Key Elements Of Information System Information Technology Essay

The task has been assigned to me by my college which is the ABP awarding body certification requirement. I have completed the assignment after a thorough study of various sources such as books, journals and websites.


Describe the concept of Information Based System in organization.

Describe how Information System works in organization.

Describe the various types of Information Systems by breath of support.

Identify the major Informational Systems that support each organisational level.

Literature Review:

1) Information:

Any raw data that is organized and verified to be accurate and timely for any purpose and presented within a context that gave it meaning and relevance and it leads to increase in understanding and decrease uncertainty.

1.1) Information System:

When people utilize information or organizations by using technologies gather, process, store, use and disseminate information uses.

Information System (IS) is a system that gave the information necessary for managers and management to run an organization effectively. IS and the information it gives are essential components of reasonable business decisions.

Information industries help in providing growth in most economies of business.

Every organization achieved it success on the bases of there information system.

Due to change in technology and globalization of markets many industries are now trying to develop and improve there information system because they emphasizes on there information.

Information system is not just a computer system but information and communication technology play a vital role in helping the organization to fulfill it needs.

Information system refers to the system of people, data and activities both computer-based and manual that effectively gathers, process store and disseminate organization information.

It is important to maintain the information system in organization and adopt new approaches for improvement in the development, use and reviews of IS system with in the organization must be an ongoing process of both bank management and OCC examiners. Every IS have clearly defined framework of guidelines, procedures policies and standards for different organizations. It should be fallowed by any organization for the development of its system and also to maintain and use all information where it necessary.

Information System is used and viewed by all Management Levels.

It helps the organization and supports them in long term strategic goals and objectives.

It helps in financial accounting systems that are used to maintained control on all financial record keeping activities.

Every organization should designed there Information System to achieve the following goals.

Improve communication among employees.

Deliver all complex and important material through out the institution.

Provide a system for recording and processing information.

Reduce all expanses related to labor, material and other activities.

Help in achieving organization strategic goals and objective and provide



a) Customers

b) Retailers

c) Employers





Planning software’s


a) Develop growth

b) Strategy

c) Monitor services

d) Level and cost

Information System

a) Customize Products

b) Interact with customer

c) Exchange ideas and reports

d) Coordinate production with sales

Business Solutions

Increase customer services

Increase revenues

Reduce cost

Business Challenges

Mature Industry

Inefficient Process

Information System provides help and facts for decision making which support and improves overall decision making process.

Information System also improves job performance through out the organization. It also provides help to all level of management. It gives the data and information and helps the management in making strategic decisions. It helps the organization in all activities to monitor, control and distributes information to all employees, customers.

Effective Information system gives up-to-date presentation formats and time frames required by all management levels. Information System can be maintained manual or automated or both combine.

Effective deliveries of an organization products and services are supported by Information system.

These systems be accessible and used at all level of management and organization.

Information System is also helpful in over all risk management strategy.

Information system also help the organization to keep control, measure, monitor, recognize and manages all the activates, risk and Limits.

Risk Management has four key elements.

Policies or practices.

Operational Processes

Staff & Management.

Feed back Devices.

Information system should be both operational and informational. So that management can use it to measure performance, manage resources and help organization with regulatory requirements.

Information system also used to provide effective risk control which helps to maintain proper management and minimize risk through the organization. it also help the organization to make new policies help in practicing these policies provide up to date information in all operational process also help in making assignments duties and responsibilities for staff and managers.

Data used in organization come from many finical records and transaction systems

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and proper control procedures must be setup to help in gathering relevant data and also help in correction of data.

Information system organized and the data is gathered from different equipments i.e mainframes, microcomputer, minicomputer. Processing control help the system on smaller computer and pre defined and also effective as those commonly found on the larger mainframe system.

The OCC fully endorses and supports placing these principles in writing to improve effective communications throughout the organization.

Improving Weakness of Information System Risk.

1.2) Key Elements of Information System:

To work properly and effectively the five key elements should be checked and functioned are: time lines, accuracy, consistency, completeness and relevance.


Information system should be capable of providing distributing information to right users. Information system is capable of providing short and long reports of information.

Information system also helps in processing, collecting and producing results from data.

It also help in making correction, adjustments in errors found in data.


Information System provides control checks in editing balancing.

All the external & internal audit programs done by organization provides the adequacy of internal control.


All the data should be process consistently and uniformly. Variations in data be collected and reported to information analyst. Because data collection and reporting process change over time management must establish procedures to allow systems changes. All the procedures should be documented, willdefind and clearly communicated to all related employees and should include proper effective monitoring system.


All the data and information provided by information system to management level should be complete and checked by all accepts.


All the information must be relevant to organization objectives and strategies. Information that is unnecessary or too detailed should be sorted out.

2) Information System as Bridge:

Information system provides us bridge between management information science and computer science.

Computer science provides information technology software.

Information system brings all human activities and information technology to one place and it provides communication link between these two worlds.

The system well serves the people and organization by using all the IT capabilities.

