What Is an Information System? Definition and Uses

By Indeed Editorial Team

August 25, 2021

Advancements in technology have provided many ways for information technology to be incorporated into the business world. One such implementation that has gained immense popularity over the years is the use of information systems. They are a great depiction of how humans and technology interact to provide a better output for business purposes.

The future of information systems and their continued importance in the business world depends on their focus on automation and the use of AI technology. The smarter these systems get, the more likely they are to be used in the business world of the future. In this article, we discuss what an information system is, as well as the different parts and types of information systems.

What is an information system?

An information system is a collection of many sets of data that ensures the successful completion of a business objective. Information systems are not a stand-alone model of the IT industry. Instead, a crucial aspect of their successful implementation is their integration with data and business processes. Thus, it is better to think of the information system as a triangle. The three parts of this triangle represent processes, people and computers. An information system requires each of these components to work properly to succeed.

Tools used in an information system

An information system uses a range of equipment to allow for the effective distribution of information. This equipment often includes tools, such as different forms of hardware, or virtual equipment composed of different systems and application software. An easy way to understand the information system is to think of it as a software program that helps to keep data organized and perform various types of analysis on the data. Usually, it facilitates the conversion of raw data into useful information.

For example, consider a survey that has collected data about multiple products bought by teenagers. An information system not only helps to sort this data, but it also helps to perform data analysis. Such analysis may reveal trends of buying habits in teenagers or the products that are currently in popular demand.

Uses for information systems

Information systems can be used for both general or specialized purposes. A general-purpose information system focuses more on providing a general service for a range of uses. An example of such an information systems is a database management system. This software helps to organize and analyze general forms of data. For example, a formula can be used on the data to derive various data sets, giving insight into buying trends for a certain time period.

However, a specialized information system is built for a specific process of a firm or organization. Thus, it performs only specific tasks. An example of this can be expert systems, where the purpose of the system is to solve complex problems. However, these problems are generally focused on a specific field of study, such as a medical expert system. The idea here is to provide faster and more accurate service than people might be able to do on their own.

Parts of an information system

The information system triangle shows that there are three parts of an information system: people, business processes and information technology.

People

The first part of an information system includes the people who use it. This category includes people who, in any form, interact with the particular process that the information system is focused on. For example, these may be the line workers who are managing a task that the information system covers in a car manufacturing factory.

Business processes

These are the activities that are carried out in a business for specific goals. Moreover, such activities are in some shape or form interacting with the information system. For example, the process of the line production of car parts in a car manufacturing factory can be a part of the information system that works production of such parts.

Information technology

Finally, information technology is a crucial component of information systems. The use of computer hardware and software is crucial to ensure that the information system works. For example, if a computer program is required to work alongside the information system to collect the data, it must be integrated within the system itself. An information system must also have the software required to store relevant data and perform the intended analysis and organization of the data. This category may include a single software program or a range of software programs depending on the type and the purpose of the information system.

Types of information systems

The type of system your organization uses will depend on its current and overall business objectives.

Here are the four main types of information systems:

Operations support systems

The first of these types is operations support systems. Usually, such information systems complement a certain operation of the business. An example of an operations support system could be the transaction processing systems used in almost all banks around the world. Usually, this type of software allows the service provider to analyze a particular process of the business. They also help in controlling and managing a service in a specific network.

Management information systems

The second major category of information systems is management information systems. These systems usually consist of a combination of hardware and software integration that help an organization perform its core functions. Thus, they are involved in gathering data from multiple online systems. This information is not only stored by such systems but is also analyzed and reported in a useful manner to help management make decisions for their organization.

Decision support systems

The decision support systems help an organization to make informed decisions regarding its operations. Often, the focus of these systems is to analyze information that is rapidly changing and cannot be determined easily in advance. Such systems are available both in the form of completely automated systems or completely human-operated systems. However, the trend in DSS has been a combination of human and computer-operated systems for maximum efficiency.

Executive information systems

The last major category of information systems is the executive information systems, commonly abbreviated as ESS. These information systems serve as management support systems. Usually, they are used in the senior-level decision-making needs of an organization. They are usually also considered an advanced form of DSS. The major difference between EIS and DSS is the focus on using graphical representation and an interface that is easy for users to understand. At the same time, an EIS is focused on a much broader picture than the DSS.

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