Transaction Processing System

The Transaction Processing System (TPS) is another important management information system that organizations use to monitor internal operations and examine the external environment of the business. The transaction processing system is the major source of information for other information systems in a business organization; hence it is essential for all business operations and functions (Laudon & Laudon, 2007). It is used by operational managers to answer routine questions and track movements of transactions. The following are the distinguishing features of a transaction processing system:

1. Performance – A typical TPS is characterized by a rapid response time and fast performance. It is measured in terms of the number of transactions processed within a specific period of time.

2. Continuity – the TPS should be continuous during the entire period of a transaction in order to avoid disruptions in the business operations.

3. Simplicity – A good TPS should easy to use because it is usually used by unskilled users. It should be simple to avoid errors of data entry, and allow users to correct any errors easily (Bocij, Greasley & Hickie, 2008).

4. Continuous and ongoing growth – the system should also grow with incremental costs rather than being replaced. It should be flexible to allow replacement, addition and updating of existing software and hardware.

5. Data integrity – the data within the system should not be corrupted. The system should be protected from malicious interference.

Types of Transaction Processing Systems

1. Batch Processing: this system involves the collection and processing of batches rather than single items. Transactions are collected as a batch and updated at convenient times.

2. Real time processing: data is processed immediately to enhance instant confirmation of transactions. Several users may use the system to perform different transactions at the same time.

From the figure above, it is clear that the real-time and batch TPS is used to carry out day-to-day transactions. It also collects, edits, processes and stores data, and generates documents or reports for management decision making (Abramowicz & Mayr, 2007). It generates information necessary for the organization to achieve effective functioning.

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References

Abramowicz, W., & Mayr, H.C. (2007). Technologies for business information systems. Dordrecht: Springer.

Bocij, P., Greasley, A., & Hickie, S. (2008). Business information systems: Technology, development and management for the e-business. Harlow: Financial Times Prentice Hall.

Laudon, K.C., & Laudon, J.P. (2007). Essentials of business information systems. Upper Saddle River, N.J: Pearson/Prentice Hall.

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