Types of Information System

Information system are used by organizations to collect, process and distribute the information. These systems uses communication technology and information to make use of it.

Main components of information systems are technology, information, procedures, management and users.

Information systems are designed according to the need of the organizations. These are categorized into many types, each having different functionality and uses.

Major types of information system are described here.

  1. Transaction processing system
  2. Decision support system
  3. Executive information system
  4. Management information system
  5. Enterprise resource planning and
  6. Expert systems.
  7. Online Analytical Processing (OLAP)

Transaction Processing System

The main purpose of Transaction Processing System to fulfill the basic needs of record keeping of an organization.

Example

  • Payroll System
  • Billing Systems
  • Purchasing System
  • Shipping of record

Its data is used for report generation. These can be monthly, quarterly or yearly reports or any on demand reports depending upon the needs of organization. Transaction Process System deals with routine transactions effectively.

Decision Support System

Decision Support System analyze the data which is used in decision making by the management of the organization. Data can be from internal or external sources. For example, if the management needs to asses the prices of a product, may use data from external sources i.e. market prices.

DSS comes in a way when the data is more complex and is required in decision making. It helps the decision-makers to in a process of decision making. It may also involve databases and spreadsheets, complex in nature, for creating models in difficult and important situations.

Executive Information System

Executive Information System also known as Executive Support System. It is developed for the Senior Management of the organization. It helps them to analyse the trends by viewing various reports including summaries; and then making the strategic decisions for the business.

These kinds of systems are easy to use and have many kind of reports specially graphical type reports. The reports are prepared from large sets of data collected from various sources.

For example, the management may require data of sales of the organizations that may be department wise or product wise ranging over a specific period of time. The system also include information about inventory, assets and revenue either collected or projected.

Management Information System

Management Information System is also used by the management but it differs from the Transaction Processing System (TPS) in a way that it provides summaries of routine nature to the management.

The different kinds of data including sales, purchase, production is consolidated in MIS. Usually, this data is collected from internal sources. Summaries are prepared from this data used by managers and decision makers. This system can also support the marketing and revenue departments to enhance the operational efficiency and tracking the progress of the organization.

types of information systems
types of information systems

Enterprise Resource Planning

Enterprise Resource Planning ERP is a system which revolves around the whole business process and has different integrated modules. Each module deals with different department. ERP systems are used by the multi-national organizations.

Expert System

The organizations use the expert systems to obtain suggestions as these systems acts like the experts and have ability to solve complex problems.

Expert Systems were firstly started in 1970s. It is composed of inference engine (it has logical set of rules which applied to knowledge base) and knowledge base (used to store structured and unstructured data — facts and rules).

The example of knowledge base systems is Expert System. These play important role in many organizations.

Online Analytical Processing

There are various Business Intelligence Systems working in the organizations. The technology behind these systems is OLAP. The logic behind using the Online Analytical Processing Systems is that they perform complex analytical calculations, make predictions, and provide business reporting.

OLAP is part of business intelligence and can answer multi dimensional queries in the field of computing. These systems have further categorized into Multidimensional OLAP (MOLAP), Relational OLAP (ROLAP), Hybrid OLAP (HOLAP) etc.

Read also: Data warehouse Vs. Database (Difference & Similarities)