Introduction To Information System

Chapter 2: Types of Information Systems and Their Applications

Information has become one of the primary factors in business success. We’re living in the Information
Age, and those with the best, most current, most accurate information will win the day. Knowledge is
power, and data information is just another example of that power.
However, it’s not enough to have vast amounts of good information; businesses and organizations need to
have the best types of information systems to work with that information and produce the best outcomes.
That’s why, in today’s data-heavy world, organizations need a solid information system.
Tools such as laptops, databases, networks, and smartphones are examples of information systems. So
yes, as you read this notes, you’re employing an information system! Many people rely on various types
of information systems to communicate with friends and family, bank or shop online, or look up
information via a search engine.
Companies and organizations employ information systems to communicate and work with their customers
and suppliers, manage the organization, perform essential business operations, and roll out and maintain
marketing campaigns.

Information systems are designed to collect, process, store, and disseminate information. The objectives
of information systems are to provide reliable and updated information, automate operational processes,
and support decision-making activities. Information systems must be efficient and easy to execute because

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 Introduction To Information System
they process and store a large amount of data. These data are loaded, automatically or manually, on a
physical or digital medium and are used to produce information that is useful for the execution of a certain
activity or objective. Every company or organization, be it in the area of medicine, business, chemistry, or
social sciences, uses an information system.

Six Major Types of Information Systems

1. Transaction Processing System (TPS)
 Transaction Processing System are information system that processes data resulting from the
occurrences of business transactions
 Their objectives are to provide transaction in order to update records and generate reports i.e to
perform store keeping function
 The transaction is performed in two ways: Batching processing and Online transaction
processing.
 Example: Bill system, payroll system, Stock control system.
2. Office Automation System (OAS)
OAS consists of computers, communication-related technology, and the personnel assigned to
perform the official tasks. The OAS covers office transactions and supports official activity at
every level in the organization. The official activities are subdivided into managerial and clerical
activities.
Office automation systems include the following applications:
 Email: The email application also covers file attachments such as audio, video, and documents.
 Voice Mail: This application records and stores phone messages into the system’s memory and
can be retrieved anytime.
 Word Processing: Word processing covers the creation of documents, including memos,
reports, letters, and anything else that’s printable electronically. The created text can be
copied, edited, and stored via word processing commands, and checked for grammar and
spelling, line and word counting, and headers and footers.
3. Knowledge Work System (KWS)
The KWS is a specialized system that expedites knowledge creation and ensures that the
business's technical skills and knowledge are correctly applied. The Knowledge Work System aids
workers in creating and disseminating new information using graphics, communication, and
document management tools. Here are some examples of KWS:
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 Computer-Aided Design Systems (CAD): CAD systems automate design creation and
revision via computers and graphics software, especially in the manufacturing and tooling
processes.
 Financial Workstations: These systems pull and combine data from many different internal
and external sources, covering research reports, market data, and management data. Financial
workstations can rapidly analyze huge amounts of financial data and trading situations.
 Virtual Reality Systems: These systems take the CAD system to the next level, using interactive
graphics utilities to create realistic computer-generated simulations. VR systems are typically
found in scientific, educational, and business circles.
4. Management Information System (MIS)
 Management Information System is designed to take relatively raw data available through a
Transaction Processing System and convert them into a summarized and aggregated form for
the manager, usually in a report format. It reports tending to be used by middle management
and operational supervisors.
 Many different types of report are produced in MIS. Some of the reports are a summary report,
on-demand report, ad-hoc reports and an exception report.
 Example: Sales management systems, Human resource management system.

5. Decision Support System (DSS)

 Decision Support System is an interactive information system that provides information,
models and data manipulation tools to help in making the decision in a semi-structured and
unstructured situation.
 Decision Support System comprises tools and techniques to help in gathering relevant
information and analyze the options and alternatives, the end user is more involved in creating
DSS than an MIS.
 Example: Financial planning systems, Bank loan management systems.

6. Executive Support System (ESS)

 Experts systems include expertise in order to aid managers in diagnosing problems or in
problem-solving. These systems are based on the principles of artificial intelligence research.
 Experts Systems is a knowledge-based information system. It uses its knowledge about a
specify are to act as an expert consultant to users.

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 Introduction To Information System
 Knowledgebase and software modules are the components of an expert system. These modules
perform inference on the knowledge and offer answers to a user’s question

What Are the Main Applications of Information Technology?

