Transaction Processing System

Transaction Processing System (TPS)

Transaction processing systems (TPS) are the basic business systems that serve the operational level of the organization. A transaction processing system is a computerized system that performs and records the daily routine transactions necessary to conduct business.

Operation information is concerned with daily routine tasks and activities. Taking orders, paying bills, selling products, clearing cheques etc. are the daily activities performed in different organizations. Organizations need information system to streamline these daily routine tasks. The information system used in this level of management is termed as Transaction Processing Systems (TPS).

TPS is used to collect data that are produced on daily basis from the routine works. It has user interface, i.e., form with fields to input data to the system. It enables to store and arrange data in the format which can be processed by other information system easily. More than 90% of data for the information systems are collected by TPS. Reports required:

 · Daily report of sales

· Daily report of customer complaints

 · Daily report of absent employees

 · Daily report of fuel consumed

The transaction system of Daraz.com deals with the part of the business where customers purchases goods, they control the entire trading operation of the business and are responsible for recording sales, keeping track of inventory, stock order and delivery schedule.

TYPES OF TPS:

Data entry

Data entry describes any of the techniques used to initially record data into a system. A few examples of data include:

 · Sales information

 · Purchase information

 · New employee details

· Updates to existing employee details

Data could be entered manually by a person keying the information in. Some systems are more advanced and support technology-based data entry such as optical character recognition or magnetic ink character recognition.

 TPS are of the following types:

1)  Batch processing

Batch processing is the collection of a group of similar transactions over a period of time, and their processing at a single time as a batch. This type of processing has been associated with mainframe centralized type systems. The method has been reduced in importance with the development of more advanced types of processing. It still remains an important form of processing as many systems used now, are based on batch processed systems.

 Advantages:

 · Relatively easy to develop

· Less processing power is required as deals with similar updates

 · Checks in place as part of the systems run

· Less hardware required, therefore cheaper.

Disadvantages:

 · Often delays between when a transaction is made and when the master file is updated and the output generated.

 · Management information is often incomplete due to out of date data.

 · Often master files kept off line therefore access may not always be available.

2) REAL TIME ONLINE PROCESSING

 Online processing

Online processing refers to equipment that operates under control of the central computer but typically from a different location through some kind of terminal.

 Examples include:

· An ATM machine for a bank – the ATM is linked to the bank’s central computer system and updates the user’s account immediately

 · Flight booking system at a travel agency

 If a service is no longer online (available) it is described as being offline. When a system is offline its services are no longer available. You may have experienced something similar when browsing the internet. For example when you have a Wi-Fi connection your web-browser is considered to be ‘online’ and will update. However, if there is no Wi-Fi signal and hence no connection the browser is considered to be ‘offline’. In this case you will not be able to download any new information to the computer.

 Real time processing

 Real time processing is the processing of individual transactions as they occur without the need for batching them together. This type of processing allows the user to update the master files immediately. 

Advantages

· Information more up to date therefore providing better management information.

· Increased ability for data to be online.

Disadvantages

 · Increase in expense as the system becomes more complex to run and to develop.

 · Increased hardware capacity which increases costs.