WHAT IS OLTP:-

Online transaction processing, or OLTP, refers to a class of

systems that facilitate and manage transaction-oriented applications,
typically for data entry and retrieval transaction processing. The term
is somewhat ambiguous; some understand a "transaction" in the
context of computer or database transactions, while others (such as
the Transaction Processing Performance Council) define it in terms of
business or commercial transactions.[1] OLTP has also been used to
refer to processing in which the system responds immediately to user
requests. An automatic teller machine (ATM) for a bank is an
example of a commercial transaction processing application.

The technology is used in a number of industries, including banking,

airlines, mailorder, supermarkets, and manufacturing. Applications
include electronic banking, order processing, employee time clock
systems, e-commerce, and eTrading. The most widely used OLTP
system is probably IBM's CICS.

In computer science, transaction processing is information

processing that is divided into individual, indivisible operations,
called transactions. Each transaction must succeed or fail as a
complete unit; it cannot remain in an intermediate state.

definition –

Databases must often allow the real-time processing of SQL

transactions to support e-commerce and other time-critical
applications. This type of processing is known as online transaction
processing (OLTP).

OLTP (online transaction processing) is a class of program that

facilitates and manages transaction-oriented applications, typically for
data entry and retrieval transactions in a number of industries,
including banking, airlines, mailorder, supermarkets, and
manufacturers. Probably the most widely installed OLTP product is
IBM's CICS (Customer Information Control System).
Today's online transaction processing increasingly requires support
for transactions that span a network and may include more than one
company. For this reason, new OLTP software uses client/server
processing and brokering software that allows transactions to run on
different computer platforms in a network.

A system consisting of interconnected computers that share a central

storage system and various peripheral devices such as a printer,
scanner, or router. Each computer connected to the system can
operate independently, but has the ability to communicate with other
external devices and computers.

REQUIREMENTS:-

Online transaction processing increasingly requires support for

transactions that span a network and may include more than one
company. For this reason, new OLTP software uses client/server
processing and brokering software that allows transactions to run on
different computer platforms in a network.

In large applications, efficient OLTP may depend on sophisticated

transaction management software (such as CICS) and/or database
optimization tactics to facilitate the processing of large numbers of
concurrent updates to an OLTP-oriented database.

For even more demanding Decentralized database systems, OLTP

brokering programs can distribute transaction processing among
multiple computers on a network. OLTP is often integrated into
service-oriented architecture (SOA) and Web services.

BENEFITS:-

Online Transaction Processing has two key benefits: simplicity and

efficiency. Reduced paper trails and the faster, more accurate
forecasts for revenues and expenses are both examples of how OLTP
makes things simpler for businesses.

ADVANTAGES OF OLTP:-
Online Transaction Processing (OLTP) has the following advantages:

It provides faster and more accurate forecast for revenues and

expenses.
It provides a concrete foundation for a stable organization
because of timely modification of all transactions.
It makes the transactions much easier on behalf of the customers
by allowing them to make the payments according to their
choice.
It broadens the customer base for an organization by simplifying
and speeding up individual processes.

DISADVANTAGES OF OLTP:-
As with any information processing system, security and reliability
are considerations. Online transaction systems are generally more
susceptible to direct attack and abuse than their offline counterparts.
When organizations choose to rely on OLTP, operations can be
severely impacted if the transaction system or database is unavailable
due to data corruption, systems failure, or network availability issues.
Additionally, like many modern online information technology
solutions, some systems require offline maintenance which further
affects the cost-benefit analysis.

Online Transaction Processing (OLTP) has the following

disadvantages:

It makes the database much more susceptible to intruders and

hackers because it makes the database available worldwide.
For B2B (business-to-business) transactions, businesses must go
offline to complete certain steps of an individual process,
causing buyers and suppliers to miss out on some of the
efficiency benefits that the system provides. As simple as OLTP
is, the simplest disruption in the system has the potential to
cause a great deal of problems, causing a waste of both time and
money.
It can lead to server failure, which may cause delays or even
wipe out large amounts of data from the database.
IMPLEMENTATION OF OLTP:-
On-Line Transaction Processing is a processing that supports the daily
business operations. Also know as operational processing and
OLTP. An OLTP is a database which must typically allow the real-
time processing of SQL transactions to support traditional retail
processes, e-commerce and other time-critical applications. It is also a
class of program that helps to manage or facilitate transaction oriented
applications such as data entry and retrieval transactions in a number
of industries, including banking, airlines, mail order, supermarkets,
and manufacturers. With today's business environment, it is
impossible to run a business without having to rely on data.
Processing online transactions these days increasingly requires
support for transactions spanning a large network or even the global
internet and may include many companies.