To run this system properly it requires specialist people having knowledge of both computer world and organization and the people who using these systems.

All the system should work with in the contexts of organization, management and the information society.

To build a bridge like this between the information organization and people we need skills in programming, computer architecture and networks.

Also we need techniques for information system analysis design by using all advance data base design methods and related professional and legal knowledge.

3) Level & Types of Information Systems:

Every business has different information system needs. It also depends upon different levels in organization. Three key information systems are

Transaction processing system

Management Information System

Decision Support Systems

The importance of information is different on different level of management.

The information can categorise as strategic, managerial and operational information.

The information used by senior management for decision making is Strategic information. The lower levels in the organization do not require this information. The information systems that gave information for decision is known as Decision Support Systems.

Figure – Relation of information systems to levels of organization

The information used by the middle line of management is known as managerial information. The information used by middle line management help in making short-term decisions and plans for the organization. Information likes sales analysis or production details for the whole year. Information system is now days the necessity of all organizations to fulfil all the managerial activates. Due to its Importance, most of the big organizations have separate IS departments. Whose duty is to watch the use and proper functioning of the system.

For daily and short term information we need third level of information. It help the operational level to carry out day to day operational activates. it also help in attendance record of employees.

Information System gives information for processing transaction of the organization, that type of information system is known as Transaction Processing System or Data Processing System. For example information provided by such systems are processing of orders, evaluating overdue purchaser orders of marketing and sales departments..

3. a) Transaction Processing Systems:

Transaction Processing System the organization in there business transaction process. Any activity of the organizations can be called Transaction. Every organization has different transaction. For example, take a airline reservation system. Booking, cancelling, etc are all transactions. However, there are some transactions, which are common to almost all organizations.

These include calculation, storage and retrieval.

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Speed and accuracy, can be achieved by TPS and can be programmed to follow routines functions of the organization.

3. b) Information System:

Management takes help in solving problems and making decisions from it. They use transaction processing information and all relevant information also. It process queries as quickly as they arrive. An important element of IS is database.

A database is a collection of data items that can be processed through application programs and available to many users.

3. c) Decision Support System:

These systems help senior management in making long term decisions. With the help of this systems we can handle unstructured or semi structured both decisions. A decision will be unstructured if there are no clear procedures for making the decision.

A decision support system must be easy to operate and also it should be flexible for all users so that they can produce reports by giving data and it should be format according to the situation explained.

4) Level of Management & System:

4 .a) Operational-level Management & System:

This system helps the operational managers by keeping track of the all necessary activities and transactions of the organization. This system is answerable for the routine questions. It provides help in sales, receipts, cash deposits, payroll, credit decisions, and flow of materials.

4 .b) Knowledge-level Management & System:

Support knowledge and data workers in an organisation. The reason of these systems is to help the organisation discover, organise and integrate new and existing knowledge in to the business, and to help control the flow of paperwork. These systems, especially in the form of collaboration tools, workstations, and office systems, are the fastest growing applications in business today.

4 .c) Management-level Systems:

At this level it helps in monitoring, controlling, decision-making, and administrative activities of middle managers. We can get periodic reports rather then information on operation. it also helps in non-routine decision-making, focusing on less-structured decisions for which information requirements are not always clear.

4 .d) Strategic-level Management & System:

Help senior management how to keep control and tack actions on strategic issues and long-term trends, wither it in the organization or related to external environment.

Main reason is to use organisational capability with the changes, and opportunities, occurring in the medium to long term in the external environment.

An organisation must have operational, knowledge, management and strategic level systems for each functional area within the organisation. This would be based on the management model adopted by the organisation, so, while the most commonly-adopted systems structure would simply follow the standard functional model, structures reflecting bureaucratic, product and matrix models are also possible.

As identified before, enterprise level information systems attempt to encompass the whole organisation in one system.

Type of systems

Executive support System (ESS)

Strategic- Level System

5 years

Sales trend forecasting

5 years

Operation Plan

5 years

Budget forecasting

Profit Planning

Man power Planning

Management Information system (MIS)

Decision Support System (DSS)

Management Level System

Sales Management

Inventory control

Annual Budgeting

Capital investment Analysis

Relocation analysis

Salas region Analysis

Production Scheduling

Cost analysis



Contract cost Analysing

Knowledge work system (KWS)

Office Automation System (OAS)

Knowledge Level System

Engineering Workstation

Graphic work station

Managerial Workstation

Word Processing

Document Imaging

Electronic Calendar

Transaction processing System (TPS)

Operation Level System

Machine Control

Security Trading



Order Tracking

Plant Scheduling

Acc Payable

Training & Development

Order Processing

Material Movement Control

Cash Management

Acc Receivable

Employee record Keeping

Sales & marketing




Human Resource

Characteristic Of Information Processing System

Type of System

Information Inputs


Information Outputs



Aggregate data:

Internal, external

Graphics; simulations; interactive

Projections; responses to queries

Senior managers


Low Volume data or massive database optimised for data analysis; analytic models and data tools

Interactive; simulations, analysis

Special reports; decision analysis response to queries

Professionals; staff Manager


Summary transaction data; high-volume data; simple models

Routine reports; Simple models; low-level analysis

Summary & exception reports

Middle managers


Design specifications Knowledge base

Modelling; simulations

Models; graphics

Professionals Technical staff


Documents Schedules

|Document management; Scheduling Communication

Documents; schedules; mails

Clerical Workers


Transactions events

Sorting; Listing; Merging; Updating

Detailed reports; lists; summaries

Operations personnel supervisors

5) Working of Management & Systems

5.a) Operational-level Management

Transaction-Processing Systems:

Basic business system

Perform daily routine transactions necessary for business functions.

