TRANSACTION PROCESSING SYSTEM

D e fi n it i on

 A Transaction Processing system (TPS) is

a type of information system that
collects, stores, modifies and retrieves
the data transactions of enterprise.
Features

 Rapid response: fast performance with

rapid results.
 Reliability: well designed backup
and recovery with a low failure
rate.
 Inflexibility; treat every transaction
equally.
 Controlled processing; maintain specific
requirement for the roles and
responsibilities of different employees.
ACIDTe s t
 In order to qualify as a TPS , transactions
made by the system must pass the ACID
test.
 ATOMICITY: A transaction’s change to the
state are atomic, either all happen or none
happen. These changes include database
changes , message, and action on
transactions.
 CONSISTENCY: TPS systems exist within a
set of rules .
 ISOLATION: treats each transaction
separately and keeps data from each
transaction separate.

Types o f TPS

 There are two types of TPS:

 Batch processing and
 Real time processing
1 . Batch Processing system

 Batch processing is where the information

is collected as a batch and then processed
later on.
 Eg ; paying by Cheque
 Advantages
1. Control over time of processing
2. Standardization
3. Reduced setup and processing
costs Disadvantages
4. Time delay in gathering data , storing
and bulk processing
5. Operation cost may increase
6. Only identical data is processed in one batch
7. Errors are corrected after the processing of
data
2) Real Time Processing

 Real time processing is where all details of

the transaction are recorded and changed
at the time as it occurs
 Eg; ATM’s
Advantages
1. Error correction can be immediate
2. Data is processed as demand
3.No time delay
Disadvantages
4. Standardization may not exist or may
be more difficult
5. Processing needs make control difficult
6. System hardware and software is
expensive
7. Security is critical
Transaction Processing Cycle
 Transaction processing system , capture
and process data describing business
transactions, update organizational
databases , and produce a variety of
information products. It should understand
this as a transaction processing cycle of
several basic activities .
1 Data entry
 The first step of the transaction processing cycle is
the capture of business data. Transaction data must be
entered into the system.
For eg; transaction data may be collected by point-of-sale
terminals using optical scanning of bar codes and credit
card readers at a retail store or other business.
 A number of input and output devices exist for
entering data .
 The documents generated at the source or point where
the transaction occurs are called source document and
become input data for the system.
 For eg; when a customer returns an items at a store ,
the sales receipts becomes the source document for
the transaction ‘return items for refund /
replacement’.
2)Transaction processing

 Transaction processing system process data

in two basic ways;
1) Batch processing , where transaction data
are accumulated over a period of time and
processed periodically.
2) Real-time processing , also called online
processing where data are processed
immediately after a transaction occurs.
3) Database maintenance
 An organizations databases must be updated by
its transaction processing systems so that they
are always correct and up-to-date. Therefore ,
transaction processing systems serve to assist in
maintaining the corporate databases of an
organization to reflect changes resulting from
day- to-day business transactions.
 For eg; credit sales made to customer will
cause customer a/c balance to be increased
and the amount of inventory on hand to be
decreased .
 Database maintenance ensures that these and
other changes are reflected in the data records
stored in the company’s databases.
4 ) Document and report
generation
 Transaction processing system produce
a variety of documents and reports.
 Eg of Transaction documents include
purchase orders, sales receipts,
customer statement etc..
 Transaction reports might take the form of
a transaction listing such as a payroll
register, or edit reports that describe
errors detected during processing.
5) Inquir y Processing
 Many transaction processing systems allow
you to use the Internet, intranets, extranet,
and web browser or database management
query languages to make inquiries and receive
responses concerning the results of
transaction processing activity
 Typically , responses are displayed in a variety
of pre specified formats or screens.
 For example, you might check on the status
of a sales order , the balances in an account,
or the amount of stock in inventory and
receive immediate responSes at your PC.
Purpose o f TPS
 To keep records about the state of the
organization.
 To process transaction that affects the
record.
 To produce output that reports on transaction that
have occurred.