Introduction
In the modern world, the majority of organizations make use of the information systems to attain information necessary for effectively improving operations in the organization and accomplishing the tasks set aside in the organization. In an organization, an information system attains the data by collecting it, storing it, and processing the data to provide accurate and substantial information. Information systems do not necessarily require to be computerized but as the modern world dictates, the majority of the information systems depend on computers, which are more efficient than manual systems.
Information systems are normally grouped according to the tasks they are supposed to accomplish. Generally, there are four types of information systems depending on the organizational level they operate in. These four general categories are discussed in the section below.
Categories of information systems
Transaction processing systems
In the context of information systems, a transaction is defined as the process of exchange between different groups of which, it is recorded and electronically stored in a computer. A good example of a transaction processing system is ATM cash withdrawal. The majority of the operations in an organization involve the use of transactions.
In these transactions, a transaction processing system functions by dictating the means of collecting data, processing it, storing it, modifying it, displaying it, and even canceling the transaction. The databases are used to store the data attained by the transaction processing systems. The majority of the transaction processing systems can accommodate numerous transactions simultaneously. The stored data in the databases by the Transaction processing systems are used in the production of periodically scheduled reports such as monthly bills (Parsons & Oja, 2010, p. 559).
Management information systems
The management information system is a type of information system that makes use of the data attained by the transaction processing system to produce reports that are useful in the decision-making process of an organizational manager. The data obtained by the transaction processing system is manipulated to obtain the reports used in decision-making.
In an organization, different levels of management have different types of information needs and it is the function of the management information systems to tackle these needs, for instance, the information needs of the management in an organization can be tackled by the production of ad hoc reports or schedule reports (Parsons & Oja, 2010, p. 561).
Decision support systems
Middle-level managers in organizations mainly make use of decision support systems to equip them with crucial data that they will use in making decisions on behalf of the organization. The term traces its roots in the late 1970s when it was used and is still used to equip the decision-makers in an organization with the necessary tools required in modeling and accessing data. In terms of semi-structured decisions, the decision-makers mainly make use of decision support systems.
This is because in analyzing the data, the decision-makers are not always sure of the process to follow, the necessary data required, or the right tools to be used. This category of information systems is designed to indicate the effectiveness of an organization against the objectives (Grossman & Livingstone, 2009, p. 529).
Strategic information systems
Strategic information systems are mainly used in the executive decision-making process. This type of information system develops the strategic decision-making abilities of the executives in an organization. The strategic information systems are generally categorized into two, according to the type of support they offer to an organization.
The first category of support is the timely and effective information search, which is used in retrieving crucial internal and external information but the organization’s top executives. The second category of support is the facilitation of first and comprehensive analytical decisions. It is suggested that with the use of this kind of support, the decision analysis by the top executives will be enhanced without slowing down the whole process of decision-making (Zhang, 2010, p.2).
Principles of organizational information systems
In an information system, the importance of the information achieved is supposed to be as important as the organizational objectives it attains in its decision-making process. In addition to this, foreseeing the impact of the information system on the organization and putting the knowledge acquired into good use is crucial in ensuring organizational goals are met and a successful personal career is established.
To achieve a successful information system the all the concerned parties, which include the managers, professionals of information systems, and the system users must work together. Not only does the incorporation of the information system into an organization add more value to the organization it also gives the organization a competitive edge (Stair, et al, 2009, p. 2).
Users of Information systems
Information systems are incorporated in almost any type of professional in the current technological world. In advertising products, sales representatives make good use of information systems by communicating with customers as well as monitoring and analyzing the sales trends. In organizations or firms, managers incorporate information systems in decision making especially when it comes to critical decisions.
In the offering of advice to the clients on saving for the future, the financial planners make use of the information systems. In addition to this, financial and accounting operations across the various types of businesses are carried out using the information system. Regardless of the type of business one is operating information system has emerged as a critical tool of ensuring the various business goals are met. The feedback process is attributed to achieving the business goals achievement such as profit increase and improved customer service (Stair, et al, 2009, p. 4).
Conclusion
Information systems are designed for the sole purpose of aiding an organization in achieving effective decision-making capacities. The transaction processing systems for instance are mainly involved while dealing with repetitive operations. The information is normally analyzed and structured as the data is obtained easily and later store in large volumes.
Management information system, which is mainly used by middle-level managers, is used mainly in tracking, monitoring, and controlling the progress of the organization, which is later on reported to the senior managers. The decision support system is mainly used by managers while dealing with unstructured decisions.
The data of the decision is retrieved and analyzed in this type of information system. It is in this type of information system that a manager of an organization can undertake the “what-if analysis” due to its ability to generate various types of solutions. Cooperation between the information system personnel and the organization managers is defined as the key to releasing the full potential of a new system.
References
Grossman, T. and Livingstone, L. J. (2009). The Portable MBA in Finance and Accounting. NJ: John Wiley & Sons, Inc.
Parsons, J. J. and Oja, D. (2010). New Perspectives on Computer Concepts 2011. KY: Cengage Learning, Inc.
Stair, M. R., et al (2009). Fundamentals of Information Systems. KY: Cengage Learning, Inc.
Zhang, J. M. (2010). Can Firms Improve their Bottom-line Performance from Providing Information Systems Support for Strategic Decision Making? Connecticut: Sacred Heart University.