A business information system (BIS) is an organized combination of people, procedures, data and technology that collects, processes, stores and distributes information to support business operations and decisions. It is not just a software application or a set of computers: the people who use and maintain the system, and the processes that guide their work, are part of it too.
What does a business information system do?
A BIS turns data gathered through business activity into information that people or other parts of the organization can use. In broad terms, it collects or accepts data, processes and stores it, then makes the resulting information available. This can support routine work as well as coordination, control, analysis and decision-making.
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For example, a system may record a customer order, process billing, track vendor payments, handle bank transactions, or monitor production and inventory. These tasks show why the term covers more than management dashboards: systems can support everyday transactions and provide information for organizational decisions.
OpenStax describes information systems as interconnected components that support decision-making, coordination, control, analysis and visualization in an organization.
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What are the components of a business information system?
The five-part model
One common introductory model identifies five components:
- Hardware: The devices used to collect, process, store or access information.
- Software: The programs and applications that perform tasks and process data.
- Data: The facts or records collected and processed by the system.
- People: The users, designers, maintainers and managers who work with the system.
- Procedures: The rules and steps that guide how the system and its information are used.
The technology, people and process model
Another useful model groups the components into technology, people and processes. It highlights how those parts work together: technology handles information, people use or manage it, and processes connect the system to the organization’s work. Hardware, software and communications technology can be treated as technology; procedures are often discussed as organizational processes.
These are different ways to organize the same broad idea, not competing universal definitions. The five-part model makes the individual system components easy to identify, while the three-part model emphasizes their interaction. The Pressbooks text uses the technology, people and process grouping.
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1Clear out junk files and repair common Windows errors2Scan for outdated or missing drivers - takes under a minute3Repair Windows errors before they cause bigger problemsHow is a business information system different from information technology?
Information technology (IT) is a resource within an information system, rather than a synonym for the whole system. IT concerns the technology used to implement and maintain computer systems. A BIS also includes data, people and procedures or processes that connect the technology to business tasks.
That distinction matters when evaluating what a system does. A business application may be one component, but the broader system includes the information it handles, the people responsible for using or maintaining it, and the work practices that shape how it is used. OpenStax explains the distinction between information systems and IT.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What are examples of business information systems?
Business information systems can support both transaction processing and the information needs of managers and other decision-makers. Examples include systems that:
- Process customer orders and billing.
- Record vendor payments and bank transactions.
- Monitor production and inventory.
These examples are drawn from OpenStax’s discussion of management information systems. A system’s purpose depends on the work it supports; the label does not refer to one particular product or application.
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