What Are Information Systems? - Definition & Types

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  • 0:01 What Is an Information System?
  • 0:34 General Purpose vs.…
  • 1:48 Typical Components of…
  • 2:40 Different Types
  • 4:12 Lesson Summary
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Lesson Transcript
Instructor
Paul Zandbergen

Paul is a GIS professor at Vancouver Island U, has a PhD from U of British Columbia, and has taught stats and programming for 15 years.

Expert Contributor
Steven Scalia

Steven completed a Graduate Degree is Chartered Accountancy at Concordia University. He has performed as Teacher's Assistant and Assistant Lecturer in University.

An information system is software that helps you organize and analyze data. This makes it possible to answer questions and solve problems relevant to the mission of an organization.

What is an Information System?

Many organizations work with large amounts of data. Data are basic values or facts and are organized in a database. Many people think of data as synonymous with information; however, information actually consists of data that has been organized to help answers questions and to solve problems. An information system is defined as the software that helps organize and analyze data. So, the purpose of an information system is to turn raw data into useful information that can be used for decision making in an organization.

General Purpose vs. Specialized Information Systems

There are some general types of information systems. For example, a database management system (DBMS) is a combination of software and data that makes it possible to organize and analyze data. DBMS software is typically not designed to work with a specific organization or a specific type of analysis. Rather, it is a general-purpose information system. Another example is an electronic spreadsheet. This is a tool for basic data analysis based on formulas that define relationships among the data. For example, you can use a spreadsheet to calculate averages for a set of values or to plot the trend of a value over time.

In contrast, there are a number of specialized information systems that have been specifically designed to support a particular process within an organization or to carry out very specific analysis tasks. For example, enterprise resource planning (ERP) is an information system used to integrate the management of all internal and external information across an entire organization. Another example is a geographic information system (GIS), which is used to manage and analyze all types of geographical data. Expert systems are another example of information systems. An experts system is designed to solve complex problems by following the reasoning of an expert.

Typical Components of Information Systems

While information systems may differ in how they are used within an organization, they typically contain the following components:

  1. Hardware: Computer-based information systems use computer hardware, such as processors, monitors, keyboard and printers.
  2. Software: These are the programs used to organize, process and analyze data.
  3. Databases: Information systems work with data, organized into tables and files.
  4. Network: Different elements need to be connected to each other, especially if many different people in an organization use the same information system.
  5. Procedures: These describe how specific data are processed and analyzed in order to get the answers for which the information system is designed.

The first four components are part of the general information technology (IT) of an organization. Procedures, the fifth component, are very specific to the information needed to answer a specific question.

Different Types

The many different types of information systems can be divided into categories based on where they are used in the hierarchy of an organization.

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Additional Activities

Information Systems - A Business Case

The following business case will allow you to put your knowledge of information systems into practice in a real-life corporate context.

Here, you're the head of information technology at PhunkyCars, Inc., a car part reseller. You receive a call from the board of directors, in which you're asked to attend their next meeting to explain how the different types of information systems can be used to optimize a business' operations. The board member who called provided you with a list of tasks and needs (presented below) that he has been told can be optimized by using information systems. He specifically wants to know the type of information system required for each task so that the board can assess whether an investment in information systems is warranted.

Task/Need
PhunkyCars purchases hundreds of spare parts every day from multiple sellers and currently records these purchases in a paper journal.
PhunkyCars's employees record their time using pen and paper, where every form is signed by managers daily.
PhunkyCars wants to be notified when its goods sold have been delivered to customers by the courier.
PhunkyCars sells multiple spare parts to customers every day and records these sales in an offline excel spreadsheet.
PhunkyCars wants to know if they should expand to Canada.
PhunkyCars wants to keep track of customers who have paid their balances owed versus those who have not.

Required:

Identify which type of information system is required for each of these tasks/needs.


Solution:

Task/NeedInformation System Type
PhunkyCars purchases hundreds of spare parts every day from multiple sellers and currently records these purchases in a paper journal.Transaction processing system
PhunkyCars's employees record their time using pen and paper, where every form is signed by managers daily.Management information systems
PhunkyCars wants to be notified when its goods sold have been delivered to customers by the courier.Decision support systems
PhunkyCars sells multiple spare parts to customers every day and records these sales in an offline excel spreadsheet.Transaction processing system
PhunkyCars wants to know if they should expand to Canada.Executive information systems
PhunkyCars wants to keep track of customers who have paid their balances owed versus those who have not.Management information systems

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