1.1.3.1 Types of Information systems

Information systems differ in their business needs. Also depending upon different levels

in organization information systems differ. Three major information systems are

1. Transaction processing

2. Management information system

3. Decision support system

Figure 1.2 shows relation of information system to the levels of organization. The

information needs are different at different organizational levels. Accordingly the

information can be categorized as: strategic information, managerial informati

on and

operational information.

Strategic information is the information needed by top most management for decision

making. For example the trends in revenues earned by the organization are required by

the top management for setting the policie

s of the organization. This information is not

required by the lower levels in the organization. The information systems that provide

these kinds of information are known as Decision Support Systems.

The second category of information required by the middle management is known as

managerial information. The information required at this level is used for making short

term decisions and plans for the organization. Information like sales analysis for the past

quarter or yearly production details etc. fall under this category. Management information

system(MIS) caters to such information needs of the organization. Due to its capabilities

to fulfill the managerial information needs of the organization, Management Information

Systems have become a necessity for all big organizations. And due to its vastness, most

of the big organizations have separate MIS departments to look into the related issues and

proper functioning of the system.

The third category of information is relating to the daily or short term information needs

of the organization such as attendance records of the employees. This kind of information

is required at the operational level for carrying out the day-to-day operational activities.

Due to its capabilities to provide information for processing transaction of the

organization, the information system is known as Transaction Processing System or Data

Processing System. Some examples of information provided by such systems areprocessing

of orders, posting of entries in bank, evaluating overdue purchaser orders etc.