Information Systems and its Types in Business

Question :

This assessment will cover following questions:

  • What role does enterprise resource planning plays in managing the overall information in an organisation?
  • Describe various types of information systems that are useful in business?
  • How does ERP system is associated with the enhancement of dissemination capabilities of business?
Answer :


Information System is an integrated set of component for storing, collecting and processing data and for rendering knowledge, information & the digital product. Companies and business firms rely on the information system for carrying out and managing operations, interacting with the suppliers and consumer, competing in the marketplace. Information system are helpful for running inter organizational chain. The various corporations use information system for processing financial account, to managing the human resource and to reaching the potential consumer through online promotions (Kramer, 2017). There are many types of information system that can be used by companies for managing and controlling their operational and functional activities throughout business process. In the above study it has been discussed the ERP system which is one of the type of business information system. Enterprise Resource Planning is procedure which is utilized by organization for managing and integrating essential part of the business. It consists of multiple software modules for enterprise which are individually purchased, based on what is appropriate for meeting the special needs and the technical capabilities of company.

The aim of the essay is to discuss the various category of information system. Further explaining the Enterprise Resource Planning (ERP) system. The report ends with the determination of several benefits of this system in businesses with recommendation upon it. The objective of the easy to analyze the information systems types and learning about ERP system and knowing its benefits and advantages to the organizations.


Types of Information System-

 An information system is set of interlinked component which works together for processing, collecting, storing and breakdown information for supporting the decision-making. A typical company is categorized into middle, operational and the upper level. There are number of the information system which supports each level in the company.

There are various types of information system which are explained below-

Transaction Processing System (TPS)-

It is basically for keeping record that is needed in any company for conducting business. For example- The entry of sales order, shipping records and payroll etc (Shintre and, 2019). Transaction processing system is utilized for generation of periodic report in the scheduled manner. It is helpful for producing the report on demand along with exception report.

Decision Support System (DSS)-

This system serves with the management of company. The DSS has sophisticated tool for data analysis, that assist and support every aspect of the problem specific for decision-making. The external data source has been utilized by DSS that can be current stock price for enhancing decision-making. DSS is utilized when problem is so complex and information is required for making appropriate decision which is difficult for using and obtaining. It is helpful for an organization in appropriate process of decision-making and do not make any of the decision.

Executive Information System (EIS)-

This system is also known as Executive Support System. It is used by senior manager of company. It is very easy to use and thus can be operated without any guidance. Through this they could do trend analysis, reporting for exception and drill-downing capability. This has on-line analysis tool, and they access with wide range of the external and internal data. The result are generally represented in the graphics form which are tailored to executive's need for information.

Management Information System (MIS)-

This system render management daily summary of the basic operation within company. The important services are recorded by TPS of company and MIS consolidate data on the production, sale etc. It provides the routine information to decision maker and manager (Smith and Smith, 2020). This is helpful in enhancing the operational efficiency of the company. This system may support production, marketing and finance etc.

Enterprise Resource Planning (ERP)-

It is the process of business management software which allows a company for using system of the integrated program which is capable for managing an organization's important business operation for the overall global organizations and multi sites.

Workflow System-

 It is the rule based system of management which coordinate, direct and monitor execution of interlinked set of the task which are arranged for developing the business process. It is based on internet and can be linked or combined with e-mail. There are three type of workflow system which are Administrative, Ad-hoc and Production workflow system. It is also based on the server architecture which may be utilized file server or data base.

Expert system-

 This system had an ability for making suggestion and acting like expert in the particular field of company (Holsapple, Sena and Wagner, 2019). The expert system has extensive knowledge base for and organization.

ERP System-

Enterprise Resource Planning (ERP) is the modular system software which is designed for integrating major functional area of company's process of business into the unified system. The ERP system contains core components of software which also known as module, which focus on the important areas of business that are HR, accounting, management, material, production, supply chain management and customer relationship management (Choudary, Rao and Kumar, 2019). The organization could choose the modular by analyzing which one is best for their business. An ERP system integrates and automates core process of decision that are collecting ordered from customer, operation scheduling and maintaining financial data and records for inventory. It has multiple benefits which help overall performance of business and its management for any company by rendering visibility, intelligence, efficiency and analytics within every business aspects (Ripamonti and Galuppo, 2016). The ERP system eliminate duplication of data and render the integrity of data through single source of the truth. It is critical for managing thousand of business for each size and every industry. ERP ensures that the data attribute and field roll up to appropriate account in organization' general ledger through which all cost are represented and tracked properly.

