Information Technology Reference
In-Depth Information
production. The result of processing business transactions is that the organization's records
are updated to reflect the status of the operation at the time of the last processed transaction.
A TPS also provides employees involved in other business processes—via management
information systems/decision support systems (MIS/DSS), the special-purpose information
systems, and knowledge management systems—with data to help them achieve their goals.
(MIS/DSS systems are discussed in Chapter 10.) A transaction processing system serves as
the foundation for these other systems (see Figure 9.1).
Information
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Figure 9.1
Special information
systems and
knowledge
management systems
TPS, MIS/DSS, and Special
Information Systems in
Perspective
Sophistication and
complexity
of processing and
analysis
Decision
support
Input and
output
Routine
MIS/DSS
TPS
Data
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More
Less
Transaction processing systems support routine operations associated with customer
ordering and billing, employee payroll, purchasing, and accounts payable. The amount of
support for decision making that a TPS directly provides managers and workers is low.
TPSs work with a large amount of input and output data and use this data to update the
official records of the company about such things as orders, sales, customers, and so on. As
systems move from transaction processing to management information/decision support
and special-purpose information systems, they involve less routine, more decision support,
less input and output, and more sophisticated and complex processing and analysis. These
higher-level systems require the basic business transaction data captured by the TPS.
Because TPSs often perform activities related to customer contacts—such as order pro-
cessing and invoicing—these information systems play a critical role in providing value to
the customer. For example, by capturing and tracking the movement of each package, ship-
pers such as Federal Express and United Parcel Service (UPS) can provide timely and accurate
data on the exact location of a package. Shippers and receivers can access an online database
and, by providing the airbill number of a package, find the package's current location. If the
package has been delivered, they can see who signed for it (a service that is especially useful
in large companies where packages can become “lost” in internal distribution systems and
mailrooms). Such a system provides the basis for added value through improved customer
service.
Traditional Transaction Processing Methods and Objectives
With batch processing systems , business transactions are accumulated over a period of time
and prepared for processing as a single unit or batch (see Figure 9.2a). Transactions are
accumulated for the length of time needed to meet the needs of the users of that system. For
example, it might be important to process invoices and customer payments for the accounts
receivable system daily. On the other hand, the payroll system might receive time cards and
process them biweekly to create checks, update employee earnings records, and distribute
labor costs. The essential characteristic of a batch processing system is that there is some delay
between an event and the eventual processing of the related transaction to update the orga-
nization's records.
With online transaction processing (OLTP) , each transaction is processed immediately,
without the delay of accumulating transactions into a batch (see Figure 9.2b). Consequently,
at any time, the data in an online system reflects the current status. This type of processing
is essential for businesses that require access to current data such as airlines, ticket agencies,
and stock investment firms. Many companies find that OLTP helps them provide faster,
more efficient service—one way to add value to their activities in the eyes of the customer.
Increasingly, companies are using the Internet to capture and process transaction data such
as customer orders and shipping information from e-commerce applications.
batch processing system
A form of data processing where
business transactions are
accumulated over a period of time
and prepared for processing as a
single unit or batch.
online transaction processing
(OLTP)
A form of data processing where
each transaction is processed
immediately, without the delay of
accumulating transactions into a
batch.
 
 
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