Types of Information Systems in a Business Organization

In the digital era that dominates most modern industries, information systems play a vital role in providing managers, supervisors, and rank-and-file employees with the tools they need to be more efficient, more productive and more customer-focused. Network information systems enable businesses to not only share knowledge but also to draw from the same data, so that operational processes are uniform throughout every department.

Daily transactions are the lifeblood of many small businesses, and a transaction processing system allows companies to multiple ways to adjust, modify, store, collect, process and cancel transactions. The most effective transaction-processing systems are stored on hard drives and on cloud storage databases, to ensure that the information is never lost. Data processed through this system include sales, inventory, manufacturing schedules and billing reports.

To make the right business decisions, managers need the data collected by the transaction processing system. Using this data, managers can create reports related to billing processes, payroll, production schedules, and purchasing. This information is valuable because it can help managers determine areas of waste in business operations, as well as areas that could be better exploited. For example, if a sales report indicated sales growth during a specific season, managers could ramp up marketing and production to take advantage of those specific months to maximize revenue.

Customer relationship management systems help quantify and qualify the customer experience, as it relates to a business. CRM systems collect customer behavior such as buying trends, types of customer inquiries, and customer subscription accounts. Each customer interaction with a business can provide valuable information not just about existing customers, but also about prospects that call to inquire about a company's products and services.

Collecting, sharing and storing knowledge is essential for many companies, especially the ones that are in a service industry. Knowledge management systems can help businesses that are experts in a specific field. For example, law firms and accounting firms are founded on the expertise and knowledge of attorneys and CPAs, so these professions would need an efficient knowledge management system that categorizes specific knowledge under specific topics and subjects, and makes them available in easy-to-read spreadsheets, documents, presentations, and even blog articles.

An executive information system helps leaders at the executive level analyze company-wide data to make important decisions about the direction that a business is headed. Rather than simply existing as a database, an executive information system offers very specific information such as graphs, reports, scheduling, cost accounting, and predictive analysis so that executives can quickly make decisions without having to dig for more complete data. For example, with an executive information system in place, the head of a company could make a proactive decision to shift from a pay-per-click marketing strategy to a local marketing strategy that targets competitors in a geographical area based on pricing models. That shift could be triggered by analysis of customer behavior that indicates that sales are growing because customers prefer the company's lower prices compared to that of its competitors.