Transaction Processing System by PastorGallo

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									          Transaction Processing Systems
A. Introduction
A transaction is any event that generates or modifies data that is eventually stored in
an information system. Transaction processing systems collect, store, modify and
retrieve the transactions.

1.          Four characteristics of a TPS are:
      Rapid response
            Fast performance with a rapid response time is critical for business
            A breakdown will disrupt operations or even stop the business.
            Every transaction is processed in the same way regardless of the user.
      Controlled processing
            The processing in a TPS must support an organisation’s operations.

2.           Batch Processing
Batch transaction processing collects the transaction data as a batch and processes it
later. Its kept for processing at a convenient time.
        processing large volume of similar data lowers costs
        processing a batch may take several minutes, hours or days.
        used when a time delay will not decrease the usefulness of the results.
        involves a large batch of an identical data type.

         The processing schedule is predetermined.
         Will halt immediately if an error occurs in any one of the tasks.
         Errors cannot be corrected during processing. If an error occurs during a
          batch process, then the error must be corrected and the batch process
          restarted from the beginning.
         Must have exclusive access and control over its data files.
         Sorting the transaction data is expensive and time consuming.
         Does not provide data that are fully current.

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3.           Real Time Processing
Real Time Transaction processing is the immediate processing of data. It provides instant
confirmation of a transaction.
                   Involves using a terminal to enter data and display results.
                   Computer network links terminals to mainframe
                   Involves large number of users performing transactions
                   Also called online transaction processing

Two main concerns :
       Concurrency:
            ensures that two users cannot change the same data at the same time.
       Atomicity :
          ensures that all of the steps involved in a transaction are completed
          successfully. If any step fails the system ceases.

4.           Monitor
 It is a software that allows the transaction processing application programs to run
efficiently. It provides a standard interface between terminals, application programs and
              is ready to receive the transaction data.
              It is used in real-time processing to eliminate a number of possible
              Some TPS add an entry time to the transaction data in an attempt to trace
               the data if it is lost.

 5.          Data Validation
 Validation can be achieved in several ways:
         The correct data type . alphanumeric, numeric, alphabetic.
         Verification at data entry time, so that only the correct format and
          number of characters may be entered.
         Field checking occurs when the transaction data is entered into a database.
          The data is organised into files, records, fields and characters.
         Data validation is carried out by checking the files, using a range check, list
          check, type check or check digit.

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 6.          Batch Processing Vs Real Time Processing

Real time processing                                    Batch processing
       Each transaction is unique. It is not part of        The database is not
        a group of transactions                                accessible all of the
       Requires the master file to be available               time for batch
        more often for updating and reference                  processing.
       Has fewer errors as transaction data is              The data is organised
        validated and entered immediately.                     and stored before the
       More computer operators are required, as               master file is updated.
        the operations are not centralised.                  Errors can occur during
       more difficult to maintain                             these steps.

7.           Manual transaction Vs Automated Transaction
Clerk manual systems included:
        Gathering data on paper application forms
        Transferring the data to their own system for storage
        Storing data in records in a sequence so that they could be easily retrieved
        Transcribing information to invoices, orders and accounts
        Updating records with additions, deletions and editing

Automated transaction processing:
Automated transaction processing can achieve much more than any number of clerks
manually sorting, transferring, sorting and copying data in the creation of
accounting documents.
         Punched cards and tapes were used when batch was the only method of
          transaction processing.
         Transaction Processing was the first to utilise the power of the
          computer back in the 1950’s, with UNIVAC
         Costs for computer time was high, and there was a need for a greater
          processing speed.
         People are used to record the data about the business activities.
         Computerisation of a manual transaction processing system provides
          significant benefits to the business:
         Increases the rate at which products are sold. There is less time taken for a
          customer to purchase a product.

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             It provides information on which products are in demand. The business knows
              what products are selling from the inventory database. Determine purchasing
             Automated transaction processing is faster than any number of clerks
              manually sorting, transferring, sorting and copying data in the creation
              of accounting documents.

