A comparison of different kinds of Information Systems

Using the four level pyramid models above, we can now compare how the information systems in our model differ from each other.

1.       Transaction Processing Systems

Transaction Processing System is operational-level systems at the bottom of the pyramid. They are usually operated directly by shop floor workers or front line staff, which provide the key data required to support the management of operations. This data is usually obtained through the automated or semi-automated tracking of low-level activities and basic transactions.

Functions of a TPS

TPS are ultimately little more than simple data processing systems.

Some examples of TPS

• Payroll systems
• Order processing systems
• Reservation systems
• Stock control systems
• Systems for payments and funds transfers

The role of TPS

• Produce information for other systems
• Cross boundaries (internal and external)
• Used by operational personnel + supervisory levels
• Efficiency oriented

2.       Management Information Systems

What is a Management Information System?

For historical reasons, many of the different types of Information Systems found in commercial organizations are referred to as "Management Information Systems". However, within our pyramid model, Management Information Systems are management-level systems that are used by middle managers to help ensure the smooth running of the organization in the short to medium term. The highly structured information provided by these systems allows managers to evaluate an organization's performance by comparing current with previous outputs.

Functions of a MIS

MIS are built on the data provided by the TPS

Some examples of MIS

• Sales management systems
• Inventory control systems
• Budgeting systems
• Management Reporting Systems (MRS)
• Personnel (HRM) systems

The role of MIS

• Based on internal information flows
• Support relatively structured decisions
• Inflexible and have little analytical capacity
• Used by lower and middle managerial levels
• Deals with the past and present rather than the future
• Efficiency oriented?

2.       Decision Support Systems

What is a Decision Support System?

A Decision Support System can be seen as knowledge based system, used by senior managers, which facilitates the creation of knowledge and allow its integration into the organization. These systems are often used to analyze existing structured information and allow managers to project the potential effects of their decisions into the future. Such systems are usually interactive and are used to solve ill structured problems. They offer access to databases, analytical tools, allow "what if" simulations, and may support the exchange of information within the organization.

Functions of a DSS

DSS manipulate and build upon the information from a MIS and/or TPS to generate insights and new information.

Some examples of DSS

• Group Decision Support Systems (GDSS)
• Computer Supported Co-operative work (CSCW)
• Logistics systems
• Financial Planning systems
• Spreadsheet Models?

The role of DSS

• Support ill- structured or semi-structured decisions
• Have analytical and/or modeling capacity
• Used by more senior managerial levels
• Are concerned with predicting the future
• Is effectiveness oriented?

2.       Executive Information Systems

What is an EIS?

Executive Information Systems are strategic-level information systems that are found at the top of the Pyramid. They help executives and senior managers analyze the environment in which the organization operates, to identify long-term trends, and to plan appropriate courses of action. The information in such systems is often weakly structured and comes from both internal and external sources. Executive Information System are designed to be operated directly by executives without the need for intermediaries and easily tailored to the preferences of the individual using them.

Functions of an EIS

EIS organizes and presents data and information from both external data sources and internal MIS or TPS in order to support and extend the inherent capabilities of senior executives.

Some examples of EIS

Executive Information Systems tend to be highly individualized and are often custom made for a particular client group; however, a number of off-the-shelf EIS packages do exist and many enterprise level systems offer a customizable EIS module.

The role of EIS

• Are concerned with ease of use
• Are concerned with predicting the future
• Are effectiveness oriented
• Are highly flexible
• Support unstructured decisions
• Use internal and external data sources