1. Today, with the ubiquity of the internet, more and more people
even from those remote areas are not doing transactions online
through an e-commerce environment. The term transaction
processing is often associated with the process wherein an
online shop or ecommerce website accepts and processes
payments through a customer's credit or debit card in real time
in return for purchased goods and services.
2. During the process of online transactions, a merchant payment
system will automatically connect to the bank or credit card
company of the customer and carry out security, fraud and other
checking for validity after which authorization to take the
payment follows. In is strongly advised that whfen a company
looks for other companies that will handle online transactions
and processing, the company should have a system
infrastructure that is robust, secure and reliable that give
customers fast, seamless and secure checkout time.
3. An OLTP implementation tends to be very large involving very
high volume of data at any given time. Business organizations
have invested in sophisticated transaction management software
like Customer Information Control System (CICS) and database
optimization tactics that can help OLTP process very large
 numbers and volumes of concurrent updates on an OLTP-
oriented database.
4. There are also many OLTP brokering programs which can
distribute transaction processing among multiple computers on a
network that can enhance the functions of an OLTP working on
a more demanding decentralized database system. Service
oriented architectures and web services are now commonly
integrated with OLTP.
5. The two main benefits with using OLTP are simplicity and
efficiency. OLTP helps simplify a business operation by
reducing paper trails and helping draw faster and more accurate
forecasting for revenues and expenses. OLTP helps provide a
concrete foundation with timely updating of corporate data. For
an enterprise' customers, OLTP allows the more choices on how
they want to pay giving them more flexible time and enticing
them to make more transactions. Most OLTP transactions offer
services to customers 24 hours a day seven days a week .

APPLICATION OF OLTP:-
OLTP applications are often used to capture new data or update
existing data. An order-entry system is a typical example of an OLTP
application.

OLTP applications have the following characteristics:

Transactions that involve small amounts of data

Indexed access to data
Many users
Frequent queries and updates
Fast response times.

Compare Data Warehouse database and OLTP database?

The data warehouse and the OLTP data base are both
relational databases. However, the objectives of both these
databases are different.
The OLTP database records transactions in real time and aims
to automate clerical data entry processes of a business entity.
Addition, modification and deletion of data in the OLTP
database is essential and the semantics of the application used in
the front end impact on the organization of the data in the
database.
The data warehouse on the other hand does not cater to real
time operational requirements of the enterprise. It is more a
storehouse of current and historical data and may also contain
data extracted from external data sources.

Differences
Data warehouse
OLTP database
database
Designed for analysis
of business measures Designed for real time
by categories and business operations.
attributes
Optimized for bulk Optimized for a
loads and large, common set of
complex, transactions, usually
unpredictable queries adding or retrieving a
that access many rows single row at a time
per table. per table.
Optimized for
Loaded with
validation of
consistent, valid data;
incoming data during
requires no real time
transactions; uses
validation
validation data tables.
Supports few
Supports thousands of
concurrent users
concurrent users.
relative to OLTP

However, the data warehouse supports OLTP system by

providing a place for the latter to offload data as it accumulates
and by providing services which would otherwise degrade the
performance of the database.
OLTP vs. OLAP

We can divide IT systems into transactional (OLTP) and analytical

(OLAP). In general we can assume that OLTP systems provide source
data to data warehouses, whereas OLAP systems help to analyze it.

- OLTP (On-line Transaction Processing) is characterized by

a large number of short on-line transactions (INSERT,
UPDATE, DELETE). The main emphasis for OLTP systems is
put on very fast query processing, maintaining data integrity in
multi-access environments and an effectiveness measured by
number of transactions per second. In OLTP database there is
detailed and current data, and schema used to store transactional
databases is the entity model (usually 3NF).

