Transaction Processing Systems

1. A Brief History of
Information Technology
 The “dark ages”: paper forms in file cabinets
 Computerized systems emerge
 Initially for big projects like Social Security
 Same functionality as old paper-based systems
 The “golden age”: databases are everywhere
 Most activities tracked electronically
 Stored data provides detailed history of activity
 The next step: use data for decision-making
 The focus of this course!
 Made possible by omnipresence of IT
 Identify inefficiencies in current processes
 Quantify likely impact of decisions

2. INFORMATION
SYSTEMS IN THE
ENTERPRISE

3. Traditional vs. Electronic
Commerce
Source: Schneider and Perry

4. Advantages of Electronic
Commerce
 Increased sales
 Reach narrow market segments in
geographically dispersed locations
 Create virtual communities
 Decreased costs
 Handling of sales inquiries
 Providing price quotes
 Determining product availability

5. Disadvantages of Electronic
Commerce
 Loss of ability to inspect products from
remote locations
 Rapid developing pace of underlying
technologies
 Difficult to calculate return on investment
 Cultural and legal impediments

6. The process of e-commerce
1. Attract customers
 Advertising, marketing
2. Interact with customers
 Catalog, negotiation
3. Handle and manage orders
 Order capture
 Payment
 Transaction
 Fulfillment (physical good, service good, digital
good)
4. React to customer inquiries
 Customer service
 Order tracking

7. MAJOR TYPES OF SYSTEMS
 Decision support systems (DSS)
 Management information systems (MIS)
 Office automation systems (OAS)
 Transaction processing systems (TPS)
*

8. TRANSACTION PROCESSING SYSTEM
 TPS is a computerized system that
performs and records the daily routine
transactions necessary to conduct the
business.
 At operational level, routine activities are
highly structured. Hence, computerized
systems like TPS can be successfully
used to not only to record but also to
perform the transactions.
*

9. TYPICAL TPS APPLICATIONS
 Sales and Marketing
 Order Entry and Distribution System
 CRM
 Finance and Accounting
 Financial Accounting, Receivable and Payable Management
 Cash & Funds Management,
 Short Terms Budgeting
 Inventory Management
 Personnel
 Payroll, Benefit Systems
 Personnel Records

10. OFFICE AUTOMATION SYSTEMS
(OAS)
 Office Automation Systems are designed to
assist the data workers to achieve better
coordination and improved efficiency in terms of
speed of processing data.
 Data workers are those who are mainly
involved in the processing of data rather than
creating them. They consists primarily of
secretaries, book-keepers, filing clerks and
junior mangers whose jobs are principally to
use, manipulate and disseminate information.

11. OFFICE AUTOMATION SYSTEMS
(OAS)
 Toward a “paperless” office
 Redesign of work flow
 Integrated software
 Ergonomic design
 Bright, cheerful work space
EXAMPLE: PRESENTATION GRAPHICS

12. DECISION SUPPORT SYSTEMS (DSS)
 DSS help managers make decisions that
are unique, rapidly changing, and not
easily specified in advance. The basic
features of DSS systems are
 Flexible,adaptable, quick
 User controls inputs/outputs
 No professional programming
 Supports decision process
 Sophisticated modeling tools

13. Transaction Processing Systems
Transaction processing systems record and
manage transaction data but convert little or none of it
into information.
One of their main purposes is to provide the data that other
information Systems need

14. Types of Processing

15. Definition
Batch processing is the
processing of previously
collected data. The
processing occurs without
any interaction with users

16. How it works and why use it
Data is collected and then processed at a
different time to the actual transaction.
Batch processing is particularly useful for
operations that need the computer or
peripheral devices such as a printer for an
extended time.

17. What is the best data type for Batch Processing?
 Credit card purchases?
 ATM withdrawals?
 Share purchases and sales?
 Electricity Bills
Define the type of data that is best suited
to batch processing.

18. Advantages
Can be run regularly such as midnight. Reduces cost as
equipment can be utilised during quiet time without interrupting
other activities.
Labour cost reduction as it is a fully automated process without
the need for a human operator
Processing of data can be outsourced to another company

19. Disadvantages
Process must have exclusive access and control over
its data files. It cannot share them with another task.
Batch job will halt immediately if an error occurs in any
one of the tasks
Data which is being processed is not fully current

21. Practical Exercise: Task Scheduler
What types of tasks can be scheduled. Why do you think
you’d want them done in down time?

22. Real Time Processing
Real time processing refers to
processing that occurs as the
transactions arrive. It is not delayed
like batch process and is more likely
to be directly under the users
control.

23. What is the best data type for Real Time Processing?
Real time processing should be used with data or
functions that must reflect the current situation.
Examples Sensors – A porch light switches on when
movement is detected
Stock market transactions during which prices are
constantly changing.

24. Advantages
Data can be processed and viewed so it
reflects a changing environment.
Real time processing tasks can be
interrupted and new ones started in
response to a new situation
Processing jobs can be of almost any
scale, from large – video capture to small
a sensor tripping an alarm.

25. Disadvantages
 Possible need for greater processing
requirements.
 Real time nature means any uncorrected
errors may have greater consequences
as RTP generally only takes place once.

26. Explain the following

27. Data Validation

28. Data Validation and Processing
 Data validation is vital in RTP as any
error will distort the picture given of the
real time environment. Correction of this
is difficult
 Data validation is vital in Batch
Processing as it could stop the batch job
which will need to be restarted after the
data is corrected.

29. Data Validation
Data validation is when data entered by users is checked by the
software to see if they are within the acceptable range of values
Data can be validated on the basis of:
The correct data type
The correct sign – positive or negative
Required data – example all fields need to be filled
Within acceptable data range – example age must be from 18 to 100
Input masks – example ### AAA to specify format
Reduced input choice via radio buttons or dropdown menus
Validate input against external database of correct data

30. Travel booking System Participants and Users Example

31. Travel booking System Participants and Users Example continued
Participants in a ticket booking system include reservation clerks
who directly access the reservation system.
Users of the system is the consumer because they benefit through
its operation by receiving a confirmed booking. The consumer can
also be a direct participant in the RTP when they make a
reservation for a seat via the internet.
Participants = Those who run the system
Users = Those who benefit from it