Information System consists of physical components like hardware, software, database, procedures and people operating these components which interact to support the operational, managerial, and decision-making information needs of an organization. So, an information system is the means by which data flows from one person of department to another. An information system accept data from the user, process this data to produce information and achieve knowledge.
Data is a collection of facts, figures, statistics which can be processed to produce meaningful information. A process involves collecting, capturing, sifting, rearranging, calculating, comparing, decision-making, storing, retrieving, reproducing and transporting of data. Information is processed data. It refers to facts, figures or statistics that have meaning. It can become data or input for another process. Information which is known and verified is knowledge and this knowledge which is relevant and useful in any given situation which anticipate events helps the business move in the right direction taking the correct decision at the right points in time is known as business intelligence.
Types of Information Systems
The types of Information Systems are Data Processing System (DPS), Management Information System (MIS), Decision Support System (DSS) and Expert System. The data being processed in each of these systems may be done using Batch Processing Systems, On-line Systems, Real-time Systems and Distributed Systems.A data processing system process large amount of data for routine business transactions; they run a series of programs on an automatic basis at regular intervals. E.g. Payroll, Accounts, inventory.
Management Information Systems (MIS) provide reports or generate information for planning, control and decision making. They use a shared database. E.g. Estimation software for civil engineers. Decision Support Systems (DSS) differs from MIS in that it emphasizes more on decision making in all levels. It provided ad hoc (as and when required) decision reports. E.g. Business software integrating all modules payroll, accounts, inventory which helps the top management to take decision based on the business intelligence gained. In Expert System decisions are taken by the computer itself, it captures and uses the knowledge of an expert for solving a particular problem. An expert system selects the best solution available to a problem or a specific class of problems. E.g. Judicial System, medical system.
In batch processing system data are gathered from time to time and collected into groups or batches before they are entered in to the computer for processing. In On-line System data is entered online and each data is processes immediately. Real Time Processing System is same as on-line system but output is generated fast and efficiently enough to influence on going activity. But on-line system need not be real-time system. And, in Distributed System processing is shared by several independent processors at different locations in a network.
An organization may consist of many business systems and information systems is a subsystem of the business.