Types of information systems used in business
Different levels of management need different systems: TPS records daily transactions, MIS and DSS support managers, and ESS helps top executives.
How an information system works
- back to Input (data)
An information system is people, procedures, data, hardware, software and networks working together to produce information for decisions.
Types of information systems
| System | Main users | What it does | Example |
|---|---|---|---|
| TPS (transaction processing system) | Operational staff | Records and processes routine daily transactions | POS tills, payroll, ATM withdrawals, bookings |
| MIS (management information system) | Middle managers | Summary and exception reports from TPS data, for routine control | Weekly sales report by branch |
| DSS (decision support system) | Managers and analysts | Interactive models and what-if analysis for semi-structured decisions | Choosing where to open a new branch; pricing |
| ESS (executive support system) | Top executives | Dashboards of key internal and external figures for strategic decisions | A director's dashboard of group profit and market share |
| Office and knowledge work systems | Clerks and professionals | Documents, email, scheduling, design tools | Word processing, video meetings |
| Expert system | Staff needing specialist advice | Gives advice using rules collected from human experts | Loan approval checks, fault diagnosis |
Decisions at each level
| Level | Kind of decision | Main system |
|---|---|---|
| Top (strategic) | Long-term and unstructured, e.g. enter a new market | ESS |
| Middle (tactical) | Medium-term and semi-structured, e.g. set a regional budget | MIS, DSS |
| Operational | Daily, routine and structured, e.g. reorder stock | TPS |
Enterprise-wide systems
In a Sri Lankan supermarket chain, each till is part of a TPS; branch managers get MIS reports of daily sales; a DSS helps decide where to open the next outlet; and directors follow group results on an ESS dashboard.
Short answer: “What is a transaction processing system (TPS)?” A system that records and processes the routine daily transactions of a business, e.g. sales at a POS till or payroll.
Structured question: “Distinguish between an MIS and a DSS.” MIS gives routine summary reports for structured control decisions. DSS gives interactive what-if models for semi-structured decisions.
Essay: “Explain the types of information systems used at different levels of a business organisation.” Define an IS and its components, draw the pyramid, then explain TPS, MIS, DSS and ESS with users and examples, plus ERP, CRM and SCM.
Pyramid from the bottom: 'The Manager Decides Everything' = TPS, MIS, DSS, ESS.