Information systems are classified into two major categories, according to international developments:
A. Online transactional processing systems (also called operational systems)
B. Decision support systems (DSS)
Online transactional processing systems
An online transaction processing system (OLTP) is a computerised system that records and processes transactions. Transactions are the basic operations performed by a computer system. Typically, an OLTP system is used to record financial transactions. However, it can also be used to record and process other types of transactions, such as inventory, manufacturing, and human resource transactions.
An OLTP system typically has a front-end interface that allows users to enter transactions. The transactions are then stored in a database. The database is updated in real-time, so the changes made are immediately reflected in the front-end interface.
OLTP systems are designed to support a large number of users. They are also designed to process a large number of transactions quickly. For this reason, OLTP systems typically use a database optimized for transaction processing.
OLTP systems are used in various businesses, including banks, retail businesses, and e-commerce businesses. They are also used in government agencies and healthcare organisations.
- Supply Chain Management (SCM)
- Production support (e.g. MRP, Advanced Planning & Scheduling)
- Customer interface management (e.g. sales, order management and billing) (CRM)
- Finance and Accounting (ERP)
- Salesforce automation
- Web channel operations (eCRM)
- Internal workflow support systems
Decision support systems
A decision support system (DSS) is an interactive computer-based information system that supports decision-making in an organization or a business. A DSS is used to make decisions that are semi-structured or unstructured. It is an interactive system that helps decision-makers use data and models to make decisions.
DSS are computer programs that help people make decisions. They are interactive and use data and models to support decision-making. DSS is used to make decisions that are semi-structured or unstructured.
DSS are used in a variety of industries, including business, government, and healthcare. They can be used for strategic decision-making, operational decision-making, and tactical decision-making.
DSS can help organizations make better decisions. They can provide insights that would not be available without the use of computer-based information and models. DSS can also help organizations save time and money by making decisions faster and more efficiently.
Managers at all levels of the organisation may rely on DSS to give them information that will assist them in comprehending the current business situation and making educated choices (fact-based management).
OLTP systems against DSS systems It is clear that the purposes of OLTP (online transactional processing) and DSS (decision support systems) differ, even though some functionalities of the two categories overlap (for example, an OLTP system may provide some operational reporting functionality used for decision support), given that they serve different functions and different User groups in the Business.
Differences between OLTP vs Decision Support Systems
There are several key differences between OLTP and Decision Support Systems:
- OLTP systems are designed to support transactions, whereas Decision Support Systems are designed to support decision-making.
- OLTP systems typically have a higher degree of normalization, meaning that data is stored in a more organized manner. This makes OLTP systems more efficient for storing and retrieving data. Decision Support Systems, on the other hand, typically have a lower degree of normalization. This allows for more flexibility in data storage, which can be beneficial for complex decision-making.
- OLTP systems typically have a more rigid structure, as they must support a high number of transactions. Decision Support Systems, on the other hand, can be more flexible in their structure.
- OLTP systems are typically designed to support a specific business process. Decision Support Systems, on the other hand, can be designed to support multiple business processes.
- OLTP systems typically have a shorter data retention period, as they only need to store data for the current transaction. Decision Support Systems, on the other hand, can have a longer data retention period, as they may need to store data for future decision-making.