What Is an Information System?

Many organizations work with large amounts of data. Data are basic values or facts and are
organized in database. Many people think of data as synonymous with information; however,
information actually consists of data that has been organized to help answers questions and to
solve problems. An information system is defined as the software that helps organize and
analyze data. So, the purpose of an information system is to turn raw data into useful information
that can be used for decision making in an organization.

ROLE OF MANAGEMENT INFORMATION SYSTEM (MIS)

Simply MIS stand For Management Information System. For Simply Understanding
Management Information System (MIS) we can divide in to three Word and Understand Part by
part

1. Management: - Management is function to do the work at the Right time, by the

right Person, For the Right Job.

2. Information: - Information is the Collection of Organized data which plays a Vital

Role for decision making.

3. System:-System Consist for a set of elements which Provides a Framework to

convert Unorganized (Data) into Organized Information.

Meaning of Management Information System

Management information system refers to such system which provides accurate information to
the entire level of management for decision making process. For right job at the right time, by
the right person.
 Management information System

Role of Management Information System

Management information system (MIS) has become Very Necessary due to Emergence of high
complexity in Business Organization. It is all to know that without information no Organization
can take even one step properly regarding the decision making process. Because it is matter of
fact that in an organization decision plays an essential role for the achievement of its objectives
and we know that every decision is based upon information. If gathered information are
irrelevant than decision will also incorrect and Organization may face big loss & lots of
Difficulties in Surviving as well.

Helps in Decision making: - Management Information System (MIS) plays a

significant Role in Decision making Process of any Organization. Because in Any
organization decision is made on the basis of relevant Information and relevant information
can only be Retrieving from the MSI.
 Helps in Coordination among the Department: - Management information System
is also help in establishing a sound Relationship among the every persons of department to
department through proper exchanging of Informations.

Helps in Finding out Problems: - As we know that MIS provides relevant

information about the every aspect of activities. Hence, If any mistake is made by the
management then Management Information Systems (MIS) Information helps in Finding out
the Solution of that Problem.

Helps in Comparison of Business Performance: - MIS store all Past Data and
information in its Database. That why management information system is very useful to
compare Business organization Performance. With the help of Management information
system (MIS) Organization can analyze his Performance means whatever they do last year or
Previous Years and whatever business performance in this year and also measures
organization Development and Growth.

Why are there different types of Information System?

In the early days of computing, each time an information system was needed it was 'tailor made'
- built as a one-off solution for a particular problem. However, it soon became apparent that
many of the problems information systems set out to solve shared certain characteristics.
Consequently, people attempted to try to build a single system that would solve a whole range of
similar problems. However, they soon realized that in order to do this, it was first necessary to be
able to define how and where the information system would be used and why it was needed. It
was then that the search for a way to classify information systems accurately began.

How do you identify the different types of information system in an organization?

The different types of information system that can be found are identified through a process of
classification. Classification is simply a method by which things can be categorized or classified
together so that they can be treated as if they were a single unit. There is a long history of
classification of things in the natural world such as plants or animals, however, Information
systems are not part of the 'natural' world; they are created and acquired by man to deal with
particular tasks and problems. The classification of information systems into different types is a
useful technique for designing systems and discussing their application; it not however a fixed
definition governed by some natural law. A 'type' or category of information system is simply a
concept, an abstraction, which has been created as a way to simplify a complex problem through
identifying areas of commonality between different things. One of the oldest and most widely
used systems for classifying information systems is known as the pyramid model; this is
described in more detail below.

How many different kinds of Information System are there?

As can be seen above, there is not a simple answer to this. Depending on how you create your
classification, you can find almost any number of different types of information system.
However, it is important to remember that different kinds of systems found in organizations exist
to deal with the particular problems and tasks that are found in organizations. Consequently,
most attempts to classify Information systems into different types rely on the way in which task
and responsibilities are divided within an organization. As most organizations are hierarchical,
the way in which the different classes of information systems are categorized tends to follow the
hierarchy. This is often described as "the pyramid model" because the way in which the systems
are arranged mirrors the nature of the tasks found at various different levels in the organization.

For example, this is a three level pyramid model based on the type of decisions taken at different
levels in the organization.