8.              Components of TPS

Users        These are people within the company that run and use the
             TPS. These individuals will access the data from the online
             system to check inventory, orders, find and retrieve data to
             use in other planning systems and so on.
Participants The people who perform the transaction processing, either as
             real-time or as batch. The types of actions they perform will
             therefore vary depending on the type of TPS.
People       People from the environment are becoming participants in real-
             time processing systems as they directly enter transactions
             and perform validation.

B. 1                  Examples of Real Time TPS
         a.     Reservation systems are used in many businesses to put aside a
                service or product for a customer.Eg. Travel Agents.
         b.     Point of Sale Terminals are used by retail stores to sell goods and services.
                The product is generally identified by its barcode, and price and other
                relevant data about the product can be found form the database.
         c.     A library loan system is used to keep track of items borrowed from the

2.                    Examples of Batch TPS
         a.     Cheque clearance involves checking that the person who wrote the cheque
                has enough money in his/her account to cover the cheque.
         b.     Bill generation . organisations create a bill, or invoice, for goods or services
                that have been supplied to a customer. They usually generate a group of bills
                at a scheduled time and done as a group.
         c.     Credit cards are performed in real-time, but the only online check are that
                the card is not listed as lost, stolen, cancelled or over the card limit.

         d.     The printing of documents from the print queue (both network and non-
                network) is a batch process. The document is written to a file before
                being printed at the printer.

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3.                     Reservation System
Data Flow Diagram/ System Flow Chart




Participants and

Information and

Issues arising

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4.                 Point-of-Sale

Data Flow Diagram/ System Flow Chart




Participants and

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Information and

Issues arising

5.              Library Loan
      Data Flow Diagram/ System Flow Chart




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Participants and

Information and

Issues arising

6.           Generation of Bills (Batch)
Data Flow Diagram/ System Flow Chart

                 Meter Reading

                                   Customer Database
                 Calculate Bill
                                   Charge rates

                   Print Bill

                    Update         Consumer
                   Database         Database

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Participants and

Information and

Issues arising

C.                   Storing and Retrieving

1.            File types in database for TPS
A file is a block of data containing related records. Every TPS uses files to organize and store its
              files                                       Characteristics
      Master                keep permanent data such as data about employees or customers.
                            It is completely rewritten whenever any records in the file are
                            changed (inserted, modified, deleted).
      Transaction           contain records about events. When these records are processed,
                            changes are made to the master files. For example sales

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                       information used to update product database or customer
     Report            contains data that has been formatted for presentation.
     Work              temporary file in the system used during processing
     Program           contains instruction for processing data.

2.           Searching for Files
Linear Search
Linear search starts from the beginning, and works its way one by one (sequentially) until
it finds it’s specific target. This search will work ordered or random.
Binary Search
Divides the array into two parts: Upper and Lower part. The process is continued until
either the value is found or there are no more elements in the data set to be checked.
At each division there are three possibilities for the target to exist (if it exists in the
data set)
               1. the target lies at the division point
               2. the target lies to the left of the division point
               3. the target lies to the right of the division point

3.                 Paper Storage
Data for transactions are normally stored in a digital form in databases and files
for processing and updating.

Paper copies of invoices, delivery dockets are also a part of the system as manual filing
systems still operate in many companies for the batch paperwork of each days
Paper records in their original hard-copy format have several disadvantages:
      The storage of paper is bulky requiring enormous physical space
      It is difficult to manually find all the occurrences of text in multiple
      A separate index or catalogue system must be maintained to allow documents
       to be located
      Sorting large quantities of paper documents is a slow and unreliable

Document Imaging
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          Documents scanned and saved as images
          Cannot be searched
          Cannot be edited
          Identical to original but in digital form
          Saves storage space
          Separate indexing systems are required to access the scanned documents as
           searches cannot be done on the text contained in them

Optical Character Recognition (OCR)
Pages containing text are scanned and saved as image files
Character recognition software then processes the images to identify the different
shapes of the characters
Support hyperlinks

Type        Advantage                                 Disadvantage
HTML        Public domain format                      Not platform dependent
            Standardised format                       Text and images are separate
PDF         Text and images in same file              Copyrighted format
            Contents, index lists, bookmarks,         Specialised software required
            thumbnails,                               Needs browser plug-in for
            comments                                  viewing
            Documents can be locked

4.                   Data warehouse
Businesses use computerised database to handle all transactions. Large amount of data
from accounting, sales, distribution, personnel, etc can all have separate database.

