What are the three 3 activities that information systems can do to produce information for organizations How is this useful?

Since the early days of computer technology, different classifications or types of information systems have been used in organisations to identify how information should be used, managed, and analysed.

However, there seems to be a lot of confusion around what is meant by an ‘information system’, as this is a term that can be loosely referred to many different things depending on what type of information we’re looking at and who it is being used by.

To help your understanding, we’ve put together a quick guide to the main 4 types of information systems used in an organisation according to each level of management. This includes

1. Low level workers – Transaction Processing Systems
2. Middle Managers – Management Information Systems
3. Senior Managers – Decision Support Systems
4. Executives – Executive Information Systems

At Catalyst Computers, we help you identify areas of opportunities to boost business productivity and performance across all levels of management – from low to mid, to senior and executive levels. Simply get in touch to see how we can help you!

1. Transaction Processing Systems – For Low Level Workers

Transaction processing systems are at the most foundational and basic level of information systems for a business organisation. This is because transaction processing systems are often the first step in acquiring basic information that is later used by higher management to make better business decisions.

Transaction processing systems are involved in things such as payroll, tracking stock, order processing, and more. All of these processes are carried out by the lower level of employees within an organisation or business.

2. Management Information System – For Middle Managers

In the next level up we have Management Information Systems which deal with merging, sorting, and organising the data received in the Transaction Information Systems. This information is still relatively well structured for middle managers to gain a better picture of how information is being managed by the organisation.

Some examples of management information systems include inventory control systems, sales management systems, Human Resource Management systems, and more.

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3. Decision Support System – For Senior Managers

Decision Support Systems are used for ‘what if’ analysis, taking the data we have and projecting solutions for areas of concern. This usually involves pulling different types of data and requires a high level of interactivity as it is often used for less structured challenges in an organisation.

An example of a decision support system in use would be comparing sales data between two different time periods. This information could help identify what sort of trend we could see happening in the future or how the company’s process could be improved.

4. Executive Information System – For Executives

Executive Information Systems are one step up from Decision Support Systems in that it has a more user-friendly interface that provides key information for business decision making.

It often encompasses a ‘drill down’ feature which provides not only an overview of how the organisation is performing in various departments and areas, but can also be narrowed down to specific aspects of information.

Executive Information Systems are used to compare, analyse and focus on different variables – often being in the form of a digital dashboard, analytic tool, reporting dashboard, etc.

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Understanding the types of information systems for a business organisation is incredibly useful to pinpoint what type of IT infrastructure you may need to improve your business performance. At Catalyst Computers, we help you identify any weak points within your business workflow that may be holding you back in getting the results you’re after.

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Running a successful business calls for proper management of financial and organizational data and statistics, via quality information systems. Almost every company has experienced a drastically slowed workflow, because of data problems related to reliability and accuracy. It’s true that there is no substitute for the right information at the right time in the business world.

This prompted the development of systems that can be used to make the information accurate, readily available, and easily accessible. With the effectiveness of information systems, an organization can have better decision-making, better planning, and ultimately better results.

How do Information Systems Influence Modern Business?

In today’s continuously changing and fast moving world, customers’ requirements and preferences are always evolving. The only businesses that can hope to remain competitive and continue to function at the performance levels that match their customers’ expectations are those that embrace innovation. In the recent past, any business success has been pegged on the information technology quality that the business has employed and the capability to correctly use such information.

Information systems (IS) importance has increased dramatically, and most businesses have been prompted to introduce it to keep their competitive edge. Today, nobody can envisage a business without an effective digital information system. Introduction of an information system to a business can bring numerous benefits and assist in the external and internal processes that a business encounters daily, and decision-making for the future. Some of the benefits of an information system include:

New Products and Services

Any company looking to improve and secure the future has to establish a broader perspective with the use of a well-designed and coordinated information system. The IS makes it easier to analyze independent processes such as information to produce valuable products or services and organized work activities. Therefore, an IS can give a company the competitive advantage by analyzing how a company creates, produce, and sell their products or services. This means that the focus will be put on the main goal ahead.

Information Storage

Every organization needs records of its activities, to find the cause of problems and proper solutions. Information systems are useful for storing operational data, communication records, documents, and revision histories. Manual data storage will cost the company lots of time, especially when it comes to searching for specific data. A quality information system stores data in a comprehensive and sophisticated database which makes the process of finding it much more convenient. With such information, a company can analyze how certain actions affected the business, as well as prepare cost estimates and forecasts.

Easier Decision Making

Without an information system, a company can take a lot of time and energy in the decision-making process. However, with the use of IS, it’s easier to deliver all the necessary information and model the results to make better decisions. The management team can use the information system to choose the best course of action and carry out the tasks. When there are several appealing alternatives, the information system can be used to run different scenarios by calculating key indicators such as costs, sales, and profits. This way, you can determine the alternative with the most beneficial results.

Behavioral Change

Employers and employees can communicate rapidly and more effectively with an information system. While emails are quick and effective, the use of Information Systems is more efficient, since documents are stored in folders that can be shared and accessed by employees.

This implies that information flows from the management to lower-level employees and vice versa. Also, the lower-level employees get enlightened and involved in important decision making, and this eliminates the need for middle managers. Employees who are directly involved in the decision-making process are motivated and dedicated to their tasks.

Importance of Earning a Master's Degree in Information Systems

Nearly all businesses have an IT department, outsourced IT service, or a full-time professional. IT services improve productivity and reduce costs. The information systems personnel is responsible for sustaining the software, hardware, data storage, and networks.

Are you interested in the power of information systems? If you would like to earn a Master of Science in Information Systems, ECPI University offers this course at an accelerated rate. For more information about this exciting program, connect with a friendly admissions advisor today.

It could be the Best Decision You Ever Make!

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