 Information/Data Storage
Although companies need good information to create better goods and services, they must also
have a reliable, cost-effective system to store the information that allows rapid data access when
required. In addition, a sound information system helps businesses keep logs of essential activities
and store valuable assets such as communication records, revision histories, activity logs,
operational data, and other relevant documents.
By storing information in an organized manner, businesses understand why problems and
roadblocks occur and how to solve them.
 Rolling Out New Products and Services
Although there is an ever-increasing demand for new goods and services, any business that wants
to stay competitive needs information to make better decisions and consequently offer better
products. Information systems help analyze independent processes and organize the company's
work activities. So, an information system allows a business to better understand how it can design,
create, and sell services or products that people want.
 Simplified Decision Making
It’s challenging enough to make decisions, let alone consistently making the exact, right decisions.
There are no guarantees that an organization’s decisions will work. However, information systems
help take some of the pain out of the process by offering information rapidly and easily.
 Improving Employee Behaviors and Attitudes
Information systems can be effectively employed to improve communication between employers
and employees. An efficient information system empowers employees by making relevant
information more accessible, helping them become a part of the decision-making process. This
empowerment boosts motivation and increases commitment to the project or assignment.
These systems are not limited to this list, and there are other types of information systems such as
database management systems, learning management systems, and more.

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 Introduction To Information System
Application of Information System by Sector
 Communication. Information system applications allow rapid data sharing on a global scale.
 Education. Information systems help make remote learning easier (particularly useful during
pandemics) and make people more comfortable with tech advancements such as smartphones,
tablets, and other network devices.
 Employment. The advent of information systems has directly resulted in creating new positions
such as Data Analysis, Graphic Designer, Cyber Security and More
 Finance. Information systems make the transfer of funds more manageable and more secure.
 Healthcare. Thanks to information systems, healthcare providers can access vital medical records
faster.
 Security. Information systems make it easier to employ data safeguards to reduce the likelihood of
a data breach or malware.

Career Opportunities in Information Systems

Information systems offer a wide range of opportunities for professionals who are interested in technology
and business. Some of the most common jobs for information systems graduates include:

 Technical support specialist: A technical support specialist works directly with end-users,
assisting them with technical, hardware, and software issues. The primary focus of the role is on
adding value to an organization by employing information technology
 Information technology specialist: IT specialists typically work with computer-based information
systems. Some of their responsibilities might include designing, using, or maintaining technology
within an organization. Regardless of the position or employer, the primary focus of the role is on
adding value to an organization by employing information technology.
 Librarian: Librarians are responsible for organizing large amounts of physical and digital
information. They also help others navigate and research this information so that they can locate
the materials they need.
 Software engineer: Software engineers design, develop, and maintain software applications. They
work with other professionals to create software that meets the needs of their clients or
organization.
 Database administrator: Database administrators are responsible for managing and maintaining
databases. They ensure that data is secure, backed up, and easily accessible.

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 Business analyst: Business analysts work with organizations to identify areas where technology
can be used to improve business processes. They analyze data and provide recommendations to
help organizations achieve their goals.
 Information security analyst: Information security analysts are responsible for protecting an
organization's computer systems and networks from cyber attacks. They monitor systems for
security breaches and investigate security incidents.
 Web developer: Web developers design and develop websites. They work with other
professionals to create websites that meet the needs of their clients or organization.
 Data analyst: Data analysts collect, process, and perform statistical analyses on large datasets.
They use their findings to help organizations make informed decisions.
 Project manager: Project managers are responsible for overseeing projects from start to finish.
They ensure that projects are completed on time, within budget, and to the satisfaction of
stakeholders.

These are just a few examples of the many opportunities available to information systems graduates. If
you're interested in pursuing a career in this field, it's important to research the job opportunities that
could be available to you after graduation.

Information Security | Confidentiality

Confidentiality is the protection of information in the system so that an unauthorized person cannot access
it. This type of protection is most important in military and government organizations that need to keep
plans and capabilities secret from enemies. However, it can also be useful to businesses that need to
protect their proprietary trade secrets from competitors or prevent unauthorized persons from accessing
the company’s sensitive information (e.g., legal, personal, or medical information). Privacy issues have
gained an increasing amount of attention in the past few years, placing the importance of confidentiality
on protecting personal information maintained in automated systems by both government agencies and
private-sector organizations. Confidentiality must be well-defined, and procedures for maintaining
confidentiality must be carefully implemented. A crucial aspect of confidentiality is user identification
and authentication. Positive identification of each system user is essential in order to ensure the
effectiveness of policies that specify who is allowed access to which data items.

Threats to Confidentiality: Confidentiality can be compromised in several ways. The following are
some of the commonly encountered threats to information confidentiality –

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 Hackers
 Masqueraders
 Unauthorized user activity
 Unprotected downloaded files
 Local area networks (LANs)
 Trojan Horses
Confidentiality Models: Confidentiality models are used to describe what actions must be taken to
ensure the confidentiality of information. These models can specify how security tools are used to achieve
the desired level of confidentiality. The most commonly used model for describing the enforcement of
confidentiality is the Bell-LaPadula model.

In this model the relationship between objects (i.e, the files, records, programs and equipment that contain
or receive information) and subjects (i.e, the person, processes, or devices that cause the information to
flow between the objects) are described in terms of the subject’s assigned level of access or privilege and
the object’s level of sensitivity. In military terms, these would be described as the security clearance of
the subject and the security classification of the object.
Another type of model that is commonly used is Access control model.

