TRANSACTION PROCESSING SYSTEMS (TPS)

A Transaction Processing System (TPS) collects and stores data about transactions and sometimes controls decisions made as part of a transaction. A transaction is a business event that generates or modifies data stores in an information system. TPSs were the first computerized information systems. We encounter computerized TPSs frequently, including every time we write a cheque, use a credit card, or pay a bill sent by a company. A TPS used to record a sale and generate a receipt is primarily concerned with collecting and storing data. If the TPS validates a credit card or helps a clerk determine whether to accept a personal check, it also controls decisions made within the transaction. 

TPSs are designed based on detailed specifications for how the transaction should be performed and how to control the collection of specific data in specific data formats and in accordance with rules, polices, and goals of the organization. Most contain enough structure to enforce rules and procedures for work done by clerks or customer service agents. Some TPSs bypass clerks and totally automate transactions; such as the way ATMs automate deposits and cash withdrawals. A well-designed TPS checks each transaction for easily detectable errors such as missing data, data values that are obviously too high or too low, data values that are inconsistent with other data in the database and data in the wrong format. It may check for required authorizations for the transaction. Certain TPSs such as airline reservation systems may automate decision-making functions such as finding the flight that best meets the customer’s needs. Finally, when all the information for the transaction has been collected and validated, the TPS stores it in a standard format for later access by others. 

As anyone knows who has tried to make a reservation when a computerized reservation system is down, organizations rely heavily on their TPSs. Breakdowns disrupt operations and may even bring business to a complete halt. As a result, a well-designed TPS has backup and recovery procedures that minimize disruptions resulting from computer outages. 

Batch versus Real Time Processing

The two types of transaction processing are batch and real time processing. With batch processing, information for individual transaction is gathered and stored but isn’t processed immediately. Later, either on a schedule or when a sufficient number of transactions have accumulated, the transactions are processed to update the database. With real time processing, each transaction is processed immediately. The person providing the information is typically available to help with error correction and receives confirmation of transaction completion. Batch processing was the only feasible form of transaction processing when data were stored only on punched cards or tapes. Real time transaction processing requires immediate access to an online database. 

Batch processing is currently used in some situation where the transaction data comes in on paper, such as in processing cheques and airline ticket stubs. A batch approach is also used for generating paychecks and other forms of paper output that will be distributed after a delay. Unfortunately time delays inherent in batch processing may cause significant disadvantages. The central database may never be completely current because of transactions received while the batch was being processed. Worse yet, batching the transactions creates built-in delays, with transactions not completed until the next day in some cases. Even systems with interactive user interfaces may include lengthy delays before transactions are completed. For example, weekend deposits into many ATMs are not posted to the depositor’s account until Monday. Even though the ATM’s user interface is interactive, the system in a larger sense doesn’t perform real time processing. 

Compared to batch processing, real time processing has more stringent requirements for computer response and computer uptime. As is obvious when a travel agent says “Sorry, the computer is down,” the jobs and work methods of the people in the real time TPS are designed under the assumption that the system will be up and available.