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Why All the Different Information Systems?

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This all started back in the day.  Someone would need a system made specifically for them to handle one problem.  Soon enough that it was discovered that different problems needed similar solutions, but not always in the same manner of getting them.  This is where defining of the information systems began and why it is still needed.   When the company in question decides that they need to upgrade, they have to go through a process in order to find the right applications and hardware to handle their data.  Classification comes to play here, so that categorizing information can be completed correctly.  This will help to make the data one unit instead of many.

How Do You Identify Different Types of Systems?

There is no simple answer to the question.  Every company builds an information system (IS) that is tailored to their specific needs.  There are many different types of IS that are used in some manner or another.  Classifying IS relies on how tasks are performed and responsibilities are divided in the agency.  This becomes a pyramid model as most companies are hierarchical, so classes of IS are categorized following the hierarchy going down.

To compare different information systems:

  1. Transaction Processing Systems (TPS)– These are operational level systems.  They are used by shop floor workers and front line staff.  Data is gained here through tracking of low-level activities and basic transactions.  They function as simple data processing systems only.  This is the system that produces information for other systems to use.  They are used internally and externally, are used by operational personnel and supervisors and are focused on efficiency.  Examples:  Payroll, Order processing, Reservations, Payments and Funds Transfers.
  2. Management Information Systems (MIS) – Management level used by middle managers. This system ensures smooth running of the company for short to medium terms.  Information is given out highly structured and helps managers to evaluate the company’s performance through comparison of outputs.  MIS is built on data given by TPS.  They are based on internal information flow, support structured decisions, but are inflexible with not much analytical ability.  Examples:  Sales Management, Inventory control, Budgeting, Management Reporting, and Personnel.
  3. Decision Support Systems (DSS) – Knowledge based system used by senior managers. They analyze existing structured information, allowing managers to estimate any potential effects on decisions they are thinking of implementing.  These systems are interactive and are used to solve problems.  They can access databases, offer analytical tools, allow simulations to be completed, and can support exchanges of information in the company.  This system can alter and build solutions provided by MIS and TPS, that can create insights plus new information to go off on.  DSS helps to support badly or semi-structured decisions already being built, and have analytical and modeling capacities.  Examples:  Group Decision Support Systems (GDSS), Computer Supported Co-operative work (CSCW), Logistics, and Financial Planning.
  4. Executive Information Systems (EIS) – Strategic level used by executives and senior managers. These systems analyze environments that the company works in, find long-term trends, and plan courses of action.  The information gathered is gathered from internal and external sources, and is weakly structured.  These systems are designed to be able to be used directly by the executives and are user friendly with the ability to be customized to whomever is using it.  EIS gathers and presents data from the MIS or TPS so senior management and executives can see what is going on a make decisions based off what they see.  The people who use this want ease of use and being able to predict what will happen to the company in the future.  It has to be effective, flexible, and support unstructured decisions.  Examples:  There are none.  These systems are tailored to individual wants of the user, in other words are custom made.  There are off the shelf packages that can be customized too.

The Importance of Planning

There is no easy way to explain why there are so many different types of information systems.  Every company out there is not the same, or runs their agency in the same manner as others.  This is why modifications are made to the systems in order for them to work specifically with what said company uses and the data they keep.  Also every level of the agency uses different systems.  Not everyone has to have a need to know of everything going on.  It is better to keep it at the level that the systems are going to be used at the most.  This is why planning for upgrades is so important.  If the wrong system is used, or the wrong programs…

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8 Types of Business Information Systems

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When upgrading what type of business information system you use at your company, everything has to be taken into account.  As the saying goes, no stone goes unturned.  If something is ignored or overlooked, it could potentially ruin the entire upgrade.  No system is the same and one system won’t provide all the information for one agency.

What Are The Different Systems?

There will always be a collection of systems in place to take care of different actions.  The different systems can be called either functional or constituency.  Functional perspectives look at systems by the business function that they perform.  Constituency perspectives look at systems through looking at the organization that they serve.

The four main information systems serving functional systems:

  1. Sales and Marketing –  They can improve how the company monitors sales transactions, can analyze sales trends and effectiveness of marketing campaigns.
  2. Manufacturing and Production – It provides information about numbers of items available in inventory so that they can build more product without interruption.
  3. Finance and Accounting – Provides accounts receivable system to track and store customer data.
  4. Human Resources – Maintains data on company data supporting HR functions.

The four categories of constituency are:

  1. Transaction Processing Systems (TPS) – Basic systems serving at the operation level of companies. They record daily routine transactions needed to conduct business like sales receipts.
  2. Management Information Systems (MIS) – Support middle managers’ interests. Support through giving historical performance information to perform decision making actions at the management level.  MIS and TPS data work together to build reports of basic operations.
  3. Decision Support Systems (DSS) – The business intelligence system. Helps managers with unique, fast changing and not easily found decisions that have to be made.  For example, they might be used to help the manager to develop a bid on contracts.
  4. Executive Support Systems (ESS) – Used by senior managers to find answers to strategic issues and long-term trends in both the company and their environment. This type of system pools data from both internal and external sources, consolidating the data found into a form that is easy to use.

Integration and Implementation

In order for these systems to work correctly it is good to use them with others.  For example, TPS is a major source of data for other systems while ESS is a recipient of data from external sources and lower systems.  They all work together interdependently in some manner or another.  But as it is, most businesses are starting to use new technologies that they create themselves.  This better combines information from all the different systems mentioned beforehand, therefore making the said company more competitive.