There are many different types of Information System: Decision Support Systems, Knowledge Management Systems, Executive Support systems, Management Information System, Accounting Information Systems and Transaction Processing Systems to name a few.
In this blog, I will focus on Management Information Systems, Decision Support Systems, and Transaction Processing Systems. In the next blog, Knowledge Management Systems, Executive Support Systems and Accounting Information Systems will be discussed in detail.
1. Management Information Systems:
A management information system (MIS) provides information that organizations need to manage themselves efficiently and effectively. Management information systems are typically computer systems used for managing three primary components: technology, people (individuals, groups, or organizations), and data (information for decision making).
Why are they different to other information systems?
Well… Management Information Systems are used to analyze and facilitate strategic and operational activities. Many schools are organisations have an MIS department, just like they have an accounting department, a finance dept, marketing dept, etc.
Management information systems (MIS), produce fixed, regularly scheduled reports based on data extracted and summarized from the firm’s underlying transaction processing systems ( which will be discussed further on) to middle and operational level managers to identify and inform structured and semi-structured decision problems.
Management Information Systems have many advantages:
- Companies are able to highlight their strengths and weaknesses due to the presence of revenue reports, employees’ performance record etc. The identification of these aspects can help the company improve their business processes and operations.
- Information is an important asset for any company in the modern competitive world. The consumer buying trends and behaviours can be predicted by the analysis of sales and revenue reports from each operating region of the company.
- Giving an overall picture of the company and acting as a communication and planning tool.
2. Decision Support Systems:
A decision support system (DSS) is a computer-based information system that supports business or organizational decision-making activities. DSS’s serve the management, operations, and planning levels of an organization and help to make decisions, which may be rapidly changing and not easily specified in advance. Decision support systems can be either fully computerized, human or a combination of both.
Things that would be typically visible in a decision support system:
- inventories of information assets (including legacy and relational data sources, cubes, data warehouses, and data marts),
- comparative sales figures between one period and the next,
- projected revenue figures based on product sales assumptions.
3 fundamental components in a DSS are:
1. the database, 2. the model, 3. the user interface.
As well, DSS boast many benefits including:
- Improves personal efficiency
- Speed up the process of decision making
- Increases organizational control
- Encourages exploration and discovery on the part of the decision maker
- Speeds up problem solving in an organization
- Facilitates interpersonal communication
- Promotes learning or training
- Generates new evidence in support of a decision
- Creates a competitive advantage over competition
- Reveals new approaches to thinking about the problem space
- Helps automate managerial processes
- Create Innovative ideas to speed up the performance.
3. Transaction Processing Systems:
Transaction processing is a style of computing that divides work into individual, indivisible operations, called transactions. A transaction processing system (TPS) or transaction server is a software system, or software/hardware combination, that supports transaction processing.
Transaction processing systems also attempt to provide predictable response times to requests, although this is not as critical as for real-time systems. Rather than allowing the user to run arbitrary programs as time-sharing, transaction processing allows only predefined, structured transactions. Each transaction is usually short duration and the processing activity for each transaction is programmed in advance.
The following features are considered important in evaluating transaction processing systems.
Fast performance with a rapid response time is critical. Transaction processing systems are usually measured by the number of transactions they can process in a given period of time.
The system must be available during the time period when the users are entering transactions. Many organizations rely heavily on their TPS; a breakdown will disrupt operations or even stop the business.
The system must be able to handle hardware or software problems without corrupting data. Multiple users must be protected from attempting to change the same piece of data at the same time, for example two operators cannot sell the same seat on an airplane.
Ease of use
Often users of transaction processing systems are casual users. The system should be simple for them to understand, protect them from data-entry errors as much as possible, and allow them to easily correct their errors.
The system should be capable of growth at incremental costs, rather than requiring a complete replacement. It should be possible to add, replace, or update hardware and software components without shutting down the system.
Hope this has been helpful, and the next blog will follow on from this explaining Knowledge Management Systems, Executive Support Systems and Accounting Information Systems in detail. Thanks for reading 🙂