Difference between Operational Systems and Informational Systems

Operational systems and informational systems are two different types of computer systems that are used in organizations to support different functions. While operational systems are designed to support the day-to-day operations of an organization, informational systems are designed to support decision-making and management activities.
Let's understand the difference between them in detail:

Operational Systems

Operational systems, commonly known as Online Transaction Processing (OLTP) systems, are crucial for managing the daily business transactions of an organization. They are designed to efficiently handle the vast and continuous flow of data generated by everyday business activities. The primary purpose of operational systems is to support the day-to-day operations of an organization, ensuring smooth and effective management of business processes.

Characteristics of Operational Systems

• Real-time Processing: Operational systems are characterized by their ability to process data in real-time, allowing for immediate updates and responses to transactional changes.
• Transaction Orientation: These systems are fundamentally transaction-oriented, designed to handle a large number of short, atomic operations that ensure data integrity in multi-access environments.
• Operational Efficiency: Optimized for performance and reliability, operational systems ensure that business operations such as order processing, payroll, and inventory management are conducted efficiently and without interruption.

Common Examples

• Transaction Processing Systems (TPS): Manage and record the daily routine transactions of a business.
• Enterprise Resource Planning (ERP): Integrates all facets of an operation, including development, manufacturing, sales, and marketing.
• Customer Relationship Management (CRM): Helps businesses manage and analyze customer interactions and data throughout the customer lifecycle.

Informational Systems

Informational systems, also known as Management Information Systems (MIS), are integral to an organization's framework, enhancing the synergy among people, processes, and technology. These systems are designed to support strategic planning, control, and decision-making functions. By collecting, compiling, and analyzing data, informational systems provide crucial insights that help managers make informed decisions, optimizing organizational performance and strategic direction.

Characteristics of Informational Systems

• Analytical Processing: These systems excel in analyzing large volumes of data to extract meaningful insights, essential for strategic planning and problem-solving.
• Data Warehousing: Informational systems often utilize data warehouses to store and manage data efficiently, making it readily available for analysis and reporting.
• Support for Business Intelligence: They provide the infrastructure for business intelligence tools that transform data into actionable intelligence, aiding in comprehensive organizational analysis.

Common Examples

• Decision Support Systems (DSS): Help managers make informed decisions by providing information, data analysis, and possible decision alternatives.
• Executive Information Systems (EIS): Tailored for senior managers, providing them with easy access to internal and external information relevant to strategic goals.
• Business Intelligence Systems: Analyze data from various activities within the organization to give detailed insights into the state of the business.

Difference Table

Importance of Integrating Both Systems

Integrating both operational and informational systems within an organization is crucial for several reasons:

• Enhanced Decision-Making: Real-time access to accurate operational data enables more informed, timely decisions.
• Improved Efficiency: Eliminates redundant processes and manual data transfers, reducing errors and saving time.
• Higher Data Quality: Ensures consistent, up-to-date data across systems for reliable analysis.
• Greater Agility: Accelerates response to market changes through rapid data-driven insights.
• Cost Efficiency: Initial integration costs are offset by long-term savings from streamlined operations and reduced errors.
• Comprehensive Analytics: Combines operational and analytical data for deeper insights and more accurate forecasting.

Integrating operational and informational systems not only optimizes business processes but also enhances the overall strategic capabilities of an organization, leading to better performance and competitive advantage.