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Different types of Information System? Why are there different types of Information System? In the early days of computing, each time an information system was needed it was 'tailor made' - built as a one-off solution for a particular problem. However, it soon became apparent that many of the problems information systems set out to solve shared certain characteristics. Consequently, people attempted to try to build a single system that would solve a whole range of similar problems. However, they soon realized that in order to do this, it was first necessary to be able to define how and where the information system would be used and why it was needed. It was then that the search for a way to classify information systems accurately began. How do you identify the different types of information system in an organization? The different types of information system that can be found are identified through a process of classification. Classification is simply a method by which things can be categorized or classified together so that they can be treated as if they were a single unit. There is a long history of classification of things in the natural world such as plants or animals, however, Information systems are not part of the 'natural' world; they are created and acquired by man to deal with particular tasks and problems. The classification of information systems into different types is a useful technique for designing systems and discussing their application; it not however a fixed definition governed by some natural law. A 'type' or category of information system is simply a concept, an abstraction, which has been created as a way to simplify a complex problem through identifying areas of commonality between different things. One of the oldest and most widely used systems for classifying information systems is known as the pyramid model; this is described in more detail below. How many different kinds of Information System are there? As can be seen above, there is not a simple answer to this. Depending on how you create your classification, you can find almost any number of different types of information system. However, it is important to remember that different kinds of systems found in organizations exist to deal with the particular problems and tasks that are found in organizations. Consequently, most attempts to classify Information systems into different types rely on the way in which task and responsibilities are divided within an organization. As most organizations are hierarchical, the way in which the different classes of information systems are categorized tends to
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Different types of Information System?
Why are there different types of Information System?
In the early days of computing, each time an information system was needed it was 'tailor made' - built as a one-off solution for a particular problem. However, it soon became apparent that many of the problems information systems set out to solve shared certain characteristics. Consequently, people attempted to try to build a single system that would solve a whole range of similar problems. However, they soon realized that in order to do this, it was first necessary to be able to define how and where the information system would be used and why it was needed. It was then that the search for a way to classify information systems accurately began.
How do you identify the different types of information system in an organization?
The different types of information system that can be found are identified through a process of classification. Classification is simply a method by which things can be categorized or classified together so that they can be treated as if they were a single unit. There is a long history of classification of things in the natural world such as plants or animals, however, Information systems are not part of the 'natural' world; they are created and acquired by man to deal with particular tasks and problems. The classification of information systems into different types is a useful technique for designing systems and discussing their application; it not however a fixed definition governed by some natural law. A 'type' or category of information system is simply a concept, an abstraction, which has been created as a way to simplify a complex problem through identifying areas of commonality between different things. One of the oldest and most widely used systems for classifying information systems is known as the pyramid model; this is described in more detail below.
How many different kinds of Information System are there?
As can be seen above, there is not a simple answer to this. Depending on how you create your classification, you can find almost any number of different types of information system. However, it is important to remember that different kinds of systems found in organizations exist to deal with the particular problems and tasks that are found in organizations. Consequently, most attempts to classify Information systems into different types rely on the way in which task and responsibilities are divided within an organization. As most organizations are hierarchical, the way in which the different classes of information systems are categorized tends to follow the hierarchy. This is often described as "the pyramid model" because the way in which the systems are arranged mirrors the nature of the tasks found at various different levels in the organization.
For example, this is a three level pyramid model based on the type of decisions taken at different levels in the organization.
Three level pyramid model based on the type of decisions taken at different levels in the organization
Similarly, by changing our criteria to the differnt types of date / information / knowledge that are processed at different levels in the organization, we can create a five level model.
Five level pyramid model based on the processing requirement of different levels in the organization
What are the most common types of information system in an organization?
While there are several different versions of the pyramid model, the most common is probably a four level model based on the people who use the systems. Basing the classification on the people who use the information system means that many of the other characteristics such as the nature of the task and informational requirements, are taken into account more or less automatically.
Four level pyramid model based on the different levels of hierarchy in the organization
A comparison of different kinds of Information Systems
Using the four level pyramid model above, we can now compare how the information systems in our model differ from each other.
1. Transaction Processing Systems
What is a Transaction Processing System?
Transaction Processing System are operational-level systems at the bottom of the pyramid. They are usually operated directly by shop floor workers or front line staff, which provide the key data required to support the management of operations. This data is usually obtained through the automated or semi-automated tracking of low-level activities and basic transactions.
Functions of a TPS
TPS are ultimately little more than simple data processing systems.
Functions of a TPS in terms of data processing requirements
Inputs Processing Outputs
TransactionsEvents
ValidationSortingListingMergingUpdatingCalculation
ListsDetail reportsAction reportsSummary reports?
Some examples of TPS
o Payroll systems
o Order processing systems
o Reservation systems
o Stock control systems
o Systems for payments and funds transfers
The role of TPS
o Produce information for other systems
o Cross boundaries (internal and external)
o Used by operational personnel + supervisory levels
o Efficiency oriented.
2. Management Information Systems
What is a Management Information System?
For historical reasons, many of the different types of Information Systems found in commercial organizations are referred to as "Management Information Systems". However, within our pyramid model, Management Information Systems are management-level systems that are used by middle managers to help ensure the smooth running of the organization in the short to medium term. The highly structured information provided by these systems allows managers to evaluate an organization's performance by comparing current with previous outputs.