- OLAP (On-line Analytical Processing) is characterized by

relatively low volume of transactions. Queries are often very
complex and involve aggregations. For OLAP systems a
response time is an effectiveness measure. OLAP applications
are widely used by Data Mining techniques. In OLAP database
there is aggregated, historical data, stored in multi-dimensional
schemas (usually star schema).
 The following table summarizes the major differences between
OLTP and OLAP system design.

OLTP System OLAP System

Online Transaction Online Analytical
Processing Processing
(Operational System) (Data Warehouse)
Operational data; OLTPs Consolidation data; OLAP
Source of data are the original source of data comes from the various
the data. OLTP Databases
To control and run To help with planning,
Purpose of
fundamental business problem solving, and
data
tasks decision support
Reveals a snapshot of Multi-dimensional views of
What the data ongoing business various kinds of business
processes activities
Short and fast inserts and
Inserts and Periodic long-running batch
updates initiated by end
Updates jobs refresh the data
users
Relatively standardized
and simple queries Often complex queries
Queries
Returning relatively few involving aggregations
records
Depends on the amount of
data involved; batch data
refreshes and complex
Processing
Typically very fast queries may take many
Speed
hours; query speed can be
improved by creating
indexes
Larger due to the existence
Space Can be relatively small if of aggregation structures
Requirements historical data is archived and history data; requires
more indexes than OLTP
Database Highly normalized with Typically de-normalized
Design many tables with fewer tables; use of
 star and/or snowflake
schemas
Backup religiously;
Instead of regular backups,
operational data is critical
some environments may
Backup and to run the business, data
consider simply reloading
Recovery loss is likely to entail
the OLTP data as a recovery
significant monetary loss
method
and legal liability

DIFFERENCE BETWEEN OLAP & OLTP:-

OLAP
OLTP
1. Current data. 1. Current and historical data.
2. Short database transactions . 2. Long database transactions.
3. Short database transactions . 3. Batch update/insert/delete.
4. Normalization is promoted . 4. Denormalization is promoted .
5. High volume transactions . 5. Low volume transactions.
6. Transaction recovery is 6. Transaction recovery is not
necessary. necessary.

HOW OLTP WORKS :-

TRANSACTION PROCESSING SYSTEM:

A Transaction Processing System or Transaction Processing

Monitor is a set of information which processes a data transaction in
a database system that monitors transaction programs (a special kind
of program). The essence of a transaction program is that it manages
data that must be left in a consistent state. E.g. if an electronic
payment is made, the amount must be both withdrawn from one
account and added to the other; it cannot complete only one of those
steps. Either both must occur, or neither. In case of a failure
preventing transaction completion, the partially executed transaction
must be 'rolled back' by the TPS. While this type of integrity must be
provided also for batch transaction processing, it is particularly
important for online processing: if e.g. an airline seat reservation
system is accessed by multiple operators, after an empty seat inquiry,
the seat reservation data must be locked until the reservation is made,
otherwise another user may get the impression a seat is still free while
it is actually being booked at the time. Without proper transaction
monitoring, double bookings may occur. Other transaction monitor
functions include deadlock detection and resolution (deadlocks may
be inevitable in certain cases of cross-dependence on data), and
transaction logging (in 'journals') for 'forward recovery' in case of
massive failures.

TYPES:-

Contrasted with batch processing.....

Batch processing is not transaction processing. Batch processing

involves processing several transactions at the same time, and the
results of each transaction are not immediately available when the
transaction is being entered;[1] there is a time delay. transactions are
accumulated for a certain period (say for day) where updates are made
especially after work.

Real-time and batch processing

There are a number of differences between real-time and batch

processing. These are outlined below:

Each transaction in real-time processing is unique. It is not part of a

group of transactions, even though those transactions are processed in
the same manner. Transactions in real-time processing are stand-alone
both in the entry to the system and also in the handling of output.

Real-time processing requires the master file to be available more

often for updating and reference than batch processing. The database
is not accessible all of the time for batch processing.

