facilitates and supports senior executive information and decision-making needs. It provides easy access to internal and external information relevant to organizational goals. It has strong reporting and drill down capabilities.
The components of EIS are
(1) Hardware
(2) Software
(3) User Interface
(4) Communication Network
The advantages of EIS are that it is easy to use for non-technical users, can distinguish between vital and rarely used data and can track critical activities. Information overload, high implementation cost, not effective for small organizations are some limitations of Executive Information System.
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