The term information system is used to refer not only to the information and communication technology (ICT) an organization uses, but also to the way in which people interact with this technology in support of business processes. There are three major information systems which are discussed in this essay as follows:
Information systems differ in their business needs. Information systems also differ depending upon different levels in organization. Three major information systems are
- Transaction processing systems
- Management information systems
- Decision support systems
Categories of Information System
The information needs are different at different organizational levels. Accordingly the information can be categorized as: strategic information, managerial information and operational information.
- Strategic information is the information needed by top most management for decision making. The information systems that provide these kinds of information are known as Decision Support Systems. (David F.)
- Managerial information is the information required by the middle management. The information required at this level is used for making short term decisions and plans for the organization at the middle level.
- The daily or short term information needs of the organization such as attendance records of the employees are maintained by a transaction processing system. This kind of information is required at the operational level for carrying out the day-to-day operational activities. Due to its capabilities to provide information for processing transaction of the organization, the information system is known as Transaction Processing System or Data Processing System. (Stephen M.)
Transaction Processing Systems
TPS processes business transaction of the organization. This provides high speed and accurate processing of keeping records of basic operational processes. Transaction processing systems are programmed to follow routines functions of the organization which may include calculation, storage and retrieval of daily information.
Management Information Systems
These systems assist lower management in problem solving and making decisions. They use the results of transaction processing and some other information also. It is a set of information processing functions. It should handle queries as quickly as they arrive as middle management deals with short –term decision making and any delay in this may cause loss to the organization.
Decision Support Systems
These systems assist higher management to make long term decisions. These type of systems handle unstructured or semi structured decisions. A decision is considered unstructured if there are no clear procedures for making the decision and if not all the factors to be considered in the decision can be readily identified in advance.
These are not of recurring nature. Some recur infrequently or occur only once because long term decisions are usually taken for the time period of more than one year. A decision support system must very flexible. The user should be able to produce customized reports by giving particular data and format specific to particular situations. (Paul K.)
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