Three level pyramid model based on the type of decisions taken at different levels in the
organization

Similarly, by changing our criteria to the differnt types of date / information / knowledge that are
processed at different levels in the organization, we can create a five level model.
 Five level pyramid model based on the processing requirement of different levels in the
organization

What are the most common types of information system in an organization?

While there are several different versions of the pyramid model, the most common is probably a
four level model based on the people who use the systems. Basing the classification on the
people who use the information system means that many of the other characteristics such as the
nature of the task and informational requirements, are taken into account more or less
automatically.
 Four level pyramid model based on the different levels of hierarchy in the organization

Definition - What does Operational Support System (OSS)mean?

An operational support system (OSS) is a group of computer programs or an IT system used by

communications service providers for monitoring, controlling, analyzing and managing a
computer or telephone network system. OSS software is specifically dedicated to
telecommunications service providers and mainly used for supporting network processes to
maintain network inventory, configure network components, provision services and manage
faults.

With the growth of new broadband and Voice over Internet Protocol (VoIP) systems, OSS and
network management are now applied to home networks.

An OSS is also known as a business support system (BSS).

The four key OSS elements are as follows:

Processes

Data

Applications

Technology
In the 1990s, a four-layer OSS model emerged, as follows:

Business Management Level

Service Management Level

Network Management Level

Element Management Level

What are Expert Systems?

The expert systems are the computer applications developed to solve complex problems in a
particular domain, at the level of extra-ordinary human intelligence and expertise.

Characteristics of Expert Systems

High performance

Understandable

Reliable

Highly responsive

Capabilities of Expert Systems

The expert systems are capable of

Advising

Instructing and assisting human in decision making

Demonstrating

Deriving a solution

Diagnosing

Explaining
 Interpreting input

Predicting results

Justifying the conclusion

Suggesting alternative options to a problem

They are incapable of

Substituting human decision makers

Possessing human capabilities

Producing accurate output for inadequate knowledge base

Refining their own knowledge

Components of Expert Systems

The components of ES include

Knowledge Base

Inference Engine

User Interface

Let us see them one by one briefly

What are Knowledge Management Systems?

Knowledge management systems refer to any kind of IT system that stores and
retrieves knowledge, improves collaboration, locates knowledge sources, mines repositories for
hidden knowledge, captures and uses knowledge, or in some other way enhances the KM
process.
If my explanation above makes the definition of these systems seem vague, that is because there
is no consensus as to what constitutes a knowledge management system, much like there is no
consensus regarding KM. Furthermore, since KM is involved in all areas of the firm, drawing a
line is very difficult.
James Robertson (2007) goes as far as to argue that organizations should not even think in terms
of knowledge management systems. He argues that KM, though enhanced by technology, is not a
technology discipline, and thinking in terms of knowledge management systems leads to
expectations of "silver bullet" solutions. Instead, the focus should be determining the
functionality of the IT systems that are required for the specific activities and initiatives within
the firm. However, with proper implementation, IT systems have become a critical component of
KM today.

What is Strategic Information System?

Strategic information systems (SIS) are information systems that are developed in response to
corporate business initiative. They are intended to give competitive advantageto the organization.
They may deliver a product or service that is at a lower cost, that is differentiated, that focuses on
a particular market segment, or is innovative.

Strategic information management (SIM) is a salient feature in the world of information

technology (IT). In a nutshell, SIM helps businesses and organizations categorize, store, process
and transfer the information they create and receive. It also offers tools for helping companies
apply metrics and analytical tools to their information repositories, allowing them to recognize
opportunities for growth and pinpoint ways to improve operational efficiency.

Some of the key ideas of storefront writers are summarized. These include Michael E. Porter's
Competitive Advantage and the Value Chain, Charles Wisemans Strategic Perspective View and
the Strategic Planning Process, F. Warren McFarlans Competitive Strategy[1] with examples of
Information Services Roles, and Gregory Parsons Information Technology Management[2] at the
industry-, firm-, and at the strategy level.[3]

A SIS is a computer system that implements business strategies; They are those systems where
information services resources are applied to strategic business opportunities in such a way that
the computer systems affect the organizations products and business operations. Strategic
information systems are always systems that are developed in response to corporate business
initiative. The ideas in several well-known cases came from information Services people, but
they were directed at specific corporate business thrusts. In other cases, the ideas came from
business operational people, and Information Services supplied the technological capabilities to
realize profitable results.

