Prepared by Natalie Rose*Transactional Processing SystemsLecture 3

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Prepared by Natalie Rose*Definition of TPSA transaction is an event that affects an organization conducting its business.Transaction processing describes either the manual or computerized recording of the transactions of a business. A transaction processing system (TPS) is an information system that records and processes an organizations routine business activities.

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Prepared by Natalie Rose*Reasons for Recording TransactionsInformation for EmployeesInformation for ManagementInformation for Customers, Suppliers, and Business PartnersAudit Trails

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Prepared by Natalie Rose*Information for EmployeesRecording transactions enables employees to perform and coordinate their work.

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Prepared by Natalie Rose*Information for ManagementAll management levels use summarized and detailed records of business to make decisions. Transaction data can be used to help make decisions.

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Prepared by Natalie Rose*Information for Customers, Suppliers, and Business PartnersTransaction processing systems provide records of transactions for external parties. An external party can be another company or an individual. Individuals can use these transaction records to reconcile a charge-account statement, prove a purchase was made, and establish a purchase price.

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Prepared by Natalie Rose*Audit TrailsAudit trails can be used both internally and externally. Government agencies use transaction records to trace and verify the companys reporting of its revenues and expenses.

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Prepared by Natalie Rose*Transaction Processing SystemsExamplesPoint-Of-Sales SystemsOrder-Entry SystemsDistribution and Logistics SystemsPurchasing/Receiving SystemsReservation SystemsGeneral Accounting Systems

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Prepared by Natalie Rose*Point-of-Sale Transaction

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Prepared by Natalie Rose*What is a POS?A point-of-sale system records the sale of a product or service and updates company records related to or affected by the sale. POSs often use special input hardware to improve the speed, ease, and convenience of tracking a sale. POS terminals may be networked to a central computer or may operate independently. Independent terminals usually have limited functionality.

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Prepared by Natalie Rose*POS contNetworked POS stations provide the benefit of centralized database management, greater storage, and increased computing power; however, failure impacts all POS stations.

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Prepared by Natalie Rose*Order Entry Transaction

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Prepared by Natalie Rose*Order-Entry System

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Prepared by Natalie Rose*Order-Entry SystemsOrder-entry systems record and process the taking of an order. The primary objective of an order entry system is recording an order so that it can be filled. Order entry systems must also support prompt and rapid customer service. While order entry systems often include many POS features, these systems may require a shipping address, a billing address, and the ability to deal with back orders.

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Prepared by Natalie Rose*Distribution and Logistics SystemsDistribution and logistics systems are systems that move, store, and track inventory, complementing point-of-sale and order-entry systems. Distribution and logistics systems track products from the time that they first arrive at the warehouse, are ordered, and are shipped to the customer. Distribution systems can automatically reorder a product when an items reorder point has been reached.

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Prepared by Natalie Rose*Purchasing/Receiving SystemsPurchasing/receiving systems document transactions between a company and its suppliers. Transactions processed by these systems have both internal and external implications; A purchase order is a form sent to a supplier to document an order.

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Prepared by Natalie Rose*Purchasing/Receiving Systems

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Prepared by Natalie Rose*Reservation SystemsA computerized reservation system (CRS) describes a special type of order entry system used by companies that sell, rent, or allocate space or services. Reservation data entry systems must have access to a common database that tracks the capacity sold. CRSs typically use large mainframe computers.

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Prepared by Natalie Rose*Reservation SystemsMore recent technologies use the Internet as their wide area network. Access to mainframe reservations systems can occur through direct connections from terminals, dial-in modems, or the Internet. Reservation system security is a primary concern because of the systems open accessibility.

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Prepared by Natalie Rose*General Accounting SystemsIntegrated Accounting Systemspayroll systemsaccounts receivable systemsaccounts payable systems

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Prepared by Natalie Rose*A general accounting system records all financial transactions and classifies them into specific accounts. Integrated accounting systems generally include payroll, accounts receivable, and accounts payable subsystems. Payroll systems track employee hours, wages, and other benefits. Accounts receivable systems track monies and other debts owed to the company as payment for goods and services provided. Accounts payable systems may generate purchase orders and produce checks for paying the organizations bills.

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Prepared by Natalie Rose*Transaction Processing SystemCharacteristicsCapturing and Transcribing Datapaper dataelectronic data capturetranscribing from paper into electronic formBatch Versus Real-Time Processing

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Prepared by Natalie Rose*Capturing and Transcribing DataCompanies have the option of capturing data in paper or in electronic form.

Paper Data. A source document captures transactions on paper. Source documents can be generated internally or externally. Source documents provide a secure, hard-copy record of transactions.

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Prepared by Natalie Rose*Capturing and Transcribing DataElectronic Data Capture. On-line data entry is a data entry process in which computers capture transactions directly, eliminating the need for source documents.

