Types Of Information Systems A Business Organization Needs

Types Of Information Systems A Business Organization Needs

Business organizations require the use of several different types of information systems to support business operations. These systems range from the more broad categories such as transaction processing systems and executive information systems to more specific ones like Client-server information systems.

We asked the experts to elaborate on the various types of information systems essential for a business organization. Here are the top 14 information systems;

1. Online Analytical Processing (OLAP)

Online analytical processing (OLAP) is a technique for querying and analyzing multi-dimensional data and producing information that may be viewed in a variety of ways. Assume a business sells laptops, desktop computers, and mobile devices. They are divided into four branches: A, B, C, and D. The entire sales of each product in all regions may be viewed using OLAP, and the actual sales can be compared to the expected sales. 

Each dimension is represented by a distinct piece of data, such as the product, the number of sales, and the sales value. The basic goal of OLAP systems is to respond to ad hoc queries in the lowest amount of time possible, regardless of the size of the datasets involved.

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Every business organization needs to have an information system in place. This is the platform that allows them to store, process, and retrieve data within their organization. There are different types of information systems that can be implemented based on what type of company operation is being done. 

Different companies need different types of software depending on their processes for getting things done or selling products/services. Some examples include:

2. Automated Systems

These manage and monitor assets and production processes. They may include data gathering, processing, and reporting of information, such as email marketing or customer relationship management systems.

3. Software Systems

Generally, on-demand products are either custom-developed for a specific organization or purchased off the shelf from an IT vendor. These can serve business functions such as finance, planning, inventory control, and more.

4. Technology Infrastructure

Hardware computer components such as servers, hard drives, and networking cables; these also include software applications like operating systems (OSs) or database management systems (DBMSs). Users depend on all of these elements to access corporate networks and files stored on them by employees—including back-ups of valuable corporate information.

5. Centralized Information Systems

Large networks of centralized computers and data storage, usually owned by a company or organization as a whole. Using these resources can improve efficiency and productivity across the entire organization as users store, process, and retrieve shared files from one location.

6. Decentralized Information Systems

Use an individual desktop computer to enter, store, and change data. Although decentralized systems may be more costly to set up and maintain due to a proliferation of hardware and software, they do have advantages over centralized systems.

7. Client-server Information System

This type of system consists of two types of computers: servers that house the mainframe applications as well as other networked services, plus client PCs or workstations, which are used by employees to access the mainframe applications.

8. Database Information System

This type of system employs a computerized collection of data organized so that records can be easily accessed and processed. Databases use a standard language called a database management system (DBMS) to store and retrieve files.

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9. CRM

You need a customer relationship management (CRM) system to help gather and analyze client data. This is how you build better client relationships, identify new leads and make continuous improvements to your products and services. Be sure to integrate your CRM with the sales side of your business to give your salespeople a better chance at closing those leads. 

10. Data Storage

Many small businesses are turning to internet data storage services instead of relying on in-house computers to store their growing data. Organizations can use programs like Dropbox and Google Drive to maintain their data entirely in the cloud, allowing team members to access information regardless of their physical location. Even if you decide to use an in-house server, backing up your data to the cloud adds a layer of security if your computer or server fails.

Gergo Vari, CEO and Founder at Lensa

11. Transaction Processing System (TPS)

The organization’s day-to-day business transactions are recorded using transaction processing systems. Users at the operational management level use them. A transaction processing system’s main goal is to respond to common questions such as; 

  • How are printers sold nowadays?
  • What is the current status of our inventory?
  • What is John Doe’s outstanding debt?

TPS system delivers quick responses to the following queries by documenting day-to-day company transactions.

  • Operational managers make repetitive and highly organized decisions. 
  • The data generated by the transaction processing system is quite detailed.

Banks, for example, require that a person’s employer have a memorandum of understanding (MoU) with the bank before granting a loan. When a person applies for a loan through an employer who has a Memorandum of Understanding with the bank, all the operational staff has to do is verify the given documentation. 

The loan application documents are processed if they meet the standards. If they do not fulfill the standards, the customer should consult with tactical management to determine if a Memorandum of Understanding may be signed. The following are some examples of transaction processing systems:

  • Point-of-Sale Systems (POS) — keeps track of everyday sales. 
  • Payroll systems are used to handle employee salaries, manage loans, and so on.
  • Inventory control systems are used to maintain track of inventory levels.
  • Booking systems for airlines – flight management

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12. Office Automation (OAS)

An office automation system is a collection of tools, technology, and people that facilitate clerical and managerial activities, like printing documents, shipping paperwork, mailing, maintaining a company calendar, and providing reports. Crucially, an office automation system helps improve communication between departments so that everyone can work together to finish a task.

13. Knowledge Management

A knowledge management system collects and organizes data to help users improve their knowledge and collaborate more effectively to perform tasks. Employee training materials, company policies and procedures, and replies to client questions are all examples of documents found in a knowledge management system. 

Employees, customers, management, and other stakeholders engaged with the firm use a KMS. It guarantees that technical skills are distributed throughout the organization while also providing graphics and visuals to assist employees in making sense of the data they are presented with. 

Brian Snedvig, CEO and Founder of Jofibo

14. Executive Support System

Executive support systems are similar to decision support systems, except they are primarily used by executives and owners to help them make better decisions. Enterprise leaders can use an expert system to obtain answers to non-routine issues, allowing them to make decisions that improve the company’s outlook and performance. 

Unlike a DSS, an executive support system has superior telecommunication capabilities and more processing power. Data on tax regulations, new competitor startups, internal compliance issues, and other essential executive information is displayed using graphics software embedded into an ESS. 

Leaders may use this information to track internal performance, keep an eye on the competition, and identify growth prospects.

Dr. Dee Richardson, CEO & Owner Healing Hands Chiropractic

Clarence McDaniels
Clarence is the Editor-in-Chief for Free BSD Made Easy focusing on the production and quality of the contents.