Data warehousing brings together all the information stored in the various data formats
and structures from an organisation into a single data store.
A data warehouse provides data that is:
      Consolidated-     Data is organised using consistent naming conventions,
                         measurements, attributes and semantics.
      Subject-oriented
                         Data that is irrelevant for executing reporting and making
                         searching difficult is removed. Only key information is available
                         for analysis.

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      Historical Data stored is historical. It was accurate when it was collected. The
       data stored in a data warehouse represents a particular point in time and never

      Read-only        After data has been moved to the data warehouse successfully,
       it does not change unless the data was incorrect.

5.                  Data Mining
A class of database applications that look for hidden patterns in a group of data that can be
used to predict future behavior. For example, data mining software can help retail
companies find customers with common interests. The term is commonly misused to
describe software that presents data in new ways. True data mining software actually
discovers previously unknown relationships among the data.

D.                  Backup Procedures
A backup is a copy of files or a file system created in case the originals are damaged or
The backup is stored on media such as a tape or disk that is generally portable and
Backup is one of the most important procedures that a system administrator must
perform because it is usually their first line of defence against data loss.

The DBMS will contain both backup and recovery capabilities for getting the database up
and working ask quickly and accurately as possible after hardware failure or a system
Backup is the storing of additional copies of the database and transaction records, so
that in case of hardware failure, user error, vandalism or natural disaster, a copy of the
data will survive and can be restored.
The more valuable the data the:
      More often the files should be backed-up
      More copies should be made
      Greater the number of locations where the back-ups should be stored.

1.           Full Backups

This week               Last week                      Week before last
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     Son                 Father                             Grandfather

Grandfather, father, son is three generations of the kept files for successive backups.
This allows for two previous versions of the files to be stored in case some error has
been passed on from one generation to the next.

2.                 Partial backups
Differential backups, which have a full copy of the files from time to time, as well as a
regular copy of those files that have changed since the last full backup.

Incremental backups, which are copies of all files that have changed since the last
backup of any kind, not just since a full backup.

Type           Advantages                           Disadvantages
Differential   The full backup and only the         Slow by the end of the week
               last daily backup have to be         Each backup needs more space
               loaded to restore all the data
Incremental    Faster backups                       The full backup plus all the
                Uses less space                     daily backups have to be
                                                    loaded to restore all the data

     3.         Storage
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Offsite Storage
It refers to a location that is physically separated from the main system. In case of
vandalism or a natural disaster that might destroy the premises and all the files stored
out of site will be safe.

On-site Storage
 Requires several levels of security including a fire-proof backup storage safe, generally
in a different location or preferably a different building to the operation files. It
refers to a location that is physically close to the system and gives faster access to the
backup data but requires extra precautions.

Storage Media ranges from Zip disks to Magnetic tape. Tape media, though sequential, is
quite commonly used since it is economical for large backups.

4.                 Backup Software
Backup Software is designed to manage the copying of selected files to backup media,
generally offers automated scheduling as well as options for full, differential or
incremental backups. Features of backup software:

      Combinations of full and incremental or full and differential backup
      Backup of all or selected files
      Selection of files for backup by date, size, type
      Restoration of all or selected files to their original or other directories
      Optional compression
      Optional password to access a backup set Unattended backup
      Scheduled backup allowing overnight operation
      Encryption of the backup, requiring a decryption key to unlock the backup set
      Logs the success of the backup
      Tolerates files being left open, by prompting the user to close them rather
       than aborting the backup

5.                 Recovery

Recovery .   recovery testing is done to devise the most appropriate method of regaining
data loss.

Backward recovery is used to undo unwanted changes to the database, due to aborted

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Forward recovery begins with the backup copy and processes all the transactions from
the partial backups in order, through to the most recent. This method is faster and
more accurate than the backward method.


