Information systems consist of a coordinated group of parts for the purposes of data collection, data processing, data storage and the provision of knowledge, information, and digital goods. They are essential to the administration and management of commercial enterprises as well as other organisations, as well as to communicate with clients and suppliers and market competition.

Information system manages the virtual marketplaces and distribution networks between organisations. Businesses, for instance, employ information systems to handle financial records, oversee their personnel resources, and advertise online to potential clients. Many large corporations are based on information systems.

These comprise Alibaba, a business-to-business e-marketplace, Google, a search engine giant that makes the majority of its money from keyword advertising on Internet research, and eBay, a marketplace that mostly conducts auctions. Amazon is also one of these, with its developing electronic mall and cloud computing services. To offer residents services at a reasonable cost, governments use information systems. Information system comes in handy when supplying digital commodities like ebooks, video products, and software as well as online services like gaming and social networking. Information system conducts most aspects of people’s personal lives.

Components of Information Systems

The information system comprises of five components:

  • Computer Hardware
  • Computer Software
  • Data
  • Telecommunications
  • Human Resources and Procedures

Computer Hardware

Even the smallest businesses and a large number of homes around the world now own or rent computers. People might have several computers in their possession, including tablets, smartphones, and other wearable technology. It includes PCs, hard discs, keyboards, iPads, and other electrical gadgets. The cost of hardware has dropped dramatically, but its performance and capacity have improved tremendously. However, there is currently a great deal of concern about how using hardware would affect the environment. Storage facilities are now provided by the cloud, which connects via telecommunications networks.

Computer Software

System software and application software are two different forms of software. By managing the hardware, application files, and other resources, an operating system, sometimes referred to as system software, enables users to control a computer through a graphical user interface (GUI). Application software is created to manage specific tasks performed by users. To put it simply, system software enables the hardware, whereas application software manages certain tasks.

Microsoft Windows is an illustration of the system software, whereas Microsoft Excel is an illustration of application software.

To address their unique demands, large businesses may use licenced programmes created and maintained by software development firms. The programme may be both open source and proprietary, and it may be freely usable online.


The collection of facts that make up data makes it meaningless on its own, but when it is gathered and organised, it can be a very effective tool for corporate operations. Businesses gather all the data and employ it in decision-making so that the efficacy of their operations may be evaluated. The managerial and operational tasks of an organisation are supported by databases.

Big data is a broad endeavour that refers to the massive collecting and processing of quantitative, or structured, data as well as textual data that is frequently obtained online.

Making judgements based on the information provided by big data might have numerous advantages.

Examples include the practice of evidence-based medicine, the conservation of resources as a result of eliminating waste, and the suggestion of novel products (like literature or films) to a user’s preferences. Big data supports new business models.

For instance, a business might crowdsource (gather data from a large number of independent persons) the cost of its products using smartphones all over the entire globe. To make decisions more quickly than was previously feasible, the aggregated data provides earlier insights into price fluctuations.


Connecting to a computer system or other devices through telecommunication allows for the dissemination of information. Either cable or wireless methods can be used to set up the network. Radio waves and microwaves are examples of wireless technologies, whereas fibre optics and coaxial cable are examples of wired technology. Mobile computing is supported by wireless technologies, which are primarily based on radio waves and microwaves.

There are billions of computers connected to the Internet, which is a network of networks spanning every continent. Users can connect with other people, including co-workers, clients, friends, and people who have similar interests to their own or their professions, as well as information resources, such as vast databases, through networking.

Different intranets that are accessed through a browser can offer internet-like services to an organisation and for its exclusive use; For instance, a common corporate documentation base could be accessed through an intranet. Extranets are created as so-called virtual private networks (VPNs) by encrypting the messages to connect with business partners over the Internet privately and securely.

Human Resources and Procedures

Any information system needs qualified individuals to function properly. The technical workforce consists of managers for development and operations, business analysts, systems analysts and designers, database administrators, programmers, computer operators, and computer security experts. Additionally, all employees inside a company need to be instructed on how to make the best use of information system capabilities. While using the Internet, billions of individuals all around the globe are learning about information systems.

The paperwork for an information system includes instructions for how to use, run, and maintain it. For instance, it is necessary to create protocols for running payroll programmes, including when to run them, who has permission to do so, and who can see the output. As part of the autonomous computing programme, data centres operate more and more independently thanks to procedures that are built into the software that manages them.

Here are the six main categories of Information Systems. The following six information systems, each of which supports a different organisational level, are common among businesses and organisations, however, this list is not exhaustive.

information system

Types of Information Systems:

An excellent place to start is with the operational-level transaction processing systems (TPS). The following two systems, which also function at the level of comprehension, are known as knowledge work systems (KWS) and office automation systems (OAS). We continue with the executive support systems (ESS) at the strategic level before moving on to the management level’s management information systems (MIS) and decision support systems (DSS). Finally, Geographical Information Systems (GIS) concentrate on geographical elements.

Let’s take a closer look at the many categories of information systems.

