1. Transaction Processing System (TPS) BBA_MIS_19-20 1

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3. 3  A Transaction Processing system (TPS) is a type of information system that collects, stores, modifies and retrieves the data transactions of an enterprise.  e.g.; airline reservation systems, electronic transfer of funds, bank account processing systems. Designed to process routine business transactions Seeks time and cost efficiency by automating

4. BBA_MIS_19-20 4  Transaction: A business activity between seller and buy to exchange an asset for payment. Basic business operations such as customer orders, purchase orders, receipts, time cards, invoices, and payroll checks in an Organization.

5. BBA_MIS_19-20 5  Types of Transactions: Internal Transactions: Those transactions, which are internal to the company and are related with the internal working of any organization. For example Recruitment Policy, Promotion Policy, Production policy etc. External Transactions: Those transactions, which are external to the organization and are related with the external sources, are regarded as External Transaction. For example sales, purchase etc.

6. BBA_MIS_19-20 6 One of the first transaction processing systems was American Airline SABRE system, which became operational in 1960. Designed to process up to 83,000 transactions a day, the system ran on two IBM 7090 computers. SABRE was migrated to IBM System/360 computers in 1972, and became an IBM product first as Airline control Program (ACP) and later as Transaction Processing Facility (TPF). In addition to airlines TPF is used by large banks, credit card companies, and hotel chains.

7. BBA_MIS_19-20 7  In order to qualify as a TPS, transactions made by the system must pass the ACID test. The ACID tests refers to the following four pre- requisites:. Atomicity. Consistency. Isolation. Durability

8. BBA_MIS_19-20 8 Atomicity  Atomicity means that a transaction is either completed in full or not at all. For example, if funds are transferred from one account to another, this only counts as a bone fide transaction if both the withdrawal and deposit take place. If one account is debited and the other is not credited, it does not qualify as a transaction. TPS systems ensure that transactions take place in their entirety.

9. BBA_MIS_19-20 9  Consistency  TPS systems exist within a set of operating rules (or integrity constraints). If an integrity constraint states that all transactions in a database must have a positive value, any transaction with a negative value would be Refused.

10. BBA_MIS_19-20 10  Isolation  Transactions must appear to take place in isolation. For example, when a fund transfer is made between two accounts the debiting of one and the crediting of another must appear to take place simultaneously. The funds cannot be credited to an account before they are debited from another.

11. BBA_MIS_19-20 11  Durability  Once transactions are completed they cannot be undone. To ensure that this is the case even if the TPS suffers failure, a log will be created to document all completed transactions. These four conditions ensure that TPS systems carry out their transactions in a methodical, standardized and reliable manner.

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13. BBA_MIS_19-20 13  Rapid response  Fast performance with a rapid response time is critical. Transaction processing systems are usually measured by the number of transactions they can process in a given period of time.  Continuous Availability  The system must be available during the time period when the users are entering transactions. Many organizations rely heavily on their TPS. A breakdown will disrupt operations or even stop the business.

14. BBA_MIS_19-20 14  Data Integrity  The system must be able to handle hardware or software problems without corrupting data. Multiple users must be protected from attempting to change the same piece of data at the same time, for example two operators cannot sell the same seat on an airplane.  Ease Of Use  Often users of transaction processing systems are casual users. The system should be simple for them to understand, protect them from data-entry errors as much as possible, and allow them to easily correct their errors.

15. BBA_MIS_19-20 15  Reliability  Organisations rely heavily on their TPS with failure possibly stopping business. Backup and recovery procedures must be quick and accurate.  Modular Growth  The system should be capable of growth at incremental costs rather than requiring a complete replacement. It should be possbile to add, replace or update hardware and software components without shutting down the system.

16. BBA_MIS_19-20 16  Controlled Acess  Since TPS systems are often such a strong business tool, access should be restricted to solely those workers that need their use. Limited access to the system ensures that workers that lack the talents to regulate it cannot influence the transaction process.  Large volume of data  As TPS is transaction oriented, it generally consists of large volume of data which requires greater storage capacity.

17. BBA_MIS_19-20 17  Automation of Basic Operations  With automating the basic operations of the business enterprise, TPS provides timely documents and reports.  Benefits are easily measurable  TPS reduces the workload of the people associated with the operations and improves their efficiency by automating some of the operations. Most of the benefits of TPS are tangible and can be easily measured in monetary terms. Therefore, cost benefit analysis regarding the desirability of TPS is easy to make.

18. BBA_MIS_19-20 18  Source of input for other systems  It provides necessary data for tactical and strategic systems such as MIS and DSS applications.

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20. BBA_MIS_19-20 20  TPS has four main components:. Input. Storage. Processing. Output

21. BBA_MIS_19-20 21  Transaction processing system, capture and process data describing business transactions, update organizational databases, and produce a variety of information products. It should understand this as a transaction processing cycle of several basic activities.

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23. BBA_MIS_19-20 23  Data entry   The first step of the transaction processing c ycle is the capture of business data.Transaction data must be entered into the system.   For eg; transaction data may be collected by point-of-sale terminals using optical scanning of bar codes and credit card readers at a retail store or other business.   A number of input and output devices exist for entering data.   The documents generated at the source or point where the transaction occurs are called source document and become input data for the system.   For eg; when a customer returns an items at a store, the sales receipts becomes the source document for the transaction ‘return items for refund / replacement’.

24. BBA_MIS_19-20 24  Transaction processing  Transaction processing system process data in two basic ways  1) Batch processing, where transaction data are accumulated over a period of time and processed periodically.  2) Real-time processing, also called online processing where data are processed immediately after a transaction occurs.

25. BBA_MIS_19-20 25  Database maintenance An organizations databases must be updated by its transaction processing systems so that they are always correct and up-to-date. Therefore, transaction processing systems serve to assist in maintaining the corporate databases of an organization to reflect changes resulting from day-to- day business transactions. For eg; credit sales made to customer will cause customer a/c balance to be increased and the amount of inventory on hand to be decreased. Database maintenance ensures that these and other changes are reflected in the data records stored in the company’s databases.

26. BBA_MIS_19-20 26  Document and report generation   Transaction processing system produce a variety of documents and reports.   Eg of Transaction documents include purchase orders, sales receipts, customer statement etc..   Transaction reports might take the form of a transaction listing such as a payroll register, or edit reports that describe errors detected during processing.

27. BBA_MIS_19-20 27 Inquiry Processing Many transaction processing systems allow you to use the Internet, intranets, extranet, and web browser or database management query languages to make inquiries and receive responses concerning the results of transaction processing activity Typically, responses are displayed in a variety of pre specified formats or screens. For example, you might check on the status of a sales order, the balances in an account, or the amount of stock in inventory and receive immediate responses at your PC.

28. BBA_MIS_19-20 28  Input  The input function accepts data from outside the system so that the data can be processed in the system. This component provides data of TPS for processing. It is a Three-step process.  Data Capture:  Before transaction data can be brought into a transaction processing system, it must be acquired from a source a step called data capture. Often the data is captured by a person who writes the data on a piece of paper or on a form called a source document.  No longer manual:  – Old technologies : Bar Codes, Magnetic Strips (credit cards)  – New technologies : RFID, Smart Cards,