Transaction Processing System

1
Transaction Processing System, Characteristics
and Processing Cycle
Lecture 4
Inam Ul-Haq Assistant Professor (IT) University
of Okara Inam.bth_at_gmail.com
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)
• A computerized system that performs and records
  the routine transactions necessary to the conduct
  of the business
• Perform routine operations and serve as a
  foundation for other systems
• A Transaction of MIS (at operational level)
• Question a person using ATM machine is an
  example of TPS?

3
Batch vs. On-Line Transaction Processing

• Two types of Processing
• 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
• Real-Time processing
• 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,

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Batch vs. Real-time Processing(Real Time)
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Batch vs. Real Time Processing(Batch Processing)
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Order Fulfillment Process
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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

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Characteristics of TPS

• Performance
• Rapid Processing customers cant 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

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Objectives of TPS

• 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

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Processing Cycle

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

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Employees
Schematic View (Cont.)
Corporate databases ofinternaldata
Databasesofexternaldata
Corporateintranet
App databases Ebay.com, photo.net uses
Oracle Facebook.com built over MySQL
Decisionsupportsystems
Databasesofvalidtransactions
Application databases
Transactionprocessingsystems
MIS
Executivesupportsystems
Businesstransactions
Operational Databases (CRM)
Expertsystems
Drill-down reports
Exception reports
Demand reports
Key-indicator reports
Input anderror list
Scheduledreports
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Processing Cycle (Cont.)

• Database 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

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Processing Cycle (Cont.)

• 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).

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Processing Cycle (Cont.)

• 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?

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Processing Cycle (Cont.)
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Summary
0

• 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).

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Learning Assignments

• ePayment Methods (PayPal, Pynoor,Master-Card
  etc.)
• Anyone can buy anything online?
• Anyone can do eBanking?
• How to buy airline ticket?
• How to generate eCard through bank?