What do you mean by a Transaction Processing System (TPS)? Explain important features of a TPS.

A Management Information System ICT Revision Questions and Answers

Transaction Processing System (TPS): TPS at the lowest level of management is an information system that manipulates data from business transactions. Any business activity such as sales, purchase, production, delivery, payments or receipts involves transactions and these transactions are to be organized and manipulated to generate various information products for external use. Transaction processing system records and manipulates transaction data into usable information.
Some of the important features of a TPS are given as follows:
1. Large volume of data: As TPS is transaction–oriented, it generally consists of large volumes of data and thus, requires greater storage capacity. Their major concern is to ensure that the data regarding the transaction in the organizations are captured quickly and correctly.
2. Automation of basic operations: Any TPS aims at automating the basic operations of a business enterprise and plays a critical role in the day-to-day functioning of the enterprise. Any failure in the TPS for a short period of time can cause havoc in the functioning of the enterprise. Thus, TPS is an important source of up-to-date information regarding the operations in the enterprise.

3. Benefits are easily measurable: TPS reduces the workload of the people associated with the operations and improves their efficiency by automating some of the operations. Most of these benefits of the TPS are tangible and easily measurable. Therefore, cost benefit analysis regarding the desirability of TPS is easy to conduct. As the benefits from TPS are mainly tangible, the user acceptance is easy to obtain.
4. Source of input for other systems: TPS is the basic source of internal information for other information systems. Heavy reliance by other information systems on TPS for this purpose makes TPS important for tactical and strategic decisions as well.

Leave a Reply

Your email address will not be published. Required fields are marked *