What Is the Function of an Information System?

An information system provides informational support for decision makers within an organization or company, according to the Food and Agriculture Organization of the United Nations. Such a system is designed to collect, transmit, process and store relevant data to be utilized by management to make decisions with regards to an organization’s progress.

The types of data organized by an information system include statistics regarding a company’s resources, programs, accomplishments and transactions. The most effective information systems process data in real time so managers can make effective decisions with the most up-to-date information.

Various kinds of information systems are tailored to transaction processing, management, decision support and strategy. Each type of information supports the department for which it is designed. All these systems help companies reach future goals by processing valuable information.

Good information gathering depends on relevancy, timeliness, accuracy, usability, reliability, exhaustiveness and aggregation level. For instance, relevant and timely information on the price of corn is usable and reliable if a company needs to know how much cattle feed will cost with respect to beef production. This kind of information is vital to determine prices at butcher shops and supermarkets.

Information systems help companies during the design stage of a decision process. Intelligence, such as trends and status reports, must be gathered before a design is made. Analytical tools and models are needed for designing a plan, process or product. Choices must then be made moving forward to the review stage to see if the decisions made were the correct ones.