Real-time processing has fewer errors than batch processing, as

transaction data is validated and entered immediately. With batch
processing, the data is organised and stored before the master file is
updated. Errors can occur during these steps.
Infrequent errors may occur in real-time processing; however, they
are often tolerated. It is not practical to shut down the system for
infrequent errors.

More computer operators are required in real-time processing, as the

operations are not centralised. It is more difficult to maintain a real-
time processing system than a batch processing system.

Features
Rapid response

Fast performance with a rapid response time is critical. Businesses

cannot afford to have customers waiting for a TPS to respond, the
turnaround time from the input of the transaction to the production for
the output must be a few seconds or less.

Reliability

Many organizations rely heavily on their TPS; a breakdown will

disrupt operations or even stop the business. For a TPS to be effective
its failure rate must be very low. If a TPS does fail, then quick and
accurate recovery must be possible. This makes well–designed
backup and recovery procedures essential.

Inflexibility

A TPS wants every transaction to be processed in the same way

regardless of the user, the customer or the time for day. If a TPS were
flexible, there would be too many opportunities for non-standard
operations, for example, a commercial airline needs to consistently
accept airline reservations from a range of travel agents, accepting
different transactions data from different travel agents would be a
problem.

Controlled processing

The processing in a TPS must support an organization's operations.

For example if an organization allocates roles and responsibilities to
particular employees, then the TPS should enforce and maintain this
requirement.
Example : ATM Transaction
ACID test properties: first definition
Atomicity
Main article: Atomicity (database systems)

A transaction’s changes to the state are atomic: either all happen or

none happen. These changes include database changes, messages, and
actions on transducers.[2]

Consistency

A transaction is a correct transformation of the state. The actions

taken as a group do not violate any of the integrity constraints
associated with the state. This requires that the transaction be a
correct program![2]

Isolation

Even though transactions execute concurrently, it appears to each

transaction T, that others executed either before T or after T, but not
both.[2]

Durability

Once a transaction completes successfully (commits), its changes to

the state survive failures.[2]

Concurrency

Ensures that two users cannot change the same data at the same time.
That is, one user cannot change a piece of data before another user
has finished with it. For example, if an airline ticket agent starts to
reserve the last seat on a flight, then another agent cannot tell another
passenger that a seat is available.
Storing and retrieving

Storing and retrieving information from a TPS must be efficient and

effective. The data are stored in warehouses or other databases, the
system must be well designed for its backup and recovery procedures.

Databases and files

The storage and retrieval of data must be accurate as it is used many

times throughout the day. A database is a collection of data neatly
organized, which stores the accounting and operational records in the
database. Databases are always protective of their delicate data, so
they usually have a restricted view of certain data. Databases are
designed using hierarchical, network or relational structures; each
structure is effective in its own sense.

Hierarchical structure: organizes data in a series of levels,

hence why it is called hierarchal. Its top to bottom like
structure consists of nodes and branches; each child node has
branches and is only linked to one higher level parent node.
Network structure: Similar to hierarchical, network structures
also organizes data using nodes and branches. But, unlike
hierarchical, each child node can be linked to multiple, higher
parent nodes.
Relational structure: Unlike network and hierarchical, a
relational database organizes its data in a series of related
tables. This gives flexibility as relationships between the tables
are built.
 A relational structure.

A hierarchical structure.
A network structure.

The following features are included in real time transaction

processing systems:

Good data placement: The database should be designed to

access patterns of data from many simultaneous users.
Short transactions: Short transactions enables quick
processing. This avoids concurrency and paces the systems.
Real-time backup: Backup should be scheduled between low
times of activity to prevent lag of the server.
High normalization: This lowers redundant information to
increase the speed and improve concurrency, this also
improves backups.
Archiving of historical data: Uncommonly used data are moved
into other databases or backed up tables. This keeps tables
small and also improves backup times.
Good hardware configuration: Hardware must be able to
handle many users and provide quick response times.

In a TPS, there are 5 different types of files. The TPS uses the files to
store and organize its transaction data:
 Master file: Contains information about an organization’s
business situation. Most transactions and databases are stored
in the master file.
Transaction file: It is the collection of transaction records. It
helps to update the master file and also serves as audit trails
and transaction history.
Report file: Contains data that has been formatted for
presentation to a user.
Work file: Temporary files in the system used during the
processing.
Program file: Contains the instructions for the processing of
data.