It organizes the system into objects (i.e, resources being acted on), subjects (i.e, the person or program
doing the action), and operations (i.e, the process of interaction).
A set of rules specifies which operation can be performed on an object by which subject.

Types of Confidentiality :
In Information Security, there are several types of confidentiality:

 Data confidentiality: refers to the protection of data stored in computer systems and networks
from unauthorized access, use, disclosure, or modification. This is achieved through various
methods, such as encryption and access controls.
 Network confidentiality: refers to the protection of information transmitted over computer
networks from unauthorized access, interception, or tampering. This is achieved through
encryption and secure protocols such as SSL/TLS.

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 End-to-end confidentiality: refers to the protection of information transmitted between two
endpoints, such as between a client and a server, from unauthorized access or tampering. This is
achieved through encryption and secure protocols.
 Application confidentiality: refers to the protection of sensitive information processed and stored
by software applications from unauthorized access, use, or modification. This is achieved through
user authentication, access controls, and encryption of data stored in the application.
 Disk and file confidentiality: refers to the protection of data stored on physical storage devices,
such as hard drives, from unauthorized access or theft. This is achieved through encryption, secure
storage facilities, and access controls.
 Cloud
Overall, the goal of confidentiality in Information Security is to protect sensitive and private information
from unauthorized access, use, or modification and to ensure that only authorized individuals have access
to confidential information.
Data integrity is the overall accuracy, completeness, and consistency of data.
Uses of Confidentiality:
In the field of information security, confidentiality is used to protect sensitive data and information from
unauthorized access and disclosure. Some common uses include:

 Encryption: Encrypting sensitive data helps to protect it from unauthorized access and disclosure.
 Access control: Confidentiality can be maintained by controlling who has access to sensitive
information and limiting access to only those who need it.
 Data masking: Data masking is a technique used to obscure sensitive information, such as credit
card numbers or social security numbers, to prevent unauthorized access.
 Virtual private networks (VPNs): VPNs allow users to securely connect to a network over the
internet and protect the confidentiality of their data in transit.
 Secure file transfer protocols (SFTPs): SFTPs are used to transfer sensitive data securely over
the internet, protecting its confidentiality in transit.
 Two-factor authentication: Two-factor authentication helps to ensure that only authorized users
have access to sensitive information by requiring a second form of authentication, such as a
fingerprint or a one-time code.
 Data loss prevention (DLP): DLP is a security measure used to prevent sensitive data from being
leaked or lost. It monitors and controls the flow of sensitive data, protecting its confidentiality.
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Issues of Confidentiality:
Confidentiality in information security can be challenging to maintain, and there are several issues that
can arise, including:

 Insider threats: Employees and contractors who have access to sensitive information can pose a
threat to confidentiality if they intentionally or accidentally disclose it.
 Cyberattacks: Hackers and cybercriminals can exploit vulnerabilities in systems and networks to
access and steal confidential information.
 Social engineering: Social engineers use tactics like phishing and pretexting to trick individuals
into revealing sensitive information, compromising its confidentiality.
 Human error: Confidential information can be accidentally disclosed through human error, such
as sending an email to the wrong recipient or leaving sensitive information in plain sight.
 Technical failures: Technical failures, such as hardware failures or data breaches, can result in
the loss or exposure of confidential information.
 Inadequate security measures: Inadequate security measures, such as weak passwords or
outdated encryption algorithms, can make it easier for unauthorized parties to access confidential
information.
 Legal and regulatory compliance: Confidentiality can be impacted by legal and regulatory
requirements, such as data protection laws, that may require the disclosure of sensitive information
in certain circumstances.

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 Introduction To Information System

Budgeting in Information System

Budgeting is a crucial process for any organization, including those that rely on information systems. It
involves preparing and overseeing a financial document that estimates income and expenses for a period.
Budgeting is a key skill for ensuring organizations and teams have the resources to execute initiatives and
reach goals.

In the context of information systems, budgeting can help IT leaders use the budgeting process as a tool to
aid in communication and planning. A well-designed IT budget and budget process can help local
governments run more efficiently, provide responsive services to their citizens, and better manage their
assets.

Budgeting can also help IT executives identify which initiatives will support their organization’s broad
strategic objectives without negatively impacting its bottom line.

In summary, budgeting is an essential process that can help organizations allocate resources effectively
and achieve their goals.
Budgeting for an accounting information system is important because:
It helps identify operational costs that need cutting, projects that require more capital, and budgets
that need finalizing for the following year.
It provides benchmarks against which to compare actual results and develop corrective measures.
It gives managers “preapproval” for execution of spending plans.
It allows managers to provide forward-looking guidance to investors and creditors.
It is necessary to persuade banks and other lenders to extend credit.
In addition, FMIS solutions can significantly improve the efficiency and equity of government
operations, and offer a great potential for increasing participation, transparency and accountability.

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