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8 Types of Business Information Systems

functional, constituency, information, information gathering, data, data gathering, business information systems, information systems,

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.

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Information Systems and Effective Management

systems, types systems used, evaluation of data, data, data gathering, data analysis, SISP, IT, IS, strategic information systems planning,

Information technology (IT) is a huge part of effective management that managers have to know.  They have to as they build and put into place new decisions every day.  The information systems (IS) are for the most part completely built from scratch.  The main purpose of strategic information systems planning (SISP) is to create implement new systems to use for the agency that the managers work for.  This is something that has to be worked from the top on down or it will never gain fruition.  There are complications to building these new systems, but if done correctly, it can be a godsend.

SISP Research and Implementation

Steven L. Alter did some research into which agencies have the most success with SISP through adapting to it correctly and optimally.  He has found that applications being created and used now are now built to support the managers who have to make decisions, instead of replacing them.  This is called decision support systems and are used to greatly improve managerial effectiveness.  The problem is that there is a restriction of knowledge as to what kinds of systems are used now.    This means that information systems are out there that the manager and their superiors have not built it themselves, so they don’t know what these systems do.  Don’t just focus on the technical aspect, focus on how the new system will work with the agency in question.

6 Types of Systems

The types of systems used are:

  1. Used to retrieve isolated data
  2. Uses mechanisms for ad hoc analysis of data
  3. Gathers aggregations specified beforehand in standard reports
  4. Can estimate consequences of all proposed decisions
  5. Can propose decisions based off of data gathered
  6. Can help to make strategic decisions based off of the data gathered

Examples of SISP Being Used

Some examples of how SISP is used are:

  • For retrieval of information only – shop floor IS
  • Retrieval and analysis – portfolio analysis system
  • Multiple data bases and analysis – sales IS
  • Eval of decisions using accounting models – source-and-application-of-funds budgeting
  • Eval of decisions using simulation models – marketing decision system
  • Proposing decisions – optimize raw materials usage
  • Making decisions – insurance renewal rate system

Questions to Ask Yourself

There is a huge range of approaches that can be taken here that would be helpful depending on what is needed for said company’s business model.  What do they do?  What needs to be fixed that they would bring this up?  What improvements are going to be implemented?  What do they want the company to strive towards?  What systems are they going to use in order to implement their changes?

Build the System

These are just some of the questions that have to be answered before the company goes forward.  If there’s no clear vision on what is going to be done SISP can be a complete failure instead of being a bonus.  Build small prototypes first of specific areas in order to find where the bugs are.  Then they can be fixed with little or any cost before the big implementation begins.  Just remember as the author points out, building an IS makes sense when it is clear that changes are needed in how decisions are made in the company.  That and everyone learns what the role is of computers are in their workplaces, and helps managers to make decisions dealing with administration and competitive strategies against other companies in their industry.