Most information systems are looked on as support activities to the business. They mechanize
operations for better efficiency, control, and effectiveness, but they do not, in themselves,
increase corporate profitability. They are simply used to provide management with sufficient
dependable information to keep the business running smoothly, and they are used for analysis to
plan new directions. Strategic information systems, on the other hand, become an integral and
necessary part of the business, and they affect the profitability and growth of a company. They
open up new markets and new businesses. They directly affect the competitive stance of the
organization, giving it an advantage against the competitors.

Most literature on strategic information systems emphasizes the dramatic breakthroughs in

computer systems, such as American Airlines' Sabre System and American Hospital Supplys
terminals in customer offices. These, and many other highly successful approaches are most
attractive to think about, and it is always possible that an equivalent success may be attained in
your organization. There are many possibilities for strategic information systems, however,
which may not be dramatic breakthroughs, but which will certainly become a part of
corporate decision making and will, increase corporate profitability. The development of any
strategic information systems always enhances the image of information Services in the
organization, and leads to information management having a more participatory role in the
operation of the organization.

Three general types of information systems[edit]

The three general types of information systems that are developed and in general use are
financial systems, operational systems, and strategic systems. These categories are not mutually
exclusive and, in fact, they always overlap to some. Well-directed financial systems and
operational systems may well become the strategic systems for a particular organization.

Financial systems are the basic computerization of the accounting, budgeting, and
finance operations of an organization. These are similar and ubiquitous in all organizations
because the computer has proven to be ideal for the mechanization and control or financial
systems; these include the personnel systems because the headcount control andpayroll of a
company is of prime financial concern. Financial systems should be one of the bases of all
other systems because they give a common, controlled measurement of all operations and
projects, and can supply trusted numbers for indicating departmental or project success.
Organizational planning must be tied to financial analysis. There is always a greater
opportunity to develop strategic systems when the financial systems are in place, and
required figures can be readily retrieved from them.

Operational systems, or services systems, help control the details of the business. Such
systems will vary with each type of enterprise. They are the computer systems that
operational managers need to help run the business on a routing basis. They may be useful
but mundane systems that simply keep track of inventory, for example, and print out reorder
points and cost allocations. On the other hand, they may have a strategic perspective built
into them, and may handle inventory in a way that dramatically affects profitability. A prime
example of this is the American Hospital Supply inventory control system installed on
 customer premises. Where the great majority of inventory control systems simply smooth the
operations and give adequate cost control, this well-known hospital system broke through
with a new version of the use of an operational system for competitive advantage. The great
majority of operational systems for which many large and small computer systems have been
purchased, however, simply help to manage and automate the business. They are important
and necessary, but can only be put into the "strategic" category it they substantially affect the
profitability of the business.

All businesses should have both long-range and short-range planning of operational systems to
ensure that the possibilities of computer usefulness will be seized in a reasonable time. Such
planning will project analysis and costing, system development life cycle considerations, and
specific technology planning, such as for computers, databases, and communications. There must
be computer capacity planning, technology forecasting, and personnel performance planning.

Operational systems, then, are those that keep the organization operating under control and most
cost effectively. Any of them may be changed to strategic systems if they are viewed with
strategic vision.

Strategic systems are those that link business and computer strategies.They are the
systems where new business strategies has been developed and they can be realized using
Information Technology. They may be systems where new computer technology has been
made available on the market, and planners with an entrepreneurial spirit perceive how the
new capabilities can quickly gain competitive advantage. They may be systems where
operational management people and Information Services people have brainstormed together
over business problems, and have realized that a new competitive thrust is possible when
computer methods are applied in a new way.

There is general agreement that strategic systems are those information systems that may be used
gaining competitive advantage. How is competitive advantage gained?. At this point, different
writers list different possibilities, but none of them claim that there may not be other openings to
move through.

Strategic role of information system

By strategic we mean the long-term, far-reaching role of IT systems in an
organisation. Large organisations have a number of levels of organisation, each with
different emphases and specialities. Consequently each has needs for different
types of IT systems.

Two main ways of dividing up an organisation are used in the diagram:

Hierarchical levels

Functional areas.

The types of information system required at the different levels within an

organisation and for different functional areas need to be considered.