Data warehouse
Main article: Data warehouse

A data warehouse is a database that collects information from

different sources. When it's gathered in real-time transactions it can be
used for analysis efficiently if it's stored in a data warehouse. It
provides data that are consolidated, subject-oriented, historical and
read-only:

Consolidated: Data are organised with consistent naming

conventions, measurements, attributes and semantics. It allows
data from a data warehouse from across the organization to be
effectively used in a consistent manner.
Subject-oriented: Large amounts of data are stored across an
organization, some data could be irrelevant for reports and
makes querying the data difficult. It organizes only key business
information from operational sources so that it's available for
analysis.
Historical: Real-time TPS represent the current value at any
time, an example could be stock levels. If past data are kept,
querying the database could return a different response. It
stores series of snapshots for an organisation's operational
data generated over a period of time.
 Read-only: Once data are moved into a data warehouse, it
becomes read-only, unless it was incorrect. Since it represents
a snapshot of a certain time, it must never be updated. Only
operations which occur in a data warehouse are loading and
querying data.

Backup procedures

A Dataflow Diagram of backup and recovery procedures.

Since business organizations have become very dependent on TPSs, a

breakdown in their TPS may stop the business' regular routines and
thus stopping its operation for a certain amount of time. In order to
prevent data loss and minimize disruptions when a TPS breaks down
a well-designed backup and recovery procedure is put into use. The
recovery process can rebuild the system when it goes down.

Recovery process

A TPS may fail for many reasons. These reasons could include a
system failure, human errors, hardware failure, incorrect or invalid
data, computer viruses, software application errors or natural or man-
made disasters. As it's not possible to prevent all TPS failures, a TPS
must be able to cope with failures. The TPS must be able to detect and
correct errors when they occur. A TPS will go through a recovery of
the database to cope when the system fails, it involves the backup,
journal, checkpoint, and recovery manager:

Journal: A journal maintains an audit trail of transactions and

database changes. Transaction logs and Database change logs
are used, a transaction log records all the essential data for
 each transactions, including data values, time of transaction
and terminal number. A database change log contains before
and after copies of records that have been modified by
transactions.

Checkpoint: A checkpoint record contains necessary

information to restart the system. These should be taken
frequently, such as several times an hour. It is possible to
resume processing from the most-recent checkpoint when a
failure occurs with only a few minutes of processing work that
needs to be repeated.

Recovery Manager: A recovery manager is a program which

restores the database to a correct condition which can restart
the transaction processing.

Depending on how the system failed, there can be two different

recovery procedures used. Generally, the procedures involves
restoring data that has been collected from a backup device and then
running the transaction processing again. Two types of recovery are
backward recovery and forward recovery:

Backward recovery: used to undo unwanted changes to the

database. It reverses the changes made by transactions which
have been aborted. It involves the logic of reprocessing each
transaction, which is very time-consuming.

Forward recovery: it starts with a backup copy of the database.

The transaction will then reprocess according to the transaction
journal that occurred between the time the backup was made
and the present time. It's much faster and more accurate.

Types of back-up procedures

There are two main types of Back-up Procedures: Grandfather-

father-son and Partial backups:
Grandfather-father-son

This procedure refers to at least three generations of backup master

files. thus, the most recent backup is the son, the oldest backup is the
grandfather. It's commonly used for a batch transaction processing
system with a magnetic tape. If the system fails during a batch run, the
master file is recreated by using the son backup and then restarting the
batch. However if the son backup fails, is corrupted or destroyed, then
the next generation up backup (father) is required. Likewise, if that
fails, then the next generation up backup (grandfather) is required. Of
course the older the generation, the more the data may be out of date.
Organizations can have up to twenty generations of backup.

Partial backups

This only occurs when parts of the master file are backed up. The
master file is usually backed up to magnetic tape at regular times, this
could be daily, weekly or monthly. Completed transactions since the
last backup are stored separately and are called journals, or journal
files. The master file can be recreated from the journal files on the
backup tape if the system is to fail.