Transaction Processing System (TPS)

For organisations to operate on a daily basis, transaction processing is crucial. Any action or occurrence that has an impact on the business is referred to as a transaction, which includes acts like inventory control, withdrawals, shipping, charging clients, and depositing money. These commercial transactions are supported by TPS.

Office Automation System (OAS)

Computers, communication-related technology, and the staff members designated to carry out official activities make up OAS. The OAS supports official activities at all levels of the organisation and covers office transactions. The administrative and managerial tasks that make up the official operations are separated.

Email, voicemail, and word processing are just a few of the programmes that are included in office automation systems.

Knowledge Work System (KWS)

The KWS is a specialised system that quickens the process of creating knowledge and makes certain that the technical expertise and understanding of the company are used properly. The Knowledge Work System aids staff in creating and disseminating more data by using graphic design, communication, and document management tools.

KWS instances include the following:

  • Computer-Aided Design Systems (CAD)
  • monetary workstations
  • Systems for virtual reality

Management Information System (MIS)

Most administrative duties associated with daily operations and performance reviews are performed by middle managers, who also ensure that all work is done in accordance with the specifications of the business. MIS is a very useful tool because of this. Middle managers and supervisors may make judgements, plan ahead, and manage the workflow with the use of management information systems. The MIS gathers transactional data from various TPSs, compiles it, and then shows it in reports and presentations.

These reports can also be generated on a monthly, quarterly, or annual basis, while MIS can offer reports that are more timely. 

Decision Support System (DSS)

An interactive computer-based information system for management that supports managerial decision-making is known as the DSS. Middle managers especially receive the data they need from the Decision Support System to make well-informed decisions.

Different decision models are used by decision support systems to analyse or summarise massive amounts of data into a simple form, making it simpler for managers to compare and interpret data. In many cases, these summaries are presented as graphs and tables.

Executive Support System (ESS)

The ESS and MIS are comparable in how they affect executive-level decision-making. The stakes are larger because of the decisions pertaining to the entire firm. They consequently require more prudence and understanding.

The ESS is more advanced computationally, offers more connectivity choices, and offers more useful display options than the DSS. Executives use ESS to make informed decisions by utilising internal data that has been compiled from DSS, MIS, and external sources. Systems for executive support are also helpful in monitoring rivals, spotting opportunities, and forecasting trends.

Geographic Information System (GIS)

A computer system known as a geographic information system (GIS) collects, maintains, stores, verifies, analyses, and visualises spatially referenced data pertaining to locations on Earth. It typically evaluates many types of information related to a specific region and displays them on one map, including roadways, vegetation, and settlements. This makes it easier for humans to perceive, analyse, and comprehend spatial patterns, relationships, and geographic context.

GIS offers a framework for analysis and mapping. Making smarter decisions is made possible by looking at and analysing data on maps. Because of this, GIS is widely utilised in science and virtually every business to create maps that exchange information, analyse data, and help solve challenging issues.

Hardware, software, and a database make up a geographic information system (GIS), which also includes data in the form of spreadsheets and tables as well as cartographic, photographic, and digital data.

Geographic information systems are continually developing despite being a new technology itself, but their ultimate objective is to deliver useful intelligence from all kinds of data.

The following are some of the key uses for GIS:

  • The discovery of additional retail locations
  • Power outages are being reported
  • Weather forecasting and prediction
  • Organising in-car navigation systems
information system

Statistics about information systems

We use information technology goods on a daily basis. Here are some information systems-related facts.

Essential for business expansion

Every organisation engages in computer-related activities that are essential to completing the task. To accomplish a company’s goals, computer software may be required, network architecture may need to be implemented, or apps, websites, or games may need to be designed. Therefore, any business that wants to ensure its future must have a well-designed information system.

More effective accessibility and retention of information

A similar system is helpful for keeping track of operational information, paperwork, communication logs, and histories. Information systems can be quite useful in this because manually entering data might take a lot of time. Information systems store data in an advanced manner that greatly simplifies the process of retrieving the data.

Improved judgement

A business’s decision-making process is aided by information systems. Making smarter judgements is made simpler with an information system that delivers all the crucial facts. Additionally, an information system enables efficient communication among staff. It is simpler to distribute and access the documents with the staff because they are organised into folders.

Information technology (IT) employment may be of interest to you given your recent reading on information systems. To provide you with a better understanding of the world of IT, we have gathered some material.

Pursuing an IT career

It should come as no surprise that an IT career will enable one to expand greatly over the next few years. It is regarded as one of the industries with the highest salaries. A fantastic opportunity exists for ambitious and hard-working individuals since there is a continuing need for competent experts with the necessary skills to meet the demands of the IT business.

However, drive and effort are insufficient on their own. Being successful in such a specialised industry requires having solid basics, a creative mentality, and great communication skills.

Benefits and Drawbacks of Information Systems

Perks of an Information System

1) Information preservation and security

Information systems’ storage components are designed to gather and keep massive amounts of data for a prolonged timeframe. Users get accessibility to these data whenever they require it. The integrity of the business depends heavily on ensuring the safety of firm records. Additionally, robust security can thwart hackers. Even the virtual vault restricts the destruction or loss of electronic data in the event of a system failure.