Hierarchical Levels And Systems

The hierarchy of the organisation can be divided into four levels:

1. Strategic

2. Management

3. Knowledge

4. Operational

Each of these levels requires its own types of systems.

Strategic-Level Systems
For strategic managers to track and deal with strategic issues, assisting long-range planning. A
principle area is tracking changes in the external conditions (market sector, employment levels,
share prices, etc.) and matching these with the internal conditions of the organisation.

Management-Level Systems

Used for the monitoring, controlling, decision-making, and administrative activities

of middles management. Some of these systems deal with predictions or what if
type questions. e.g. What would happen to our profits if the completion of the new
production plant was delayed by 6 months? Tracking current progress in accord
with plans is another major function of systems at this level.

Knowledge-Level Systems
Support knowledge and data workers.

Support the discovery, processing and storage of knowledge.

Control the flow of paper work.
Enable group working.
This is one of the fastest growing areas of business software.

Operational-Level Systems:
Support operational managers tracking elementary activities. These can include tracking
customer orders, invoice tracking, etc. Operational-level systems ensure that business procedures
are followed.

Functional Areas Of An Organisation

The organisation can also be divided into five functional areas:

1. Sales & Marketing

2. Manufacturing

3. Finance

4. Accounting

5. Human resources

These functional areas exist at all four levels of the organisation, being represented
from the operational-level up to the strategic-level.

Types Of System

Putting the functional areas together with the hierarchical levels of the organisation,
we can examine the different types of systems needed in an organisation.
Strategic-Level

Executive Support Systems (ESS)

This category is used by senior managers, assisting them in strategic decision

making by creating a general environment for communications and computing
suitable for unstructured decision making. ESS presents information about the
external world (such as new government regulations) and also summarises
information from MIS and DSS from within the organisation.

Management-Level

Decision-Support Systems (DSS)

DSS assist managers in making semi-structured decisions, required for rapidly

changing environments and where complete information about a situation is not
available. These systems may summarise information from TPS and MIS and also
bring in information from external sources.

Management Information Systems (MIS)

Provides analysis and reports for managers. These systems may also be able to
provide historical profiles about the organisations performance. MIS is used for
planning, decision-making and control at the management level.
Knowledge-Level

Knowledge Work Systems (KWS)

KWS are used by knowledge workers, the specialist workers within the organisation.
KWS promote the development of new knowledge and also ensure that this new
knowledge is properly integrated into the organisation. Knowledge workers are often
highly qualified, with highly specialised skills. They perform complex tasks; KWS
assist them in these tasks. Examples include computer programmers, geologists,
architects, market analysts.

Office Automation Systems (OAS)

OAS are used by data workers. Often OAS co-ordinated data workers, perhaps in
geographically separate sites, working in different areas of the organisation. OAS
also may perform specialised tasks, like scheduling, desktop publishing or document
imaging. Data workers are typically not as highly qualified as knowledge workers
and are not specialised to the same extent. Knowledge workers include secretaries,
PAs, accountants.

Operational-Level

Transaction Processing Systems (TPS)

Basic business systems that are used in the operational environment of the
organisation. These can include payroll systems, ordering systems and employee
records systems. TPS enforces strict procedures for carrying out business processes.

Integrating Information Systems with Business Strategy

Information systems when used for providing information to managers for their decision-making
needs become a management information system. The goal of such information systems is to
provide relevant information to management so that it helps in its functioning.
Since decision-making is the most important task performed by the management at different
levels, information that helps managers to take decisions is the most important objective of any
management information system. Other information that is relevant for managers in helping
them in their planning, controlling, organizing and directing activity is the secondary objective of
any MIS.

However, an information system is normally not dynamic enough to alter itself to a degree that it
can handle changing requirements from users. Hence, information systems are planned to take
care of every possible eventuality as far as type of information is concerned. Management may
require diverse types and combination of information and this is factored in the planning process.
The system is planned in a way that it can handle future new requirements of information from
managers.

The business strategy of the company is very important in planning for information systems. The
information systems plan is drawn up in a way that it supports the strategic objectives of the
organization even in the near future. It is for this reason that the strategic role of information
system has to be clearly defined in the planning processes itself.

What is Information System Strategy?

