An Information System processes one or more information inputs into one or more information outputs for a specific purpose.
Information systems can perform numeric computations, facilitate communication and collaboration, automate business processes, and more. Information systems provide value to organizations by providing a competitive advantage in terms of cost, quality, speed, accuracy, and/or scale.
Sometimes an information system outputs the same or similar information it receives. But more often a system's objective is to transform information inputs into more valuable information outputs. Information has different value, depending on where it falls within the following Information Hierarchy:
| term | description | example |
|---|---|---|
| Data | A description of something, not necessarily organized or synthesized to provide meaning. | Numbers, words, dates, images, files. |
| Information | Data that has been organized or interpreted to provide meaning and value. | A chart of datapoints over time depicting an upward trend in sales. |
| Knowledge | Data and/or Information that has been organized, processed and interpreted to convey understanding, experience, accumulated learning, expertise, etc. | An informed decision to raise marketing expenditure levels. |
Information Systems are classified based on system purpose, functionality, scope, audience, and type of information processed:
| system type | general functions | specific example(s) |
|---|---|---|
| Operational (e.g. Transaction Processing Systems (TPS)) | Sends and receives data. | An ATM. |
| Managerial (e.g. Business Intelligence (BI), Management Information Systems (MIS), and some Decision Support Systems (DSS)) | Processes and synthesizes data into information. | A system that produces data dashboards. |
| Executive (e.g. some Decision Support Systems (DSS), Expert Systems, and Machine Learning) | Processes and synthesizes information into knowledge; emulates human decision-making and judgement processes. | A university's Student Housing Selection System, IBM Watson, Tesla Model S, Netflix and Pandora Recommendation Systems. |
Information systems may or may not leverage technology. Examples of non-tech information systems include: a doctor's paper-based patient records system, a deli's paper-based ordering system, and a tin-can telephone system. A computer-based information system uses a related group of technology components working together to process information inputs into information outputs for a specific purpose. Components of a computer-based information system generally include:
| component | description |
|---|---|
| People | Individuals who use the system. |
| Processes | Procedures the system performs or facilitates. |
| Hardware | Physical devices such as computers, servers, sensors, monitors, printers, speakers, etc. which perform as instructed by the system's software. |
| Software | Written instructions which govern the system's logic. |
| Network | Facilitates connection and communication between system components, often a computer network such as the Internet. |
| Datastore | A storage place for the system's information, like a Database or file cabinet. |