Functions of a MIS
MIS are built on the data provided by the TPS
Functions of a MIS in terms of data processing requirements
Inputs Processing Outputs
Internal TransactionsInternal FilesStructured data
SortingMergingSummarizing
Summary reportsAction reportsDetailed reports
Some examples of MIS
o Sales management systems
o Inventory control systems
o Budgeting systems
o Management Reporting Systems (MRS)
o Personnel (HRM) systems
The role of MIS
o Based on internal information flows
o Support relatively structured decisions
o Inflexible and have little analytical capacity
o Used by lower and middle managerial levels
o Deals with the past and present rather than the future
o Efficiency oriented?
3. Decision Support Systems
What is a Decision Support System?
A Decision Support System can be seen as a knowledge based system, used by senior managers, which facilitates the creation of knowledge and allow its integration into the organization. These systems are often used to analyze existing structured information and allow managers to project the potential effects of their decisions into the future. Such systems are usually interactive and are used to solve ill structured problems. They offer access to databases, analytical tools, allow "what if" simulations, and may support the exchange of information within the organization.
Functions of a DSS
DSS manipulate and build upon the information from a MIS and/or TPS to generate insights and new information.
Functions of a DSS in terms of data processing requirements
Inputs Processing Outputs
Internal TransactionsInternal FilesExternal Information?
ModellingSimulationAnalysisSummarizing
Summary reportsForecastsGraphs / Plots
Some examples of DSS
o Group Decision Support Systems (GDSS)
o Computer Supported Co-operative work (CSCW)
o Logistics systems
o Financial Planning systems
o Spreadsheet Models?
The role of DSS
o Support ill- structured or semi-structured decisions
o Have analytical and/or modelling capacity
o Used by more senior managerial levels
o Are concerned with predicting the future
o Are effectiveness oriented?
4. Executive Information Systems
What is an EIS?
Executive Information Systems are strategic-level information systems that are found at the top of the Pyramid. They help executives and senior managers analyze the environment in which the organization operates, to identify long-term trends, and to plan appropriate courses of action. The information in such systems is often weakly structured and comes from both internal and external sources. Executive Information System are designed to be operated directly by executives without the need for intermediaries and easily tailored to the preferences of the individual using them.
Functions of an EIS
EIS organizes and presents data and information from both external data sources and internal MIS or TPS in order to support and extend the inherent capabilities of senior executives.
Functions of a EIS in terms of data processing requirements
Inputs Processing Outputs
External DataInternal FilesPre-defined models
SummarizingSimulation"Drilling Down"
Summary reportsForecastsGraphs / Plots
Some examples of EIS
Executive Information Systems tend to be highly individualized and are often custom made for a particular client group; however, a number of off-the-shelf EIS packages do exist and many enterprise level systems offer a customizable EIS module.
The role of EIS
o Are concerned with ease of use
o Are concerned with predicting the future
o Are effectiveness oriented
o Are highly flexible
o Support unstructured decisions
o Use internal and external data sources
o Used only at the most senior management levels
The Role of Management Information Systems in Decision Making.
Management information systems combine hardware, software and network products in an integrated solution that provides managers with data in a format suitable for analysis, monitoring, decision-making and reporting. The system collects data, stores it in a database and makes it available to users over a secure network.
Information AccessManagers need rapid access to information to make decisions about strategic, financial, marketing and
operational issues. Companies collect vast amounts of information, including customer records, sales data,
market research, financial records, manufacturing and inventory data, and human resource records.
However, much of that information is held in separate departmental databases, making it difficult for
decision makers to access data quickly. A management information system simplifies and speeds up
information retrieval by storing data in a central location that is accessible via a network. The result is
decisions that are quicker and more accurate.
Data CollectionManagement information systems bring together data from inside and outside the organization. By setting
up a network that links a central database to retail outlets, distributors and members of a supply chain,
companies can collect sales and production data daily, or more frequently, and make decisions based on
the latest information.
CollaborationIn situations where decision-making involves groups, as well as individuals, management information
systems make it easy for teams to make collaborative decisions. In a project team, for example,
management information systems enable all members to access the same essential data, even if they are
working in different locations.
InterpretationManagement information systems help decision-makers understand the implications of their decisions. The
systems collate raw data into reports in a format that enables decision-makers to quickly identify patterns
and trends that would not have been obvious in the raw data. Decision-makers can also use management
information systems to understand the potential effect of change. A sales manager, for example, can make
predictions about the effect of a price change on sales by running simulations within the system and asking
a number of “what if the price was” questions.
PresentationThe reporting tools within management information systems enable decision-makers to tailor reports to the
information needs of other parties. If a decision requires approval by a senior executive, the decision-maker
can create a brief executive summary for review. If managers want to share the detailed findings of a report
with colleagues, they can create full reports and provide different levels of supplementary data.
CONCLUSION
The role of information in decision making cannot be overemphasized. Effective decision making demands accurate, timely and relevant information. MIS provides accurate and timely information necessary to facilitate the decision-making process and enable the organizations planning, control, and operational functions to be carried out effectively. MIS also plays the crucial role of providing a wide range of streamlined options from which decision-makers are able to make their preferred choices and this ensures that whatever choices are made by decision makers, the outcome, more often than not, becomes positive. This, as a matter of fact, is the reason why many decision makers tend to prefer using MIS tools when making tough business choices. MIS as renowned concept, having good decision choices guarantees viable decisions in our businesses.