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Prepared by Natalie Rose*Capturing and Transcribing Data Electronic data capture provides several advantages: input hardware can be used; tasks can be automated; paper storage is reduced; information loss can be minimized; data can easily be shared; data can be summarized; errors can be caught at their source; and computers handle information more effectively.

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Prepared by Natalie Rose*Capturing and Transcribing Data Electronic data capture disadvantages include: (1) computers or computer terminals are required at each location at which a transaction might occur; (2) terminals, support hardware, and support software can be expensive; and (3) computer failures can cause serious problems.

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Prepared by Natalie Rose*Capturing and Transcribing DataTranscribing from Paper into Electronic Form. While this approach is becoming less common, companies may elect to capture data initially on paper then convert the data into electronic form. Data entry clerks can either key or scan in data.

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Prepared by Natalie Rose*Batch versus Real-Time ProcessingTwo different methods are used to process data. Batch processing stores electronic records or transcribed paper records in a stand-alone computer file that other parts of the companys information system cannot use or access. Periodically, the computer processes the entire batch of records, updating the organizations information system.

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Prepared by Natalie Rose*Batch versus Real-Time ProcessingReal-time processing attends to data upon their entry, immediately updating the information system and making the data available to all users. Compared to real-time processing, batch processing uses fewer and less costly computer resources, allows a company to evenly spread the load on its computers over the entire day, and allows the use of microcomputers and other low-cost devices to create the electronic batch.

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Prepared by Natalie Rose*Batch versus Real-Time Processing(b) Real-time processing

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Prepared by Natalie Rose*Ensuring Effective Transaction Processing SystemsDeveloping Fast SystemsEnsuring System Reliabilityfault-tolerant systemsrecoverabilitytransaction processing monitorsHaving an Accessible SystemProviding Security

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Prepared by Natalie Rose*Developing Fast SystemsAs a rule-of-thumb, users should not have to wait longer than three seconds for a TPS response. The inability to process transactions quickly can delay business activity, increase costs, result in lost revenue, impact customer behavior, impact employee performance, and impact the organizations bottom line. The transaction data may be downloaded into a data warehouse that supports management reporting, analysis, and querying

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Prepared by Natalie Rose*Ensuring System ReliabilityTransaction processing systems, especially real-time, must ensure reliability. TPS failures can be classified as incorrect recording of a transaction or failure to operate. Incorrect or missing transactions leave no record of failure; systems that fail to operate generally cause a slowdown or stoppage of work. Fault-tolerant systems, recoverability, and transaction processing monitors are used to improve reliability.

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Prepared by Natalie Rose*Fault-TolerantFault-Tolerant Systems. Fault-tolerant systems (nonstop systems) are systems that achieve high reliability by using hardware incorporating redundancy and software designed to take advantage of this redundancy. The amount of redundancy depends on the extent of reliability desired. An uninterruptible power supply provides secondary sources of power. Systems with a higher tolerance for failure may limit redundancy to disk storage.

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Prepared by Natalie Rose*TP Monitors and Recoverability

Transaction Processing Monitors. Transaction processing monitors can help ensure acceptable and consistent performance in processing transactions, manage the interaction among layers of client/server systems, support multiple databases, monitor the interactions between the layers or the databases to make them operate seamlessly and reliably, and integrate tools and eliminate bottlenecks in transaction processing.Recoverability. The TPS should be able to reconstruct incorrectly logged or unlogged transactions.

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Prepared by Natalie Rose*Having an Accessible SystemAccessibility enables employees to record transactions whenever and wherever they occur. Operating in a global environment requires operating the TPS 24 hours a day. Backing up a TPS that operates 24 hours a day can be accomplished in either of two ways. First, the transaction data can be partitioned by area of the world. Second, multiple transaction logs can be kept.

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Prepared by Natalie Rose*Providing SecurityEmployees, competitors, or natural occurrences can harm a TPS. Transaction processing systems are particularly vulnerable because they collect transaction information from all locations where a company does business.

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Prepared by Natalie Rose*Developing and Updating Transaction Processing SystemsThe Development, Testing, and Production EnvironmentsDatabase Management Systems (Heart of the TPS)

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Prepared by Natalie Rose*The Development, Testing, and Production EnvironmentsUnanticipated errors can occur when small changes are made to a TPS program. TPSs are often called legacy systems. To ensure TPS reliability as the TPS software is changed, three parallel environments are created. The development environment contains in-process copies of the TPS software and data for software developers to use in checking and improving their new programs.

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Prepared by Natalie Rose*Database Management Systems as the Heart of TPSDatabase management systems provide a variety of services needed by a TPS, including simplifying the storage and retrieval of data, controlling the simultaneous access and update to data by two or more users and allowing data sharing, and reducing the dependency of the TPS on a particular hardware environment. These services are reasons why the TPS transactions are usually recorded by a DBMS

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