TYPE               STORAGE       PERIOD           SPEED/ACCESS           COST
Floppy             1.4MB         Short term       Slow/direct            expensive
6mm tape           2GB           Long term        Slow/sequential        Noisy/inexpensive
12mm tape          60-400MB      Long term        Slow/sequential        Inexpensive tape
                                                                         Drive expensive
4mm DAT            1-4GB         Long term        Slow/sequential        inexpensive
8mmDAT             250MB         Long term        Slow/sequential        inexpensive
Digital linear     20GB          Long term        Fast/sequential        Inexpensive tape
Tape                                                                     Drive expensive
M O disks          650 to 10GB   Long term        Slow/direct            inexpensive
CD-RW              650           Medium           Slow/direct            inexpensive
DVD                17GB          Medium           Slow/direct            Inexpensive tape
                                                                         Drive expensive

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Hard disk        80GB             Medium           Very fast/ direct      inexpensive
ZIP/JAZ          100MB-%GB        Short term       Very fast/direct       inexpensive

6.                  Updating in Batch
In batch processing paper invoices and records were collected in batches. Transactions
were then updated on a fixed basis.
              Batch processing done today
When transactions are recorded onto paper or stored on a magnetic tape. There are two
        Transaction File is created to collect and store data. Data must be sorted and
         put in a sequential order.
        Master File is updated. The data is read sequentially and additions, deletions
         and updates are made.
                                                                      Data Entry
              What actually happens

          Retrieving the transaction from a magnetic tape.
       Reads all data in the order it was stored                                Transaction File
         The transaction file would be sorted in the
          same sequence as the master file.
         Transaction records will be matched with
           corresponding master file records.                                                  Batch run
         Both files are read in sequential order.
         Some master file records will have no transactions,
           in which case, the program will simply copy the
           old master file record to the new master file.
          When a match occurs, the applicable update processing                  Master File
          is performed and a record written to a new output
          master file.

              Points to consider when batch processing
    The source documents which are grouped together as a lot.
    The total number will be predetermined but rarely exceeds 100.
    Each batch should contain only one transaction type: debit, credit, monthly
    Source documents specially designed with data entry considerations where data is
     requested in a logical manner as used in processing.
    Each batch will contain another document, a batch header on which batch number,
     data and transaction type and number of records in batch will be calculated.

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             Data entry:
For data entry, batches would normally be keyed in twice: one initially, and by another
operator to validate the entry.

An edit computer program would read the transaction file and validate its content.
The validation would involve:
         ensuring only valid data types were contained in relevant fields(e.g. numbers,
         Data value range (e.g. between 1 to 12) in terms of months of year.
         Check digits on codes( e.g. 4 digits for post code).
         The number of records in a batch to be equal to the number of records in the
          batch header record.
         Creating an edit report of all transaction records and errors.
     Corrections would be re-keyed in and edit program re-run.

7.                  Updating in Real-time
Real-time is the immediate processing of data usually online. It provides for immediate
editing and correcting. Also provides instant confirmation of a transaction and requires
access to an online database.

           It reflects the current situation, rather than an out- of-date one.
           It is not fast, but all of the processing takes place during the transaction. It
            allows for a quicker response resulting in the movement of objects displayed.
           Using a terminal to enter data and display the results of the TPS
           Large number of users who are simultaneously performing transactions to
            change data.

                                        Data Entry

             Transaction file                                                    Master File

     Enter data
     Retrieve the appropriate record from
       the master file
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      Update the record
      Send the appropriate response back to the participant.

                          IT Required

The hardware required for real-time processing includes large capacity secondary
storage with direct access files so that response times is very quick.
The software must enable online work for multiple simultaneous use, as well as a simple
user-friendly interface.

E.                 Information Processes

1.           Collecting. Hardware

MICR (Magnetic Ink Character Recognition)
MICR systems are used by banks to read account numbers on cheques. Characters are
printed using magnetic ink. When MICR occurs, signals are sent to the computer
identifying each cheque as presented.

MICR Fonts
ATM (Automatic Teller Machine)
             An ATM is a banking terminal that performs common banking transactions,
             such as deposits, withdrawals, obtaining account balances or transferring
             money from one account to another. When people complete a transaction
             using an ATM, they are participants in a real-time transaction processing

Barcode Readers
Barcode readers are used in retail industries to collect product
information at point of sale.

