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T Processing System

This document discusses transaction processing systems (TPS). It defines TPS as systems that process routine business transactions either manually or automatically. It describes key characteristics of TPS including rapid response, reliability, inflexibility, and controlled processing. It also discusses different types of TPS such as batch processing, real-time/online processing, and hybrid systems. Finally, it outlines the typical processing cycle that TPS follow including data capture, validation, processing, reporting, and inquiry capabilities.

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34 views

T Processing System

This document discusses transaction processing systems (TPS). It defines TPS as systems that process routine business transactions either manually or automatically. It describes key characteristics of TPS including rapid response, reliability, inflexibility, and controlled processing. It also discusses different types of TPS such as batch processing, real-time/online processing, and hybrid systems. Finally, it outlines the typical processing cycle that TPS follow including data capture, validation, processing, reporting, and inquiry capabilities.

Uploaded by

akj1992
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Transaction Processing Systems

Manual or automatic all businesses systematically process transactions Function: process routine, day-to-day business activities Computerized TPS:
Batch Online (real-time, OLTP)

The foundation of business systems

Transaction Processing Systems


Cross-functional
crosses different functional business areas (accounting, finance, inventory management, human resources, etc.)

Transactions can include:


Banking, Financial, Stocks, etc. Purchases & Orders (phone, Internet, direct) from Airline reservations to Toll Booth Operations

General characteristics for any TPS


Rapid response: Customers should not be made wait a long time. The quicker the response time the happier the customer and the more revenue that can be collected. Reliability: This information system involves cash. Any mistakes here can have serious consequences for the companies bottom line, customer satisfaction, auditors, the taxation department and the list goes on. I think you get the idea. You really don't want mistakes when it comes to money.

General characteristics contd


Inflexibility: You don't want people making up their own rules when it comes to money. It must be performed the same way every time. If any step is altered it becomes more likely that a mistake may be made. With computers it must be rigidly adhered to. Controlled processing: There must be procedures in place to check that everything and everyone is doing the right thing. On the computers end is something called a transaction processing monitor to ensure that everything is right with the TPS but there must also be human controls to ensure that everyone is doing the right thing.

Value of TPS
Efficiency
Paperless Transactions Reduce manual data entry (errors) Speed up transaction process Elimination of redundant steps

Online Transaction Processing (OLTP)


Real-time systems, immediate feedback Real-time Reports and databases updates

Batch TPS
Originally, the only available option Transactions accumulated over period of time Time period day, week, month Transaction records accumulated in files When batches are processed, what happens?
Update databases Generate reports Generate transactions for other systems

Batch vs. Real-time


Batch Processing transaction data are accumulated processed periodically Real-time Processing also called online immediately processed Syncronization issues

used to be necessary What if two people order because of synchronization the same product at the problems same extact time, but there is only one product left?

Batch Processing Pros and Cons


Pros
Relatively easy to program, install and maintain Batches can be processed during low-activity periods

Cons
Information is delayed

Online TPS (OLTP)


Transactions are processed in real time Required for any modern application where time is critical Well supported by client/server computing model

Hybrid TPS
OLTP applications can feed transactions to batch systems
Examine: GL only updated once per day

Real time order capture with delayed processing

TPS Activity Model


Data capture
From online entry or external system

Data validation
Should be done as close to source as possible

Processing
Data manipulation Database updating Generation of transactions for other systems

Archive Transaction Create documents and reports

TPS Requirements
Capture, process and store transactions Produce reports and information about transactions Produce transactions for other TPS Be accurate and timely Be efficient require less labor Increase customer service Increase competitive advantage

Processing Cycle
Data Entry Collecting and capturing transactions No longer manual:
Old technologies Bar Codes, Magnetic Strips (credit cards) New technologies RFID, Smart Cards,

Processing Cycle
Transaction Processing Synchronization Issues:
Which transaction to process next. Breaking ties Dependencies
Cant schedule delivery before credit approval.

Processing Cycle
Database Maintenance TPS helps ensure the databases are up-todate and correct. Multiple databases A single purchase
decreases quantity Inventory Database decrease credit Credit Card Database increase sales Sales Database

Processing Cycle
Document/Report Generation Examples
purchase orders pay checks sales receipts invoices bank statements

An MIS also generates reports, but TPS reports are operational (no analysis).

Processing Cycle
Inquiry Processing Examples
when was a purchase made does a customer have any credits on their account was an item scheduled for delivery was a package signed for

An MIS also allows for inquiries, but the information available is summarized (or aggregated), i.e., What are the total sales for a whole department? What is the best selling product?

Processing Cycle

Invoicing

Invoices Products

Customer

Shipped Orders

Shipment Execution
Routing & Scheduling

Customer Places an Order

Order Entry Sales Config.


Actual Order

Schedule Routes

Planned Shipments

Shipment Planning Inventory Control


Picking List Inventory Status

Order Entry Invoicing Sales Config.

Invoices Product Data Products Customer Data Customer Inventory Data Prices Fulfilled Shipped Orders Credit Inventory Orders Status Shipment Levels Customer Places an Order Execution 1. Collect 2. Verify 3. Authorize Orders Orders order Product #s Order Entry Credit information In-stock Routing &

Start of Transaction

Schedule Routes

Scheduling

Sales Config.

Back Orders Planned Shipments

Rejected Actual Order Orders 4. Notify Shipment Customer

Customer

Notification

Planning

Open Orders

Inventory Picking List Back Orders/ Rejected Orders Control to be fulfilled Orders ready

Order Data Inventory Status

Transaction Processing System


An Order Entry System affects
accounting data inventory data customer data financial data invoicing data

Enhanced Feedback:
Inventory is updated at the point of ordering, not at the point of fulfillment. Eliminates surprise backorders.

Enhanced Feedback
Reduce Transactions
Customer can be notified of back order before credit authorization. Customer could cancel or change order Avoids un-necessary transactions
Credit check/charge on an order that might be canceled.

Faster Feedback
Pricing or production levels could be set based on current inventory and order status Increase price if production cant keep up with orders Decrease price if inventory levels are high.

Manager
Change Product Price

Various Reports

MIS/DSS
Inventory Data Product/ Price DB Inventory DB Production Data

Updates/ additions to Operational Data Customer DB

Order Data

TSP
Order DB

PCS

Customers Grunts

Assembly Line

Management Issues
Uptime
How long can the system be down before significant costs are incurred?

Processing Delays / Response Times


How quickly must a transaction be processed? What is the worst online response time that is acceptable

Management Issues (2)


Disaster Recovery
What plans are in place to recover lost business data? What plans are in place to resume business processing in case of disaster?

Audit
Can you verify the integrity of the system? How will you know if transactions are not processed or are processed incorrectly?

TPS By Function
Order Processing Procurement & Inventory Control Accounting

Order Processing TPS


Order capture
Variety of means

Configuration Shipment planning and inventory allocation


Prioritize orders, select shipment locations, allocate inventory to orders

Shipping and warehousing


Picking, packing, invoicing, reporting

Procurement
Inventory Control
Raw materials, WIP, FGI, etc

Purchase Order Processing


Generating, transmitting, maintaining purchase orders

Receiving Accounts Payable


Boundary between procurement and accounting

Accounting
Accounts Payable Accounts Receivable Budget Payroll General Ledger Asset Management

Disadvantages of Functionally Organized TPS


Processing inefficiency Data redundancy
Causes integrity problems Inefficient

Temporal integrity problems


Caused by different times at which processing occurs

Lack of information coherence

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