2) Increased effectiveness and output

Today, the majority of firms rely heavily on information technologies to boost production and efficiency. It is possible to finish more work faster thanks to automated methods. As a result, the staff are able to manage a bigger work burden with greater precision, effectiveness, and minimal human negligence. The computer completes a variety of jobs. The staff will benefit from having more time and freedom as a result, which will enable them to work more effectively on other initiatives.

3) Improved communication

Both interpersonal and professional relationships depend heavily on communication. The success of a business greatly depends on communication between managers and staff as well as between staff and customers. It is simpler to transmit ideas and information thanks to telecommunication methods like emails, faxes, and video conferencing.

4) Lower risk of mistakes

Automated procedures are used by information systems to provide users with the most precise data necessary to carry out a task. It would be more accurate to say that every step—from input to organisation, storage, processing, and output—is carried out with extreme accuracy.

It is possible to reduce unnecessary human inaccuracy in manual operations.

The Information System’s drawbacks

1) Exorbitant

At the most fundamental level, certain technologies, hardware, tools, and communication methods demand high costs. Secondly, the information system’s installation may be quite expensive. These kinds of equipment also need to be maintained and repaired on a regular basis. There are additional expenditures connected with modernizing and modifying the hardware, software, and other elements. In addition to the technical component, people should be recruited and paid to operate the system. These individuals need to be retrained, which costs money.

2) Security lapses

With regard to digital data, security issues are fairly prevalent. Along with technology, hackers are continually updating and improving. In addition to the technical component, people should be recruited and paid to operate the system.

With regard to digital data, security issues are fairly prevalent.

In order to defend potential risks to the privacy of their sensitive information, firms must always have a security expert on board.

Therefore, in order for businesses to function properly, they are making an effort to consolidate jobs in order to reduce the number of employees. This interferes with the system’s effective operation, resulting in disgruntled consumers and other problems for the company.

3) Decrease in Employment 

As tasks are accomplished swiftly and effectively with the aid of an information system, workers have more free time. Hence, in order for businesses to function properly, they are making an effort to consolidate jobs in order to reduce the number of employees. In some instances, machines are taking jobs away from people by substituting human labour.

Comparing manual VS computerised information systems

Information System Manual

The traditional type of information system that doesn’t use any automated or electronic technologies is called a manual information system. All tasks, including data recording, storage, analysis, and retrieval, are carried out manually, or by employees.

Even though manual operations take time, this technique is substantially less costly because no additional expensive machinery is required; activities may be completed with basic tools like a pen and a piece of paper. In contrast to a computerised system, it is far more adaptable.

However, this type of information system has certain significant shortcomings that have decreased its acceptance and use, including:

  • vulnerable to mistakes
  • not being accurate
  • absence of security information
  • duplication of data leading to a discrepancy
  • absence of backups, resulting in lost or corrupted files

Computerized Information System

Technology advancements led to the creation of computerised information systems, which were designed to address the shortcomings of manual information systems. Here, information technologies are recorded, stored, analysed, and retrieved using a combination of people, processes, hardware, software, databases, and communication networks.

However, the cost of purchasing and configuring the hardware for computerised information systems might be high. They require additional fees for upkeep, repairs, and updates. Additionally, training for using the computer and other devices is necessary for the personnel. The entire process can stop until the malfunctioning component is replaced if any aspect of the computerised system stops working, making it impossible to retrieve the information. Despite security precautions, Even with sufficient controls and checks, there is still a danger of fraud.


By empowering relatively low employees with higher decision-making power and giving managers the knowledge they need to manage bigger teams of employees, information technology can help organisations have fewer layers of management.

A corporation can more easily achieve its goals when it has access to information about what’s working and what needs to be changed.

An information system helps businesses define both long-term objectives and short-term benchmarks

The organisation can create something amazing with the least amount of effort and complexity by breaking down projects into manageable milestones.

New forms of collaboration for organisations, groups, and people have emerged thanks to modern technologies.


01. What is the significance of information systems?

Ans. Storage of operational data, communication logs, documents, and modification histories can be done with the help of information systems. The organisation will spend a lot of time searching for certain data if manual data storage is used.

02. What kind of information system is the most crucial?

Ans. The most essential and fundamental level of information systems for a commercial organisation are transaction processing systems. This is due to the fact that transaction processing systems are frequently the initial stage in gathering fundamental information that is then used by upper management to make wiser organisational choices.

03. What effect do information systems have on organisations?

Ans. By empowering relatively low employees with greater judgement call power and enabling managers the knowledge they need to manage bigger teams of employees, information technology can help organisations have fewer layers of management.

04. How do information systems function?

Ans. A company’s environment and its surroundings are both covered by an information system. The information that companies require is produced by three fundamental processes: input, processing, and output. Feedback is the output that is sent to the right individuals or groups inside an organisation so they can assess and improve the input.

05. What are the information system’s five primary purposes?

Ans. Fundamentally, an information system is composed of the following five elements: hardware, software, databases, networks, and individuals. This five-part system combines input, processing, outcome, feedback, and control. Hardware includes the Processor, input/output, operating system, and multimedia units.

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