Information and Transaction Processing Systems in Business

Subject: Organizational Management
Pages: 2
Words: 510
Reading time:
2 min

Contemporary information systems comprise three main dimensions required to empower businesses with the appropriate solutions. The first dimension is organisations, which basically assumes that any information system should be designed to meet organisational structure, needs, and business objectives. The organisational structure suggests that there is a clear division of responsibilities among hierarchical levels, such as senior and middle management, knowledge, and data workers, as well as production or service workers. Each level of organisational hierarchy also relates to a particular business function, meaning that all employees are assigned to specialised tasks. Business functions operate based on formal rules and procedures known as business processes that require automation and configuration to ensure business continuity. Considerably, information systems are required to support the execution of business processes at all hierarchical levels depending on the business function requirements, which assumes a significant difference in requirement specifications.

The second dimension of information systems is management, a group of senior employees assigned for organisational decision making, strategic planning, and formulating action plans. Managers are also responsible for allocating resources to critical organisational tasks by responding to challenges of the external business environment and acting as responsible organisational leaders in times of uncertainty. Furthermore, management teams are tasked to create innovative products and solutions to retain market competitiveness. It means that they require having uninterrupted access to information retrieved both from internal systems designed for a business function and from the external environment, which is highly competitive. Hence, information systems should be designed in a way that provides management teams with timely and flawless data retrieval from both internal and external sources.

The third dimension of information systems is information technology, which comprises several modules and tools essential for effective business performance. For instance, computer hardware includes devices used for human-computer interaction, such as common computers or mobile devices, as well as telecommunication devices used to link physical equipment together. Networking technologies are a subset of information technology used to create and secure organisational networks from physical attacks, as well as to establish various types of connections within or across the network boundaries. Apart from the common feature of securing Internet access, the networking subset is used for establishing internal corporate networks known as an intranet and their extensions to external partners called an extranet. All subsets of information technologies and people involved form organisational IT infrastructure, a technology platform that unifies all organisational applications and technology solutions.

Transaction processing systems (TPS) are an example of management systems that support operational managers within the organisational hierarchy. TPS is designed to support operational-level activities such as materials flow, human resource management activities, and financial activities such as payroll processing or sales or receipts processing. Considering that operational level activities are routine but highly structured, the role of TPS is to ensure that each business process follows predefined rules and procedures. For management, it helps to receive accurate and timely reporting, while for an organisation, it helps to automate manual work to avoid human mistakes.