Like any system, an information system has input, transformation, and output. Information systems (IS) have data as input, and they transform the data into information to help employees communicate and make decisions. Here are three primary types of IS. Transaction processing systems are used to handle routine and recurring business matters. Organizations use TPS to record accounting transactions, such as accounts receivable and payable and payroll. Management information systems transform data into the information employees need to do their work. The information provided by MIS is commonly used for making routine decisions.

Decision support systems use managers’ insights in an interactive computer-based process to assist in making nonroutine decisions. They use decision rules, decision models, and comprehensive databases. DSS are more flexible than MIS. These data manipulations allow managers to evaluate the possible effects of decisions.