An information system (IS) is any combination of information technology and people's activities

using that technology to support operations, management, and decision-making. In a very broad
sense, the term information system is frequently used to refer to the interaction between people,
algorithmic processes, data and technology. In this sense, the term is used to refer not only to the
information and communication technology (ICT) an organization uses, but also to the way in which
people interact with this technology in support of business processes.

Information systems differ in their business needs. Also depending upon different levels in
organization information systems differ. Three major information systems are

1. Transaction processing systems

2. Management information systems
3. Decision support systems

Figure 1.2 shows relation of information system to the levels of organization. The
information needs are different at different organizational levels. Accordingly the information
can be categorized as: strategic information, managerial information and operational
information.

Strategic information is the information needed by top most management for decision
making. For example the trends in revenues earned by the organization are required by the
top management for setting the policies of the organization. This information is not required
by the lower levels in the organization. The information systems that provide these kinds of
information are known as Decision Support Systems.

Figure 1.2 - Relation of information systems to levels of organization

The second category of information required by the middle management is known as

managerial information. The information required at this level is used for making short term
decisions and plans for the organization. Information like sales analysis for the past quarter or
yearly production details etc. fall under this category. Management information system (MIS)
caters to such information needs of the organization. Due to its capabilities to fulfill the
managerial information needs of the organization, Management Information Systems have
become a necessity for all big organizations. And due to its vastness, most of the big
organizations have separate MIS departments to look into the related issues and proper
functioning of the system.

The third category of information is relating to the daily or short term information needs of
the organization such as attendance records of the employees. This kind of information is
required at the operational level for carrying out the day-to-day operational activities. Due to
its capabilities to provide information for processing transaction of the organization, the
information system is known as Transaction Processing System or Data Processing System.
Some examples of information provided by such systems areprocessing of orders, posting of
entries in bank, evaluating overdue purchaser orders etc.

Transaction Processing Systems

TPS processes business transaction of the organization. Transaction can be any activity of the
organization. Transactions differ from organization to organization. For example, take a
railway reservation system. Booking, canceling, etc are all transactions. Any query made to it
is a transaction. However, there are some transactions, which are common to almost all
organizations. Like employee new employee, maintaining their leave status, maintaining
employees accounts, etc.

This provides high speed and accurate processing of record keeping of basic operational
processes. These include calculation, storage and retrieval.

Transaction processing systems provide speed and accuracy, and can be programmed to
follow routines functions of the organization.

Management Information Systems

These systems assist lower management in problem solving and making decisions. They use
the results of transaction processing and some other information also. It is a set of
information processing functions. It should handle queries as quickly as they arrive. An
important element of MIS is database.

A database is a non-redundant collection of interrelated data items that can be processed

through application programs and available to many users.

Decision Support Systems

These systems assist higher management to make long term decisions. These type of systems
handle unstructured or semi structured decisions. A decision is considered unstructured if
there are no clear procedures for making the decision and if not all the factors to be
considered in the decision can be readily identified in advance.
These are not of recurring nature. Some recur infrequently or occur only once. A decision
support system must very flexible. The user should be able to produce customized reports by
giving particular data and format specific to particular situations.

Summary of Information Systems

Catagories of Information System Characteristices
Transaction Processing System Substitutes computer-based processing for manual
procedures.

Deals with well-structured processes. Includes

record keeping applications.

Management information system Provides input to be used in the managerial

decision process. Deals with supporting well
structured decision situations. Typical
information requirements can be anticipated.

Decision support system Provides information to managers who must make

judgements about particular situations. Supports
decision-makers in situations that are not well
structured.

Computer Software
Computer software is defined as a set of programs and procedures that are intended to perform
some tasks on a computer system. A software program is a set of instructions that are aimed at
changing the state of computer hardware. At the lowest level software is in a form of an assembly
language, a set of instructions in a machine-understandable form. At the highest level, software is in
a form of high-level languages, which are compiled or interpreted into machine language code.

Major Types of Software

Computer software systems are classified into three main types, namely, system software,
programming software and application software. System software is comprised of device drivers,
operating system, server and other such software components, which help the programmer abstract
away from the memory and hardware features of the system. Programming software assists the
programmer in writing programs by providing him/her with tools such as editors, compilers, linkers,
debuggers and more. Application software, one of the most important types of software, is used to
achieve certain specific tasks.

What is Application Software?

Application software utilizes the capacities of a computer directly to a dedicated task. Application
software is able to manipulate text, numbers and graphics. It can be in the form of software focused
on a certain single task like word processing, spreadsheet or playing of audio and video files.
Different Types of Application Software

Word Processing Software: This software enables the users to create and edit documents. The most
popular examples of this type of software are MS-Word, WordPad, Notepad and some other text
editors.

Database Software: Database is a structured collection of data. A computer database relies on

database software to organize the data and enable the database users to achieve database
operations. Database software allows the users to store and retrieve data from databases. Examples
are Oracle, MSAccess, etc.

Spreadsheet Software: Excel, Lotus 1-2-3 and Apple Numbers are some examples of spreadsheet
software. Spreadsheet software allows users to perform calculations. They simulate paper
worksheets by displaying multiple cells that make up a grid.

Multimedia Software: They allow the users to create and play audio and video media. They are
capable of playing media files. Audio converters, players, burners, video encoders and decoders are
some forms of multimedia software. Examples of this type of software include Real Player and Media
Player.

Presentation Software: The software that is used to display information in the form of a slide show
is known as presentation software. This type of software includes three functions, namely, editing
that allows insertion and formatting of text, methods to include graphics in the text and a
functionality of executing the slide shows. Microsoft PowerPoint is the best example of presentation
software.

Examples of Application Software

Enterprise Software: It deals with the needs of organization processes and data flow. The customer
relationship management or the financial processes in an organization are carried out by means of
enterprise software.

Information Worker Software: Individual projects within a department and individual needs of
creation and management of information are handled by information worker software.
Documentation tools, resource management tools and personal management systems fall under the
category of this form of application software.

Educational Software: It has the capabilities of running tests and tracking progress. It also has the
capabilities of collaborative software. It is often used in teaching and self-learning.

Simulation Software: Used to simulate physical or abstract systems, simulation software finds
applications in both, research and entertainment. Flight simulators and scientific simulators find a
place in the list of simulation software.
Content Access Software: It is used to access content without editing. The common examples of
content access software are web browsers and media players.

Thus we see that application software have made it possible for us users to interact with the
computer systems. Application software has served as a boon in harnessing the computing power in
the accomplishment of certain important individual and organizational tasks.