Information systems (IS) and information technology (IT) are closely related concepts in the modern business environment, but they describe different components of how organisations use data, technology, and processes to operate effectively.
Information systems (IS) refer to the broader organisational systems designed to collect, process, store, analyse, and distribute information to support operations, decision-making, and strategic planning. An information system includes people, processes, data, and technology, recognising that technology alone cannot deliver value without effective human and organisational involvement. IS play a critical role across business functions such as finance, HR, sales, marketing, supply chain management, and customer service.
Information technology (IT), by contrast, refers specifically to the technological infrastructure that enables information systems to function. IT includes hardware (computers, servers, devices), software (applications, operating systems), databases, and networking components. IT professionals are typically responsible for maintaining systems, ensuring cybersecurity, managing networks, and implementing technological solutions that underpin organisational performance.
In short:
- IS = people + processes + data + technology working together to support business needs.
- IT = the technological tools and infrastructure that enable information processing.
Types of Information Systems in Organisations
Organisations rely on a wide range of information systems, each designed to support different levels of activity and decision-making.
1. Transaction Processing Systems (TPS)
TPS handle the routine, day-to-day transactions that keep a business running.
Examples include:
- Point-of-sale systems in retail
- Online banking systems
- Inventory and order processing systems
TPS emphasise speed, reliability, and accuracy.
2. Management Information Systems (MIS)
MIS transform data from TPS and other sources into structured reports, dashboards, and summaries that help managers monitor performance and make informed decisions.
Typical MIS outputs include:
- Sales performance reports
- Budget variance reports
- Production summaries
MIS focus on supporting operational and tactical decision-making.
3. Decision Support Systems (DSS)
DSS provide advanced tools and analytical models to help managers evaluate complex problems, explore scenarios, and make strategic decisions.
Features may include:
- Data modelling
- Forecasting tools
- “What-if” simulations
DSS are especially valuable when decisions involve uncertainty or multiple variables.
4. Executive Information Systems (EIS)
EIS (sometimes called Executive Support Systems, ESS) provide senior executives with high-level, real-time, strategic information. They typically offer:
- Interactive dashboards
- Key performance indicators (KPIs)
- Trend analysis and forecasting
EIS support long-term planning and organisational strategy.
5. Expert Systems (ES)
Expert systems use artificial intelligence (AI) and knowledge-based technologies to replicate the decision-making processes of human experts.
They are used in areas such as:
Medical diagnosis
- Loan approval
- Fraud detection
- Technical troubleshooting
Expert systems can improve consistency, speed, and accuracy in complex decision environments.
Information systems continue to evolve rapidly as organisations adopt cloud computing, big data analytics, AI, and automation. Together, IS and IT are fundamental drivers of modern business innovation, efficiency, and competitiveness.
