Most information systems can be grouped into three broad classifications—enterprise systems (ES), knowledge management/collaboration systems, and business intelligence (BI) systems. These collectively comprise the information systems architecture for an enterprise.
Enterprise systems are used to manage the day to day business processes. Supply chain management (SCM) controls inbound and outbound logistics. Customer relationship management (CRM) manages communications and marketing initiatives directed at customers. However, the grandaddy of them all are enterprise resource planning (ERP) systems that control business transactions from accounts payable/receivable to product movement on the factory floor.
If this seems dense now, don’t worry about it. Books have been written about all these pieces. What is important for you to see is that ideally all the systems are smoothly coordinated so that management makes information driven decisions.
All of these enterprise systems communicate and share information as needed. They also store each of their activities in databases. At regular intervals these databases are copied into a centrally located data warehouse. The copying process is called extract, transform and load (ETL). Data is extracted from the multiple databases, transformed to a common format, and then loaded into the data warehouse.
The data warehouse then becomes a gold mine of data about the business. The beauty of the data warehouse is that it can be queried offline without interrupting operations of the business. However, the data warehouse is only as useful as the systems that query it for information. These are called business intelligence (BI) systems. One of the most well known types of BI systems is for advanced reporting or data mining. BI systems look to spot trends in the data and then convey that information to the appropriate management level. For example, BI systems discovered years ago that diapers and beer were often purchased in the same supermarket visit. Clever marketing sleuths concluded that dad sent out to buy diapers was also picking up a 6 pack on his way out of the store. This creates opportunities for product placement—locating the beer closer to the diapers.
Knowledge management and collaboration systems are ways that members of the organization capture and institutionalize organizational knowledge. The most familiar types of systems are internal websites for the company as well as blogs and wikis. However, leading organizations will also require that reports be filed in a systematic way to allow for easy retrieval in case the organization encounters a similar business problem in the future.