MIS - Module 2.docx - Types of Information System(IS)The...

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Types of Information System (IS)- The most common types of information systems used in business organizations are those designed for electronic and mobile commerce, transaction processing, management information, and decision support. In addition, some organizations employ special-purpose systems, such as virtual reality , that not every organization uses. Together, these systems help employees in organizations accomplish routine and special tasks from recording sales, pro-cessing payrolls, and supporting decisions in various departments, to providing alternatives for large-scale projects and opportunities. ). For example, some enterprise resource planning packages process transactions, deliver information, and support decisions. Business information systems are often integrated in one product and can be delivered by the same software package. Figure shows a simple overview of the development of important business information systems discussed in this section.
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Transaction Processing System for Operational Control, Since the 1950s, computers have been used to perform common business applications. Many of these early systems were designed to reduce costs by automating routine, labour intensive business transactions. A transaction is any business-related exchange such as payments to employees, sales to customers, or payments to suppliers. Thus, processing business transactions was the first computer application developed for most organizations. A transaction processing system (TPS) is an organized collection of people, procedures, software, databases, and devices used to record completed business transactions. If you understand a transaction processing system, you understand basic business operations and functions. One of the first business systems to be computerized was the payroll system (see Figure below). The primary inputs for a payroll TPS are the number of employee hours worked during the week and the pay rate. The primary output consists of paychecks. Early payroll system produces employee paychecks and related reports required by state and federal agencies, such as the Internal Revenue Service. Other routine applications include sales ordering, customer billing and customer relationship management, and inventory control. Some automobile companies, for example, use their TPSs to buy billions of dollars of needed parts each year through Internet sites. Because these systems handle and process daily business exchanges, or transactions, they are all classified as TPSs. Payroll Transaction Processing System In a payroll TPS, the inputs (numbers of employee hours worked and pay rates) go through a transformation process to produce outputs (paychecks). Enterprise systems help organizations perform and integrate important tasks, such as paying employees and suppliers, controlling inventory, sending invoices, and ordering supplies. In the past, companies accomplished these tasks using traditional transaction processing sys-tems. Today, they are increasingly being performed by enterprise resource planning systems.
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