Types of Information Systems

They can be classified in many ways. The first approach will be to classify them by their purpose and scope.

The Scope of Information Systems

IS can be distinguished by how broadly they are used. Individual information systems target a single person in the organization. Often, someone with a unique information need creates an individual IS for his or her own use.

For example, a sales manager at a hotel might create a spreadsheet that helps her forecast the demand for conference room space based on historical trends and patterns at her hotel. The bookmarks, or favourites list that you’ve created for your Web browser could be considered a type of individual IS. Although individual IS might use information that others in the organization create or collect and might feed information into systems with a wider s scope, they are intended to be used by an individual in the performance of his or her job.

Functional IS or departmental information systems address the needs of individual functions or departments. Examples of such systems include accounting systems, sales management systems, order entry systems, warehouse management systems. Functional systems may stand alone or be part of a more comprehensive enterprise IS.

The word enterprise means a partnership, corporation, association, union or any group of individuals working together as an organization. Enterprise IS fully integrate the functions of a company or enterprise and provide a single, comprehensive repository for its information. On the transaction processing side, eg, when a customer orders a product, an enterprise IS might arrange for the product to be pulled from inventory, shipped, and invoiced to the customer. If necessary, it might arrange for replacements to be manufactured, which could also require the ordering of supplies. Accounting entries would also be made when appropriate. Because an activity in any part of a company typically affects other parts, companies use enterprise IS to coordinate all processes and update all affected data. On the management support side, enterprise IS include tools to analyze corporate-wide data and evaluate the overall effect of changes in one part of the company. Eg, managers can analyze alternative manufacturing plans to determine their impact on staffing, cost, quality, availability of supplies, and ability to meet demand.

Inter-organizational IS are those that provide a common point of interaction and common repository of information for a company, its suppliers, distributors, customers and/or shippers. Sometimes even competitors are included to a limited extent.

Humana, a health-care organization, based in Louisville, Kentucky, boasts approximately 6.5 million members in 18 states and Puerto Rico. Humana is testing an inter-organizational IS that allows doctors, patients and administrators to share data, such as claims status and prescription history, and to automate certain functions such as plan authorization. Humana expects the system to save money, improve execution, and attract both customers and providers.