Different Information Systems in Business

Information systems refer to the way in which information is gathered, customized, analyzed, shared and reported. Each information systems are invented to support these requirements of business to enable managers to take sound decisions to achieve business objectives and goals.   They often  overlaps each other with respect to functions they provide like gathering, comparing, analyzing, integrating different software applications and reporting. Each kind of information system supports this by varying degree of effectiveness. They all require costs, time, training to use hardware/software and changes to be adopted, to implement the system.

1. Executive Information Systems (EIS)

Executive information system supports the top level management in taking strategic business decisions by providing information to executives. Executives can directly extract information from database of the EIS without any need to being reported. It gathers both internal and external information to support executives in achieving strategic objectives and goals.

The features of good executive information system is its usability by using WYSIWYG (what you see is what you get) interface and functionality (What manager requires the software to do) to allow non-computer expert executives to use it easily. EIS software enables executives to compare, analyze trends and reporting (to lower level) of important information by providing real time information to identify and react to potential opportunities and threats so that strategic decision can be taken on timely basis.

2. Management Information Systems (MIS)

Management information systems is a part of internal control system. It is a traditionally used system. It captures all the information relevant for managers at all level (strategic, tactical and operational) in the business organization to take strategic and operational decisions for planning and control like budgeting and variance analysis. It facilitates information to be provided in customized way that it helps managers to take decisions with in the bounds of the authority or controllability.

MIS should be flexible to satisfy different informational requirements according to situations and levels across whole business. Data have to be manually organized in appropriate formats.  Management accountant is responsible to communicate information in the form of report and memos. It does not provides real time information, this is a drawback of this system as information may be became out of date until they are reported to managers.

Read More:

3. Decision Support Systems (DSS)

Decision support systems helps managers to take decisions regarding planning and operational activities. It helps in doing so by allowing users to compile information from input of   raw data and personal knowledge easily and rapidly which would otherwise be difficult to take decisions using bulk of data. It allows data to be transformed from one format to another. Eg. graphs and charts. It may or may not suggest solutions as per the sophistication of the DSS implemented. It help in identify trends (sales and profits growth or decline) by using raw figures for each year by  comparing, analyzing, using statistical formulas by times series analysis and scatter graph diagram. It allows many users to work on complex issue by allowing sharing and editing of information from different locations.

Read More:

4. Enterprise Resource Planning (ERP)

Enterprise Resource Planning is relatively advanced form of information system. It integrates all  internal and external information relevant to the business under one roof. It allows different departments like sales, purchase, marketing and finance to make use of the central database by the use of networking. It integrates different application to make use of the database, so there is no need to keep separate data for each departments. One department can use the work of others to avoid repetition. It provides facilities to compare, transform and analyze data and report information to facilitate decision making for effective allocation of resources. It gives real time information to users. Unlike management information system which needs to be updated at frequent intervals. It also help manage relationship with external stakeholders like supplier by giving access to the information relevant to them at remote locations by the way of access through internet.

Read More:

5. Expert System (ES)

Expert system allows businesses to take advantage of the knowledge of experts within or outside the organization which cannot be transferred to other employees easily. Experts systems are suitable for repetitive activities for which expert knowledge is needed. It is more sophisticated than feature like filters you may have encountered in general applications which uses algorithms to provide simple solutions. expert systems are more complex software design to provide solution based on  rules already defined into the system which otherwise require human judgment.so that they can be performed with reasonable degree of accuracy.

Example of expert system used in banking is mortgage experts system. It allows bankers to evaluate the credit worthiness of potential borrowers based on some predefined criteria without approaching to experts each time. This saves cost and increase responsiveness to clients.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.