The information required to support business strategy and the development of information
systems relevant to providing such information needs to be planned and fitted with each other.
This alignment of business strategy with IS results in information systems strategy. It is a
continuous process that helps the IS support structure to continuously remain relevant for any
organization's strategic goals and objectives.

Information System Infusion and Diffusion

Information systems can have the effects of infusion of diffusion in an organization. If the
diffusion and infusion is low, information systems will be used only in silos for data processing.
If diffusion is high and infusion is low then we will have a decentralized information system. If
infusion is high and diffusion low, we will have information systems that are critical to
operations only. However, if both diffusion and infusion is high, our information system will
give us strategic and competitive advantage.
How can IS be Used Strategically

In the absence of a cogent strategy for IS, it will deliver information that may be of little strategic
value. Moreover, operationally the different technology platforms used, different systems that
make up the entire information systems of an organization may not work in a synchronized
manner unless all the systems and technology conform to a bigger strategic vision.
Incompatibility will be the rule rather than the exception. Business goals and objectives will not
be largely affected (positively or negatively) by such direction less IS. Opportunities will be
missed. With a tactical focus IS cannot deliver strategic value to organizations. IS therefore must
have a strategic focus. It must be closely aligned with business strategy and must be driven by
business needs rather than technological possibilities. It should be integrated with the
organizational strategy to deliver information that helps management to beat competition and
thereby use IS as a tool for competitive advantage. IS in such a case has to deliver predictive
insights into business issues.

Why we need a strategic Approach to Information Systems

If we analyze the history of information systems and how they have been put to use in
organizations, then we get to see three eras (Ward 1990). In the initial or first era, information
systems were primarily used as data processing tools and the focus was improving efficiency of
repetitive work by automating such data processing and back office work. In the second era,
management information systems were the rage. MIS focused on improving information flow
within the organization so that the right person gets the right information. Essentially, MIS was
used as a reporting aid and thus by definition, reactive in nature. The third era of information
systems is dominated by strategic information systems which work as a game changer in a
competitive environment providing the organization with the upper hand. The focus in these
kinds of IS is IT applications for predictive insights into the competitive market conditions and
other strategic goals of the organization. In the present date, this kind of IS finds acceptability
and is used extensively in the corporate world. The table below clearly lays down the
differentiating characteristics of the different eras of IS.

Strategy 1: Different Eras of Information Systems

Time Eras Characteristics

Fifties and sixties Data processing Cost minimization

Repetitive work
Operational work/data
Back office work
Removed from actual
users
In silos
On standalone system(T)

Seventies and eighties Management information Interconnected

system information flows
Close to users
Distributed processing
Focus on providing right
information to
the right person at the right
time
Focus on providing
information that helps
in decision-making
User need driven
Supports the business
processes
Management oriented

Eighties and nineties Strategic information Networked

system Integrated
Predictive insights
 Business driven
Aligned to business
strategy

Unless information systems fit into the broad strategy of the firm, it is likely to generate
suboptimal results for the firm. The true potential of information systems can only be realized if
the organization adopts a strategic approach towards the information system resource. IS in this
regard should be considered as an asset that can provide insights that help in improving the
business of the firm in any manner rather than as an expense (to get information about one's own
organization). Actually, IS should fit into the strategy of the firm and help in achieving the
strategic objectives.

Information system needs a strategic orientation as without such orientation the will lose focus.
More focus is given to technology whereas business needs are its primary focus. The strategic
orientation of information systems helps it to have definable goals and objectives itself.

Information systems can be used strategically to:

1. Improve integration or process within the organization. This helps in improving overall
efficiency and performance.
2. Link the organization with customers and suppliers. This ensures that the reaction time
for the organization is low and that effectiveness of the firm improves.
3. To provide top executives with critical information about the organization. This helps in
better management as information flow improves and leads to better decision-making.
4. To enable improvement in products and services. This helps in the competitiveness of the
firm.

Use of Information Systems by Different Category of Companies

Information systems are used by different companies in different ways. One of the ways to find
the use of information system in organizations is to use the BCG matrix. The use and adoption of
information systems depends upon where they lie in the BCG matrix. Star companies use IS to
improve products and services and for innovation, while, Dog companies use it for support and
cost reduction only. Cash Cow companies use it to improve productivity and Wild cats use it for
insights and differentiation.