2.           Collecting Forms
A form is a document used to collect data from a person. When the form is completed, it
is processed in batch or real-time. Forms minimise data entry errors by providing the
correct format for the user or by using checkboxes, radio buttons, etc.

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 Dairy / Frozen : Cheese : Creamed Cheese
Showing items 1 to 22 of 22                                                                     Page 1

Paper Forms
Paper forms are written to provide the data and then batch processed at a later time.

Advantages                              They can be stored and processed in batches
                                        The can be signed, unlike electronic forms
                                        The customer does not have to be computer
Disadvantages                           They can accept data that is invalid
                                        The customers may miss required details.
                                         Copies of a large number of paper forms are
                                        expensive to make.
                                        They are difficult and bulky to store.
                                        A customer’s writing may be difficult to

3.          Online Data Collection
The screen forms are completed to populate databases, and can be processed in real-
time or batch.

Web Forms
Web forms are for users wanting to purchase products from Internet companies. The
user details will go into in a database, and may be processed as either batch or real-time.

Analysing Data
Once the transaction data is processed and stored, it may be analysed. The output from
one TPS becomes input for other information systems such as DSS (Decision Support
Systems) and MIS (Management Information Systems).

Decision Support Systems (DSS).
DSS help people to make decision by providing information, models and analysis tools. It
supports the decision-maker by providing tools such as spreadsheets to assist in the
examination of the data

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Management Information Systems (MIS)
MIS provides information for the organization’s managers. It shares the data from the
TPS, which is then manipulated to create reports. These reports can assist managers in
their decision-making.

4.                   Reports Types

        Report Types                                Characteristics
1    Periodic              provided on a regular basis, used by all levels of management
2    Detail                list relating to a product or an activity to be performed
3    Forecasting           make projections about business trends. Also known as
                           planning reports
4    On-demand             Generated usually in response to a specific need
5    Summary               Combination of data showing totals over different areas
6    Exception             alerts management to unexpected situations that need special

F.                               Social and Ethical Issues

1.           Changing Nature of Work
Automation of jobs

      TPSs has made businesses more efficient by offering a range of new services.
This has caused many jobs to change. Multi-skilling, de-skilling and up-skilling taking place
with the improvements in technology.
      Workers are required to do ongoing training or lose the job.

2.           Clerical Work
Typing and clerical duties are gone due to real-time processing. TPS allow user to enter
and retrieve data which a clerk used to do.

3.           Bias data collection
Bias means that the data is unfairly skewed or gives too much weight to a particular
result. Can be in the form of methods used in the collecting, processing or presenting of

4.           Security

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Security refers to the protection of the data once it has been collected. Business
rivals and former employees may wish to steal, destroy data belongings to a business.
There is a greater risk when the data is accessible to multiple users in a real-time
transaction processing system.
       Passwords and biometric methods such as fingerprint and eye scan.
       Encryption: Data is coded, transmitted and then converted back into its original
       Firewalls check the password of anyone trying to access a network.

5.           Accuracy
Despite the importance of accurate data collection and processing, errors may occur at
many states.
     Data Collection Errors – errors due to poor handwriting, misreading of
       questions, etc.
     Data Entry Errors        - takes information from the wrong form.
     Out-of-date Errors       - a person moves, changes their name on marrying.
     Mismatching Errors       - different person, maybe with a similar name.

       Improvements to Data Accuracy
                Careful design/ wording will helps limit possible errors
                Checking data for accuracy through data validation

6.           Integrity
This refers to the correctness and reliability of the data. Data should be current ie must
be updated constantly. It must pass an ACID test.
      Atomicity - when all steps in a transaction are completed. If one fails the
                   transaction is aborted.
      Consistency- when the tps transforms the system and the database from one state
                   to another. E.g. always crediting and debiting the same amount.
      Isolation- transaction is processed independently even though other people are
                   using the same database. It should not interfere with each others
      Durability- the changes made to the database remain permanent when completed.

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