This system connects various computer system for company together. With the help of this system, every department has their system, but this system could be accessed through single application with single interface. It allows various department for communicating and sharing information easily across the company. This gathers information about activities and the state of various division, making this information available to another part, where this could be utilized productively. ERP system is helpful for company to become more self-aware by interlinking information about finance, production, human resource and distribution all together (Hassan and Mouakket, 2018). It connects various technologies which are utilized by every part of business, this application eliminates costly incompatible and duplicate technology. This process integrates accounts payable, control system of stock, monitoring system for ordering and the consumer database into single system. There are three kinds of ERP implementations which are cloud, hybrid and on premise such as with the platforms as a service (PaaS) and the infrastructure as a service (IaaS). Although this system has been associated with the monolithic, expensive, end-to-end implementation, easier development through cloud version, that SMBs are gathering advantage of in huge number. The ERP system rely on the centralized relational database that collect information of business and store them into the tables. Storing the data centrally let end users, that are from sales, finance and another department for quickly accessing desired information & knowledge for the analysis. Instead of the employee in various department managing their own report and spreadsheet, this system allows reporting is to be generated through one, centralized system (Chatzoglou and, 2016). The information has to be updated in single model of ERP that are HR, CRM and finance that is sent to the central shared database. The proper information in central database is further shared to another module. 

Benefits of the ERP System-

There are many benefits which are associated with the company by using this ERP system into their business. This is described below-

Reduce cost and save money-

This ERP system is helpful for a company to reduce their operational and administrative cost by automated process. It allows user for pro-actively managing operation and prevention of delays. As there is cut in the operational cost then there is cut in capital outlay. The ERP system let business to run at lower cost. The waste across company could be reduced within company and the inventory efficiency can also be maximized.

Streamlined Business operations and processes-

The data is available in centralized location through completer visibility within all functionalities. This system allows a company to automate their business process. The operation and production could be monitored by decision maker in real-time (Pohludka, Stverkova and Åšlusarczyk, 2018). Several tracking processes could be automated and accurately maintain and determined the level of inventory.

Optimization of supply chain-

The robust ERP system let the real time visibility of the companies supply chan and another process for making it easier for the decision maker for getting a wide view of the supply chain, reducing planning cycle and placing at top on the scheduling of production.

Improving the consumer satisfaction, relation and services-

The implementation of this system solution helps company to produce appropriate product at right time. Through this they ensure accuracy by rendering and providing of the needs & demands of consumers. On time delivery of goods and services is very critical for maintaining the consumer services and retention.

Digitally transform the business with flexibility and mobility-

As long as business would grow the ERP system will enhance and adapt for catering for the changing needs and demand. Gaining better control over the business through choice of development whether it is on the premise, on Mobile App (Mobile ERP), in cloud (cloud ERP).

Enhance competitiveness across Industry Built System-

An company with built ERP solutions allows for the configuration to suit company's need by adopting a particular requirement in the business (Leyh,  2016). An organization could easily gain competitive advantage through compliance, agility and ability for expanding and adapting with the little to no downtime.


An ERP system is very helpful for a organization to perform their business activities well. The cost of the operation and administrative could be saved with the help of this system. Through this system an organization could manage and control the management and production within the company. This is helpful in boosting up the efficiencies in company through automating the data collection. The ERP system enable growth in business by managing and controlling the business increasingly complex process of business. An organization can lower the risk through better compliance among every department. It fosters the collaboration by utilizing data sharing and the integrated information into the business operation and administration helps company to great extent. This system renders better business intelligence and consumer services capabilities which helps them to run their business smoothly and gains huge consumer loyalty base for company. The ERP system is helpful for company to improve and upgrade their supply chain management through their business processes greatly. This let everyone in company to perform good with less resources and gain huge productivity through this. The fast-track businesses & financial reporting, easily shared result helps company to act on the insights and enhance their performance in real-time. Company could further maximize visibility into the business and control, ensuring compliance through regulatory requirement so that they can predict the risk within the business and prevent if there is any risk further. This is helpful for an organization to achieve overall goal and objective of company by satisfying their consumer and maintaining a good relationship with them. Satisfied consumer will always stay with them for long term. With the help of efficient operation and access to the real-time data's a company could quickly react and identify to the upcoming & new opportunities.

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