A transaction processing system (TPS) collects, stores, modifies, and retrieves data about business transactions. TPS are designed to efficiently process large volumes of routine transactions through automation. The objectives of a TPS are to accurately process transaction data, maintain data integrity, produce timely reports, and increase efficiency. A TPS has users within the owning organization and participants who conduct transactions. It uses either batch processing, where transactions are collected and processed in batches, or online transaction processing, where each transaction is immediately processed. The transaction processing cycle includes data collection, editing, correction, manipulation, storage, and document production.

1. Transaction Processing System
Presented by:
Vidhu Arora

2. Introduction
• A Transaction Processing System (TPS) is a type of information
system that collects, stores, modifies and retrieves the data
transactions of an enterprise.
Example : airline reservation systems, electronic transfer of funds, bank
account processing systems.
• Designed to process routine business transactions
• Seeks time and cost efficiency by automating repetitive operations
in large volumes.

3. Objectives of TPS
• Process data generated by and about transactions.
• Maintain a high degree of accuracy.
• Ensure data information integrity and accuracy.
• Produce timely documents and reports.
• Increase labour efficiency.
• Help provide increased and enhanced efficiency.
• To build and maintain customer loyalty.

4. Components of a Transaction System
• The User of the information system is the person belonging
to the organization that owns the transaction system.
• Participants are the people who conduct the information
processing.
• People from the environment become participants of the
system as they directly enter transactions and perform
validation.

5. Types of TPS
1. Batch processing systems :
• Batch processing is where the information is collected and
stored as a batch but not processed immediately.
• Batch processing is useful for enterprises that need to process
large amounts of data using limited resources.
• Example: Payment by cheque, Credit card transactions, etc.

6. 2. On-line transaction processing (OLTP) :
• A system whereby each transaction is processed
immediately,
without the delay of accumulating transactions into a batch.
• Examples :
 Mostly in Online shopping
Uses PCI cards (Payment Card Industry): PayPal or World Pay, We
Pay, e-Way, ICEPAY, ATM’s.

7. Batch and On-line Transaction Processing
System

8. 3. On-Line Entry with Delayed Processing
• This type of transaction is a compromise between the batch
and on-line processing.
• Orders or transactions are entered into the computer system
when they occur, but they are not processed immediately.
• Example: A typical mail order system in which orders are
accumulated and then it is forwarded to a warehouse for
shipment

9. Transaction Processing Cycle
Business data goes through a transaction processing cycle that
includes:
• Data Collection
• Data Editing
• Data Correction
• Data Manipulation
• Data Storage
• Document Production

10. • Data Collection
– The process of capturing and gathering all data necessary to
complete transactions is called data collection.
– It can be manual such as completing a purchase order by hand. It can
also be automated via special input device such as scanners and
terminals.
• Data Editing
– An important step in processing data is to check for validity and
completeness of data. Controls must be placed in the data-entry form.
– For example, quantity and cost must be numeric and names must be
alphabetic.

11. • Data Correction
– A data that is not entered properly needs to be entered correctly.
– Data correction involves reentering incorrect data in the data entry
point.
– For example, a UPC code not found in the retail store checkout, is
given a special code to complete the transaction for an item.
• Data Manipulation
– The process of performing calculations and other data
transformations is termed data manipulation.
– Examples are, sorting data, summarizing data, finding price of five
items, calculating employee weekly pay, and so on.

12. • Data Storage
– Involves updating one or more database tables or files with new
transactions.
– For example, inserting new customer information, updating customer
demographics, updating inventory transactions, creating new student
registration, and so on.
• Document Production
– TPSs produce important business documents such as sales receipts,
order entry list, customer list, invoices, purchase orders, inventory on-
hand report, paychecks, and so on.
– Documents can be hard copy paper report or displayed on computer
screen.

13. Traditional Transaction Processing
Systems
• Traditional transaction processing systems include
– order processing,
– purchasing, and
– accounting

14. • Order Processing Systems : Order processing systems
include order entry, sales configuration, shipment
planning, shipment execution, inventory control,
invoicing, customer interaction, and routing and
scheduling.
• Purchasing System : The purchasing transaction
processing system is used when an item (such as a chair
or software) is ordered to a supplier from a company. It
includes inventory control, purchase order processing,
receiving, and accounts payable.
• Accounting Systems : An accounting system includes
budget, accounts receivable, payroll, asset management,
general ledger

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