Write short notes on Transaction Processing Systems

A Management Information System ICT Revision Questions and Answers

The most fundamental computer-based system in an organisation pertains to the processing of business transactions. Transaction processing systems are aimed at expediting and improving the routine business activities that all organizations engage. Standard operating procedures, which facilitate handling of transactions, are often embedded in computer programs that control the entry of data, processing of details and search and presentation of data and information. The high volume of well-understood transactions associated with the operating level of an organisation, as well as the ability for management to develop specific procedures for handling them often trigger the need for computer assistance. Transaction processing systems, if computerised, provide speed and accuracy and can be programmed to follow routines without any variance. Systems Analysts design the systems and processes to handle various activities.
Transaction processing systems (TPS) are cross-functional information systems that process data resulting from the occurrence of business transactions. Transactions are events that occur as part of doing business, such as sales, purchases, deposits, withdrawals, refunds, and payments. Transaction processing activities are needed to capture and process data, or the operations of a business would grind to a halt. Transaction processing systems capture and process data describing business transactions. Then they update organizational files and databases, and produce a variety of information products for internal and external use.
Online transaction processing systems play a strategic role in electronic commerce.
• Many firms are using the Internet, extranets, and other networks that tie them electronically to their customers or suppliers for online transaction processing (OLTP).
• These real-time systems, which capture and process transactions immediately, can help them provide superior service to customers and other trading partners.
• OLTP systems add value to a company‘s products and services, and thus give them an
important way to differentiate themselves from their competitors.

A transaction processing cycle consists of several basic activities, which involve:
• Data entry activities
• Transaction processing activities
• Database maintenance activities
• Document and report generation
• Inquiry processing activities.

Data Entry activities

The input activity in TPS involves a data entry process. In this process, data is captured or collected recording, coding, and editing activities.
Transaction Processing activities
Transaction processing systems process data in two basic ways:
• Batch Processing – transaction data are accumulated over a period of time and processed periodically.
• Real-time Processing – (also called online processing), where data are processed immediately after a transaction occurs. All online transaction processing systems incorporate real-time processing capabilities. Many online systems also depend on the capabilities of fault tolerant systems that can continue to operate even if parts of the system fail.

Database Maintenance activities
An organization‘s data must be maintained its transaction processing systems so that they are always correct and up-to-date. Therefore, transaction processing systems update the corporate database of any organization to reflect changes resulting from day-to-day business transactions.

Document and Report Generation:
Transaction processing systems produce a variety of documents and reports. Examples of transaction documents include purchase orders, paychecks, sales receipts, invoices, and customer statements. Transaction reports might take the form of a transaction listing such as a payroll register, or edit reports that describe errors detected during processing.

Inquiry Processing: activities
Many transaction processing systems allow you to use the Internet, intranets, extranets, and web browsers 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 prespecified formats or screens. Examples of queries include:
• Checking on the status of a sales order
• Checking on the balance in an account
• Checking on the amount of stock in inventory

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