General-purpose and specialized systems: convert raw data into useful information for decision-making
An Information System (IS) is a set of interrelated components that work together to collect, process, store and disseminate information to support decision-making. They also support the coordination, supervision, analysis and visualization of an organization.
Furthermore, IT technology describes any technology that drives or enables the storage, processing and flow of communication within an organization. Everything related to computers—software, networks, intranets, websites, servers, databases and telecommunications—falls under the IT paradigm.
Most modern-day companies depend to a great extent on these systems for the management of their operations and decision-making, from email to database and website administration.
Information starts out as raw data, representing events that occur in organizations or in the physical environment; it has not yet been organized in a way that people can understand and use. This is the raw material for processing and refers to facts, events and transactions. Therefore, the purpose of an IS is to convert raw resources into useful information that can be used to make decisions in an organization.
For example, hospitals have large patient databases to be able to efficiently track medical histories. Universities have systems for the management of staff, students, and payments, as well as expanding networks for campus administration. Even a small business for home delivery of food needs a system for order management and tracking.
While Information Systems may differ in the way they are used within an organization, they all have the following components:
- Hardware: systems use local hardware such as a computer or Cloud services for their execution.
- Software: these are the programs used for administration, processing and analysis.
- Databases: systems work with resources organized in tables and files.
- Network: different resources must be connected to each other, especially if many different people in an organization use the same system.
- Procedures: they describe how specific data and resources are processed and analyzed to obtain the responses for which the system is designed (“business logic”).
Types of information systems
A database management system (DBMS) is a combination of software that allows for the administration and analysis of data. There are some general types of information systems.
An electronic spreadsheet is a tool for basic analysis; it is based on formulas that define relationships between resources. It can be used to calculate averages for a set of values or to see how a value changes over time.
In contrast, there are a number of specialized systems that have been specifically designed to support a particular process within an organization or to carry out very specific analysis tasks such as Enterprise Resource Planning (ERP): a system used to integrate management of the entire internal and external supply chain throughout an organization.
Another example is a Geographic Information System (GIS) which is used to manage and analyze all kinds of geographic data.
Decision Support Systems (DSS) are software applications used by senior and middle management to gather information from a wide range of sources and processes to support problem-solving and decision-making. A DSS is used primarily for unstructured and semi-structured decision problems.
Executive Information Systems (EIS) are reporting tools that provide quick access to reports and summarized processes, coming from all levels and departments of the company, such as accounting, human resources and operations.
There are more specialized systems, designed specifically to manage marketing, accounting systems and human resource management systems, to name a few.
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Salem Al-Mamary, Yaser Hasan & Shamsuddin, Alina & Aziati, A. ResearchGate. (2014). The Role of Different Types of Information Systems In Business Organizations