Transaction Processing System :
- All business activity such as Sales, Purchase, Production, Transportation, Payment, Receipt etc. involves transaction and these transactions are to be organized and manipulated (control) to generate information.
- TPS involves the following activities –
- Capturing data to organize in files or databases.
- Processing of files / database using application software.
- Generating information in the form of reports.
- Processing of queries from various functional areas of organization.
- It requires a large amount of input data and produces a large amount of output without requiring complex processing.
- An automated TPS consists of all the components are such as
- Hardware, software, databases, telecommunication, people, and procedures.
- TPS Components –
- INPUT: Source document such as customer order, sales slips, invoices, purchase orders employee time cards etc are inputs to TPS.
- PROCESSING : TPS employee two mode of data processing :
- Batch and On-line processing.
- STORAGE: Ledger and files provides storage of data in TPS.
- OUTPUT: Any document generated in the system is output. Some output of TPS sever the purpose of input to other system
- Features of TPS –
- Large volume of data: TPS is transaction-oriented hence it generally handles large volume of data.
- Automation of basic operations : TPS aims to automate the day-to-day functioning of the enterprise.
- Benefits are easily measurable : Most of the benefits of TPS are tangible (concrete) and easily measurable.
- Source of input for other systems: Output of TPS is used as input to other systems.
Transactions Processing Methods :
- Transactions are commonly performed in batch or on-line.
- Batch processing means your sales team or other employees would gather information throughout the day or a specified period of time and all that information would be entered into the system all at once.
- For example :
- This process works for payment processing and printing shipping labels and packing slips. However, this method also means waiting to do everything at once and relying on the ability of your system to handle it all.
- In a real-time processing system, transactions are processed immediately as they occur without any delay to accumulate (gather) transactions.
- Real-time processing, on the other hand, processes each of the transactions and enters the information into your system immediately.
- Real-time processing is also referred to as online transaction processing, or OLTP.
- Example of Real-time Processing System :
- A good example of a real-time processing system would be airline ticket reservations. When you book a ticket and select a seat, that booking is made right away, and nobody else can get that same seat even a second later. Any changes you make to your reservation are also updated in real time.
- Another example is the stock market. When you submit an order to buy a stock, that order is processed immediately and not at the end of the day.
Transactions Processing Activities :
- All transaction processing systems performs a common set of basic data processing activities. TPSs capture and process data that describe fundamental business transactions. This data is used to update databases and to produce a variety of reports.
- Transaction Processing Cycle :
- Data Collection
- Data Editing
- Data Correction
- Data Manipulation
- Data Storage
- Document Production
1) Data collection: The process of capturing transaction related data
2) Data editing: Checking the validity of data entered
3) Data correction: Implemented if an error is found in the entered data
4) Data manipulation: Processing transaction data
5) Data storage: Altering databases to reflect the transaction.
These are briefly described in the following :
- Data Collection :
- The process of capturing and gathering all data necessary to complete transactions is called data collection.
- It can be manual such as completing a purchase order by hand. It can also be automated via special input device such as scanners and terminals.
- Data collection begins with a transaction (such as customer order) and results in the origination of data that is input to the transaction processing system.
- Data should be captured at its source and it should be recorded accurately, in a timely fashion, with minimal manual effort, and in a manner that can be directly entered to the computer rather than entering using keys.
- Example is an employee badge used as a time card when going in and out of an office building.
- Data Editing :
- An important step in processing data is to check for validity and completeness of data. Controls must be placed in the data-entry form.
- For example, quantity and cost must be numeric and names must be alphabetic.
- Data Correction :
- A data that is not entered properly needs to be entered correctly.
- Data correction involves reentering mistake data in the data entry point.
- For example, a UPC code not found in the retail store checkout, is given a special code to complete the transaction for an item.
- Data Manipulation :
- The process of performing calculations and other data transformations is termed data manipulation.
- Examples are, sorting data, summarizing data, finding price of five items, calculating employee weekly pay, and so on.
- Data Storage :
- Involves updating one or more database tables or files with new transactions.
- For example, inserting new customer information, updating customer demographics, updating inventory transactions, creating new student registration, and so on.
- Data Production :
- TPSs produce important business documents such as sales receipts, order entry list, customer list, invoices, purchase orders, inventory on-hand report, paychecks, and so on.
- Documents can be hard copy paper report or displayed on computer screen.