All the tasks, resources and goals are highly structured at operational level.

Generally, five functional categories are identified, as shown in the diagram.

Type of TPS System

Sales/Marketing System

Manufacturing/Production Systems

Finance/Accounting system

Human Resource System

Other Types(e.g. , University)

Major Functions of System

Sales Management

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Market research



New Products







General Ledger


Cost accounting

Personal records



Labour relations



Grade records

Course records


Major application Systems

Sales order information system

Market research system

Pricing system

Materials resource

Planning systems

Purchase order

Control Systems

Engineering Systems

Quality Control System

General ledger

Acc Receivables/Payable


Funds management systems


Employee records

Benefit system

Career Path system

Registration System,

Student Transcript System,

Curriculum Class control System,

Alumni benefactor system

5 .b) Knowledge-level Management

Office Automation Systems:

Targeted at meeting the knowledge needs of data workers within the organisation

Data workers tend to process rather than create information. Primarily involved in information use, manipulation or dissemination.

Typical OAS handle and manage documents, scheduling and communication.

Knowledge Work Systems:

Targeted at meeting the knowledge needs of knowledge workers within the organisation

In general, knowledge workers hold degree-level professional qualifications (e.g. engineers, scientists, lawyers), their jobs consist primarily in creating new information and knowledge

5 .c) Management-level Systems

Management Information Systems:

Typically these systems focus entirely on internal events, providing the information for short-term planning and decision making.

MIS summarise and report on the basic operations of the organisation, dependent on the underlying TPS for their data.

Transaction Processing System

Order file


Master File

Accounting File

Order processing System

Material resource planning system

Genera Ledger System

Management Information System


MIS Files

Sales Data

Unit Product

Cost |Data

Product Change


Expanses Data



5 .d) Strategic-level Management

Decision-Support Systems:

As MIS, these serve the needs of the management level of the organisation

Focus on helping managers make decisions that are semi-structured, unique, or rapidly changing, and not easily specified in advance

Use internal information from TPS and MIS, but also information from external sources

Must provide user-friendly, interactive tools.

Fuel consumption cost file

Port Expenses File

Ship Charter Hire History Cost File

Port distance Restriction File

Ship File (e.g speed capacity)

Analytical Model Data Base




Executive Support & Information Systems:

Serve the strategic level of the organisation

It provides generalised computing and communications environment, rather than providing any fixed application or specific capability. Such systems are not designed to solve specific problems, but to tackle a changing array of problems

It is structured to incorporate data about external events, such as new tax laws or competitors, and also draw summarised information from internal MIS and DSS

These systems filter, compress, and track critical data, emphasising the reduction of time and effort required to obtain information useful to executive management

It employ advanced graphics software to provide highly visual and easy-to-use representations of complex information and current trends, but they tend not to provide analytical models

Knowledge System

(KW|S & OAS)

Management System


Transaction Processing System


Management System


Executive Support System (ESS)

Inter-relationships and inter-dependencies between IS types

Success Story of one of organization (Air Asia)

Using Information System

Air Asia Airline Company that entered a formerly hunting market with great success.

Ticket less travel

Automation with IT

Reduced costs

Improved service

Air Asia developed open skies software to automate ticket handling to

Avoids travel agents and their fees

Uses reservation agents who work from home using VoIP

Encourages internet flight booking by customers

Maintenance information system used to log airplane parts and time cycles for replacement

Air Asia used innovative technique for routing airplanes

Does not use hub and spokes method only point to point.

Takes most profitable route between cities.

Keeping flight manuals on laptop computers allows for paperless cockpits.

Saves pre-flight time associated with calculating weight of plane (annual savings of 4800 hours).

Information System Helps Air Asia offer Better Services.

Safety First:

Partnering with world’s most renowned maintenance providers and complying with the world airline operations.

High Aircraft Utilization:

Implementing the regions fastest turn around time at only 25 minutes, assuring lower costs and higher productivity.

Low Fare, No Frills:

Providing guests with the choice of customizing services without compromising on quality and services.

Streamline operations:

Making sure that processes are as simple as possible.

Point-to-Point Network:

Applying the point-to-point network keeps operations simple and cost low.

7) Conclusions:

Every organization run on it strategies. And strategies make by management on the basis of the information they have.

So I think if the organization have strong information system and it have up-to-date information then the strategies which they are going to make for future will be perfect and it will gave the organization competitive edge in market and on it competitors

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