Updating in a batch

This is used when transactions are recorded on paper (such as bills

and invoices) or when it's being stored on a magnetic tape.
Transactions will be collected and updated as a batch at when it's
convenient or economical to process them. Historically, this was the
most common method as the information technology did not exist to
allow real-time processing.

The two stages in batch processing are:

Collecting and storage of the transaction data into a transaction

file - this involves sorting the data into sequential order.
Processing the data by updating the master file - which can be
difficult, this may involve data additions, updates and deletions
 that may require to happen in a certain order. If an error
occurs, then the entire batch fails.

Updating in batch requires sequential access - since it uses a magnetic

tape this is the only way to access data. A batch will start at the
beginning of the tape, then reading it from the order it was stored; it's
very time-consuming to locate specific transactions.

The information technology used includes a secondary storage

medium which can store large quantities of data inexpensively (thus
the common choice of a magnetic tape). The software used to collect
data does not have to be online - it doesn't even need a user interface.

Updating in real-time
This is the immediate processing of data. It provides instant
confirmation of a transaction. This involves a large amount of users
who are simultaneously performing transactions to change data.
Because of advances in technology (such as the increase in the speed
of data transmission and larger bandwidth), real-time updating is now
possible.

Steps in a real-time update involve the sending of a transaction data to

an online database in a master file. The person providing information
is usually able to help with error correction and receives confirmation
of the transaction completion.

Updating in real-time uses direct access of data. This occurs when

data are accessed without accessing previous data items. The storage
device stores data in a particular location based on a mathematical
procedure. This will then be calculated to find an approximate
location of the data. If data are not found at this location, it will search
through successive locations until it's found.

The information technology used could be a secondary storage

medium that can store large amounts of data and provide quick access
(thus the common choice of a magnetic disk). It requires a user-
friendly interface as it's important for rapid response time.
Reservation Systems Reservation systems are used for any type of
business where a service or a product is set aside for a customer to use
for a future time.

MERCHANT PAYMENT SYSTEM:-

-Electronic payment systems exist in a variety of forms which can be divided
into two groups: wholesale payment systems and retail payment systems.
Wholesale payment systems exist for nonconsumer transactions-transactions
initiated among and between banks, corporations, governments, and other
financial service firms. High-value wholesale payments flow through the three
major interbank funds transfer systems: the Clearing House Interbank Payment
Systems (CHIPS),6 the Society for Worldwide Interbank Financial
Telecommunications (SWIFT),7 and Fedwire.8 Electronic transfers utilizing
these types of payment systems are beyond the scope of this Note.

Retail electronic payment systems encompass those transactions involving

consumers. These transactions involve the use of such payment mechanisms as
credit cards, automated teller machines (ATMs), debit cards, point-of-sale
(POS) terminals, home banking, and telephone bill-paying services. Payments
for these mechanisms are conducted online and flow through the check
truncation system9 and the ACH.10 Electronic transfers involving these types
of payment mechanisms and payment systems are also beyond the scope of this
Note.

The distinction between wholesale and retail electronic payment systems

parallels the distinction that has evolved in regulating these systems. Wholesale
electronic payment systems are regulated by Article 4A of the Uniform
Commercial Code. Retail electronic payment systems are regulated by the
Consumer Credit Protection Act;11 the Truth in Lending Act12 and its adjunct,
Regulation Z;13 and the Electronic Funds Transfer Act (EFTA)14 and its
adjunct, Part 205 of Regulation E.15 This regulatory distinction reflects the
kinds of parties involved-rules for retail electronic payment systems are
fashioned with the consumer in mind whereas rules for wholesale payment
systems are fashioned with commercial parties in mind.

-The term 'electronic payment' is a collective phrase for the many different
kinds of electronic payment methods available (also meaning online payment),
and the processing of transactions and their application within online merchants
and ecommerce websites.
It is essential for all online businesses to be able to accept and process electronic
payments in a fast and secure way. Businesses can gain a significant advantage
over their competitors by providing an instant electronic payment service as it
lets customers pay by their preferred way of credit or debit card.

Electronic payments systems can also increase your cash flow, reduce
administrative costs and labour and provide yet another way for your customers
to pay. Care must be taken when choosing an electronic payment solution as it
will need to fit within the constraints of your particular online business and
integrate seamlessly within your website.