Introduction to Information System – Components & Types

What is Information System (IS) ?

An information system can be defined as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization. In addition to supporting decision making, coordination, and control, information systems may also help managers and workers analyse problems, visualize complex subjects, and create new products.

Components of Information System:

(1) People Resource: People are considered part of the system because without them, systems would not operate correctly. In Information system there are two kinds of people resource –

 (i) End User: also called users or clients, are people who actually use the information system or its products. Eg. Customers, salesperson, engineers, clerks, managers

 (ii) IS Specialist: also called IS developers, are people who develop the information system and its components. Eg. System Analysts (who design IS based of requirements of end users), Software developers (create computer programs based on specifications of analysts), System Operator (who help monitor and operate large computer system and networks) and other Managerial, Technical, Clerical IS personnel.

(2) Hardware Resource: All physical and tangible devices or material used in information processing. e.g.

 (i) Computer Systems: It consists of the central processing units and interconnect peripheral devices. Eg. Handheld devices, laptops, desktops, large mainframes computers

 (ii) Computer Peripherals: input and output devices such as keyboard, mouse, printer, monitor, disk drive, etc.

(3) Software Resource: It includes set of operating instructions called programs, which direct and control computer hardware and set of information processing instructions called procedures that people need. Hardware resources need programs and procedures in order to properly collect, process and disseminate information to their users.


 (i) System Software: such as an operating system. It controls and supports the operations of a computer system.

 (ii) Application Software: which are programs that directly processing for a particular use of computers by end users. e.g. Sales analysis programs, a payroll program, a ward program, etc.

 (iii) Procedures: Instructions for people who will use the IS. Eg. instructions for filling out a paper form.

(4) Data Resource: Data resources include data (which is raw material of information systems) and database. Data can take many forms, including traditional alphanumeric data, composed of numbers and alphabetical and other characters that describe business transactions and other events and entities. Text data, consisting of sentences and paragraphs used in written communications; image data, such as graphic shapes and figures; and audio data, the human voice and other sounds, are also important forms of data.

Data resources must meet the following criteria:

  1. Comprehensiveness: It means that all the data about the subject are actually present in the database.

  2. Non-redundancy: It means that each individual piece of data exists only once in the database.

  3. Appropriate structure: It means that the data are stored in such a way as to minimize the cost of expected processing and storage.

The data resources of IS are typically organized into:

  1. Processed and organized data – Databases

  2. Knowledge in a variety of forms such as facts, rules, and case examples about successful business practices

(5) Network Resources: Telecommunications networks like the Internet, intranets, and extranets have become essential to the successful operations of all types of organizations and their computer-based information systems. Telecommunications networks consist of computers, communications processors, and other devices interconnected by communications media and controlled by communications software. The concept of Network Resources emphasizes that communications networks are a fundamental resource component of all information systems.

 Network resources include:

  1. Communications media: such as twisted pair wire, coaxial cable, fiber-optic cable, microwave systems, and communication satellite systems.

  2. Network support/infrastructure: This generic category includes all of the people, hardware, software, and data resources that directly support the operation and use of a communications network. Examples include communications control software such as network operating systems and Internet packages.

Types of Information System:

(1) Management Support System – When Information Systems`s focus on providing information and support for effective decision making by managers it is called a Management Support System.

Types of Management Support System:-

 (i) Management Information System (MIS): It provides information in form of reports and displays to managers and other business professionals.

Example, Sales Manager may use this computer to instantaneously display sales result of their product and access their corporate intranet for daily sales analysis report that evaluate sales made by each sales person.

(ii) Decision Support System (DSS): It gives direct support to managers during decision making process. It tests alternative solutions and selects the better option. Example, A product manager may use DSS to decide how much product to manufacture based on expected sales associated with future promotion and availability of raw material.

Uses: Logistics, Financial Planning, Group decision support

(iii) Executive Information System (EIS): It provides critical information from wide variety of internal and external sources in easy-to-use form to executives and managers. They measure Critical Success Indicators (CSI) and Key Performance Indicators (KPI) associated with the problem to provide valuable information.

(2) Operations Support System – The Role of OSS is to efficiently process business transactions, control industrial processes, support enterprise communications and collaborations, and updates corporate databases.

Types of Operational Support System:-

(i) Transaction Processing System: It records and process data resulting from business transactions. It processes transactions in two ways –

a.) Batch Processing – transactions are accumulated over a period of time and processed periodically.

b.) Real Time – transaction is processed immediately after a transaction occurs.

Uses: Sales software at many retail stores, Order Processing, Payroll Management etc.

(ii) Process Control System: It monitors and controls physical processes. It tells the user about change in variables related to a process for effective performance evaluation and decision making. Example, petroleum refinery uses electronic sensors linked to computers to continuously monitor and control chemical processes.

Uses: Sensors, Auto-inventory reorder

(iii) Enterprise Collaboration System: These help to enhance team and workgroup communications and productivity in an organization. It includes applications that are sometimes called office automation systems. Example, video conference of a product design team (virtual team).

Uses: Communicating ideas, Share resources and Coordinate corporative work efforts

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