Transaction Processing System,

Characteristics and Processing Cycle

Inam Ul-HaqLecturer in Computer Science

UE, Okara Campusorganizer@dfd-charity.com, inam@ue.edu.pk MIS

, Uni

vers

ity o

f E

duca

tion,

Oka

ra C

ampu

s

1

MIS

, Uni

vers

ity o

f E

duca

tion,

Oka

ra C

ampu

s

2

Transactions

• Transactions…• Basic business operations such as customer orders, purchase orders,

receipts, time cards, invoices, and payroll checks in an organization• A business activity between seller and buy to exchange an asset for

payment.

• Transaction processing systems (TPS)• Perform routine operations and serve as a foundation for other

systems • OR• TPS is an information processing system for all business transactions

involving collection, modification and retrieval of transaction data• A Transaction MIS

MIS

, Uni

vers

ity o

f E

duca

tion,

Oka

ra C

ampu

s

3

Batch vs. On-Line Transaction Processing• Two types of TPS:

• Batch processing• A system whereby business transactions are accumulated over a

period of time and prepared for processing as a single unit or batch

• Manufacturing products, supply chain, salaries

• On-line transaction processing (OLTP)• A system whereby each transaction is processed immediately,

without the delay of accumulating transactions into a batch• Real-time transaction• Mostly in Online shopping• Uses PCI cards(Payment Card Industry: MasterCard, Visa, Maestro,

American Express, Discover, )• Paypal or WorldPay, WePay, eWay, ICEPAY,

MIS

, Uni

vers

ity o

f E

duca

tion,

Oka

ra C

ampu

s

4

Batch vs. On-Line Transaction Processing(Online TPS)

MIS

, Uni

vers

ity o

f E

duca

tion,

Oka

ra C

ampu

s

5

Batch vs. On-Line Transaction Processing(Batch Processing)

MIS

, Uni

vers

ity o

f E

duca

tion,

Oka

ra C

ampu

s

6

Functions of TPS

• Input Functions• Place an order for LUNCH

• Processing Functions• Pizza is being prepared and served

• Output Functions• Go to counter for payment, show discount cards, get invoice

Characteristics of TPS

• Performance• Rapid Processing : customers can’t wait for TPS to respond.

• Reliability: Breakdown will disrupt or stop business• E.g.Banking, Financial, Stocks, Airline reservations• Consistency: All parties must agree on facts of exchange• Atomicity: All operations fail or succeed• Data Integrity• TPS is primarily concerned with data integrity• Efficiency• Paperless Transactions• Reduce manual data entry (errors)• Speed up transaction process• Elimination of redundant steps

MIS

, Uni

vers

ity o

f E

duca

tion,

Oka

ra C

ampu

s

7

Objectives of TPS

MIS

, Uni

vers

ity o

f E

duca

tion,

Oka

ra C

ampu

s

8

• Ensure data and information integrity and accuracy• Produce timely documents and reports• Increase labor efficiency• Help provide increased and enhanced service• Help build and maintain customer loyalty• Achieve 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,

MIS

, Uni

vers

ity o

f E

duca

tion,

Oka

ra C

ampu

s

9

Corporatedatabases

ofinternal

data

Databasesof

externaldata

Databasesof

validtransactions

Operational Databases

(CRM)

Transactionprocessing

systems MIS

Decisionsupportsystems

Executivesupportsystems

Expertsystems

Businesstransactions

Input anderror list

Drill-down reports

Exception reports

Demand reports

Key-indicator reports

Scheduledreports

Employees

Corporateintranet

Application databases

Un

iver

sity

of

Ed

uca

tion

Ok

ara

Cam

pu

s

10

App databasesEbay.com, photo.net uses OracleFacebook.com built over MySQL

Schematic View (Cont.)

Processing CycleDatabase Maintenance• TPS helps ensure the databases are up-to-date and correct.• Multiple databases (internal & external)• A single purchase• decreases quantity – Inventory Database• decrease credit – Credit Card Database• increase sales – Sales Database

MIS

, Uni

vers

ity o

f E

duca

tion,

Oka

ra C

ampu

s

11

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). M

IS, U

nive

rsity

of

Edu

catio

n, O

kara

Cam

pus

12

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?

MIS

, Uni

vers

ity o

f E

duca

tion,

Oka

ra C

ampu

s

13

Processing Cycle

MIS

, Uni

vers

ity o

f E

duca

tion,

Oka

ra C

ampu

s

14

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 (out-of-stock products). M

IS, U

nive

rsity

of

Edu

catio

n, O

kara

Cam

pus

15