Conceptually, information systems in the real world can be classified in several different ways. For example, several types of information systems can be classified conceptually as either operations or management information systems.
(i) Operations Support Systems
Information systems have always been needed to process data generated by, and used in, business operations. Such operations support systems produce a variety of information products for internal and external use. However, they do not emphasize producing the specific information products that can best be sued by managers. Further processing by management information systems is usually required. The role of a business firm’s operations support systems is to efficiently process business transactions, control industrial processes, support enterprise communications and collaboration, and update corporate databases.
(ii) Transaction Processing Systems
Operations support systems include the major category of transaction processing systems (TPS). Transaction processing systems record and process data resulting fro business transactions. Typically examples are information systems that process sales, purchases, and inventory changes. The results of such processing are sued to update customer, inventory, and other organizational databases. These databases then provide the data resources that can be processed and used by management information systems, decision support systems, and executive information systems.
Transaction processing systems process transactions in two basic ways. In batch processing, transactions data is accumulated over a period of time and processed periodically. In real-time (or online) processing, data is processed immediately after a transaction occurs. For example, point of sale (POS) systems at retail stores may use electronic cash register terminals to capture and transmit sales data over telecommunication links to regional computer centers for immediate (real-time) or nightly (batch) processing.
(iii) Process Control Systems
Operation support systems also make routine decisions that control operational processes. Examples are automatic inventory reorder decisions and production control decisions. This includes a category of information systems called process control systems, in which decisions adjusting a physical production process are automatically made by computers. For example, a petroleum refiner uses electronic sensors linked to computers to continually monitor chemical processes. The computers monitor a chemical process, capture and process data detected by sensors, and make instant (real-time) adjustments to appropriate refinery processes.
(iv) Enterprise Collaboration Systems
Enterprise collaboration systems are information systems that use a variety of information technologies to help people work together. Enterprise collaboration systems help us collaborate to communicate ides, share resources, and coordinate our cooperative work efforts as members of the many formal and informal process and project teams and other workgroups that are a vital part of today’s organizations. Thus, the goal of enterprise collaboration systems is to use information technology to enhance the productivity and creativity of teams and workgroups in the modern business enterprise.
(v) Management Support Systems
When information systems focus on providing information and support for effective decision making by managers, they are called management support systems.
Management Information Systems
Management information systems (MIS) are the most common form of management support systems. They provide managerial end users with information products that support much of their day-to-day decision-making needs. Management information systems provide a variety of reports and displays to management. The contents of these information products are specified in advance by managers so that they contain information that managers need. Management information systems retrieve information about internal operations from database that have been updated by transaction processing systems. They also obtain data about the business environment from external source.
Information products provided to managers include displays and reports that can be furnished (1) on demand, (2) periodically, according to a predetermined schedule.
(a) Decision Support Systems
Decision support systems (DSS) are a natural progression from information reporting systems and transaction processing systems. Decision support systems are interactive, computer-based information systems that use decision models and specialized database to assist the decision making process of managerial end users.
(b) Executive Information Systems
Executive information systems (EIS) are management information systems tailored to the strategic information needs of top management. Top executives get the information they need from many sources, including letters, memos, periodicals, and reports produced manually as well as by computer systems. Other sources of executive information are meetings, telephone calls, and social activities. Thus, much of a top executive’s information comes from non-computer services. Computer generated information ahs not played a primary role in meeting many top executives’ information needs.
Other classifications of Information Systems
(i) Expert Systems
An expert system is a knowledge-based information systems; that is, it uses its knowledge about a specific area to act as an expert consultant to users. The components of an expert system are a knowledge base and software modules that perform inferences on the knowledge and offer answers to a user’s questions. Expert systems are being used in many different fields, including medicine, engineering, the physical sciences, and business. For example, expert systems now help diagnose illnesses, search for minerals, analyze compounds, recommend repairs, and do financial planning. Expert systems can support either operations or management activities.
(ii) Knowledge Management Systems
Knowledge Management systems (KMS), Workers create, organize, and share important business knowledge wherever and whenever it is needed. For example, many knowledge management systems rely on Internet and intranet Web sites, knowledge bases, and discussion forums as key technologies for gathering, storing, and disseminating business knowledge. In this way, knowledge management systems facilitate organization learning and knowledge creation and dissemination within the business enterprise.
(iii) Strategic Information Systems
The strategic role of information systems involves using information technology to develop products, services, and capabilities that give a company strategic advantages over the competitive forces it faces in the global marketplace. This creates strategic information system, information systems that support or shape the competitive position and strategies of an enterprise. So a strategic information system can be any kind of information systems (TPS, MIS, DSS, etc.) that helps an organization gain a competitive advantage, reduce a competitive disadvantage, or meet other strategic enterprise objectives.
(iv) Business Information Systems
As a future managerial end user, it is important for you to realize that information systems directly support both operations and management activities in the business functions of accounting, finance, human resource management, marketing, and operations management. Such business information systems are needed by all business functions.
For example, marketing managers need information about sales performance and trends provided by marketing information systems. Financial managers need information concerning financing costs and investment returns provided by financial information systems.
(v) Integrated Information Systems
It is also important to realize that information systems in the real world are typically integrated combinations of several types of information systems we have just mentioned. That’s because conceptual classification of information systems are designed to emphasize the many different roles of information systems. In practice, these roles are integrated into composite or cross-functional information systems that provide a variety of functions. Thus, most information systems are designed to produce information and support decision making for various levels of management and business functions, as well as do record keeping and transaction processing systems.