1.

An information system (IS) is a system composed of people and computers

that processes or interprets information. The term is also sometimes used in
more restricted senses to refer to only the software used to run a computerized
database or to refer to only a computer system.

IS (information system) is the collection of technical and human resources that provide
the storage, computing, distribution, and communication for the information required
by all or some part of an enterprise. A special form of IS is a management information
system (MIS), which provides information for managing an enterprise

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 different 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
Validation
Sorting Lists
Transactions Listing Detail reports
Events Merging Action reports
Updating Summary reports?
Calculation

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 Transactions Sorting Summary reports
Internal Files Merging Action reports
Structured data Summarizing Detailed 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
Modelling
Internal Transactions Summary reports
Simulation
Internal Files Forecasts
Analysis
External Information? Graphs / Plots
Summarizing

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 Data Summarizing Summary reports
Internal Files Simulation Forecasts
Pre-defined models "Drilling Down" Graphs / 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