Information systems and Subsystems

23/12/2023 1 By indiafreenotes

Information Systems (IS) are critical components of modern organizations, providing a framework for collecting, processing, storing, and disseminating information. An Information System is a set of interconnected components that work together to manage and process data, facilitating decision-making and organizational activities. Within the broader concept of Information Systems, there are various subsystems that specialize in specific functions, contributing to the overall efficiency and effectiveness of the organization.

An Information System is a coordinated set of components that collect, process, store, and distribute information to support decision-making, coordination, and control within an organization.

Components of Information Systems:

  1. Hardware:

    • Physical devices like computers, servers, and networking equipment.
    • Responsible for data processing and storage.
  2. Software:
    • Programs and applications that instruct the hardware on how to process data.
    • Includes operating systems, databases, and application software.
  3. Data:
    • Raw facts and figures that are processed to generate meaningful information.
    • Stored in databases and other data repositories.
  4. Procedures:
    • Methods and rules for using the Information System effectively.
    • Define how users interact with the system and ensure consistency.
  5. People:
    • Individuals who interact with the Information System.
    • Include users, IT professionals, and system administrators.
  6. Networks:
    • Communication pathways that facilitate data transfer between system components.
    • Can be local area networks (LANs), wide area networks (WANs), or the internet.

Functions of Information Systems:

  1. Data Input:

Capturing and entering data into the system from various sources.

  1. Data Processing:

Manipulating and organizing data to generate meaningful information.

  1. Data Storage:

Saving data for future reference in databases or other storage systems.

  1. Data Output:

Presenting processed information to users in a comprehensible format.

  1. Feedback:

Information about system performance, used to make improvements.

Subsystems within Information Systems:

To understand the complexities of Information Systems, it’s essential to explore the various subsystems that specialize in specific functions. Each subsystem contributes to the overall functioning and efficiency of the Information System.

  1. Transaction Processing System (TPS):

TPS records and processes routine transactions necessary for daily business operations.


  • Capturing and processing transactions in real-time.
  • Maintaining a record of transactions for future reference.
  • Ensuring data integrity and accuracy.


  • Vital for operational efficiency.
  • Examples include point-of-sale systems and order processing systems.


  • Management Information System (MIS):

MIS provides managers with summarized, organized, and filtered information to support decision-making.


  • Aggregating data to generate reports and dashboards.
  • Facilitating planning and control activities.
  • Supporting middle-level management decisions.


  • Enables managers to make informed decisions.
  • Enhances organizational planning and control.


  1. Decision Support System (DSS):

DSS assists in decision-making by providing interactive and ad-hoc support.


  • Analyzing data to support decision-making processes.
  • Providing simulations and scenario analysis.
  • Assisting in complex decision environments.


  • Helps in strategic decision-making.
  • Enhances flexibility and adaptability in decision processes.


  1. Executive Support System (ESS):

ESS provides top-level executives with information to aid strategic decision-making.


  • Offering a strategic view of organizational performance.
  • Monitoring external factors affecting the organization.
  • Supporting long-term planning.


  • Critical for strategic planning at the executive level.
  • Provides insights into the external environment.


  1. Office Automation System (OAS):

OAS automates routine office operations and facilitates communication.


  • Automating document creation and processing.
  • Facilitating communication through email and collaboration tools.
  • Supporting administrative tasks.


  • Enhances office efficiency and reduces manual workload.
  • Streamlines communication within the organization.


  1. Enterprise Resource Planning (ERP) System:

ERP integrates core business processes and functions across an organization.


  • Centralizing data and processes in a unified system.
  • Supporting multiple departments with a common database.
  • Enhancing coordination and collaboration.


  • Ensures consistency in data and processes.
  • Streamlines cross-functional workflows.


  1. Knowledge Management System (KMS):

KMS manages and facilitates the creation, storage, and distribution of organizational knowledge.


  • Capturing, organizing, and storing knowledge assets.
  • Facilitating knowledge sharing and collaboration.
  • Supporting learning and innovation.


  • Fosters a culture of continuous learning.
  • Preserves and leverages organizational knowledge.


  1. Customer Relationship Management (CRM) System:

CRM manages interactions and relationships with customers.


  • Storing customer information and interactions.
  • Facilitating personalized communication.
  • Supporting sales and customer service.


  • Improves customer satisfaction and loyalty.
  • Enhances customer interactions and engagement.


  1. Supply Chain Management (SCM) System:

SCM manages the flow of goods, services, and information across the supply chain.


  • Optimizing inventory levels and order fulfillment.
  • Coordinating logistics and transportation.
  • Enhancing collaboration with suppliers and distributors.


  • Improves efficiency in the supply chain.
  • Reduces costs and enhances responsiveness.


  1. Business Intelligence (BI) System:

BI systems analyze and present business data to support decision-making.


  • Extracting, transforming, and loading data for analysis.
  • Creating reports, dashboards, and data visualizations.
  • Facilitating data-driven decision-making.


  • Provides insights into business performance.
  • Supports strategic and tactical decision-making.

Roles of Subsystems in Organizational Success:

  1. Operational Efficiency:

TPS ensures smooth and efficient day-to-day operations, reducing manual effort and errors.

  1. Strategic Decision-Making:

DSS, ESS, and BI systems provide critical information for strategic decision-making, enabling organizations to stay competitive.

  1. Knowledge Sharing and Innovation:

KMS fosters a culture of knowledge sharing, supporting innovation and continuous improvement.

  1. Customer Satisfaction:

CRM systems contribute to improved customer satisfaction by providing personalized and efficient services.

  1. Supply Chain Optimization:

SCM systems enhance the efficiency and responsiveness of the supply chain, reducing costs and improving overall performance.

  1. CrossFunctional Collaboration:

ERP systems promote collaboration and coordination across different departments, ensuring consistency in processes.

  1. Data-Driven Operations:

BI systems empower organizations to make data-driven decisions, leading to improved efficiency and effectiveness.

  1. Communication and Collaboration:

OAS facilitates streamlined communication and collaboration, improving overall organizational efficiency.

  1. Strategic Planning:

MIS provides critical information for middle-level managers to plan and control organizational activities effectively.

  1. Executive Decision Support:

ESS systems provide top-level executives with insights into the external environment, supporting long-term strategic planning.