Transaction processing

systems

By Julian A. Carpo

by Julian Carpo
Characteristics of transaction
processing systems
 Batch transaction processing
 Real-time transaction processing
 Data validation
 Historical significance of transaction
processing systems
 Manual transaction systems

by Julian Carpo
Characteristics of transaction
processing systems
 Transaction: event generating or modifying stored data
in an info sys.
 Batch transaction processing collects transaction data
as a group/batch
 processed later (time delay)
 Real-time transaction processing: immediate data
processing
 Data Validation: used to check entry of transaction data
 Historical significance of transaction processing
systems: UNIVAC
 Manual transaction systems: business systems that
operate without the use of machines.

by Julian Carpo
TPS Characteristics
 They collect, store, modify and
retrieve the transaction of an
organisation.
 Directly support business operations
 Must be designed in conjunction w/
the organisation’s procedures.
 Main information processes:
collecting and storage.

by Julian Carpo
4 important characteristics
 Rapid response (fast performance, rapid
response time)
 Reliability (low failure rate, quick and
accurate recovery, backup and recovery
procedures)
 Inflexibility (every transaction processed in
same way regardless of conditions)
 Controlled processing (supports an
organisation’s operations)

by Julian Carpo
Examples of batch transaction
processing
 Clearance of cheques
 Other forms of paper output

by Julian Carpo
Large batch
 Mainframe PC and magnetic tape
 Payroll or stock info
 Employee: hours worked, overtime
earned
 Payroll master file updated
 Pay slips created (ALL employees)
 Often run at night – less demand for
info sys
by Julian Carpo
3 disadvantages in batch
processing
 Processing schedule predetermined
 Errors unable to be corrected during
processing
 Sorting transaction data – expensive
and time consuming

by Julian Carpo
2 concerns w/ real-time transaction
processing
 Concurrency: data cannot be changed
by 2 users at same time
 Atomicity: steps completed
succesfully as a group. If any step
fails, no other step should be
completed.

by Julian Carpo
Transaction processing monitor
 Software (middleware) allowing
running of TP programs.
 Manages sequence of events
 Provides interface between input
devices and DBMS
 Provides data security, ensuring
transactions don’t get lost/corrupted.

by Julian Carpo
Differences btween real-time and
batch
 Real time: each transaction is unique; transactions are
stand-alone; requires master file to be available more
often for updating; fewer errors – transaction data is
validated and entered immediately; infrequent errors
may occur – but often tolerated; not practical to shut
down whole system (infrequent errors); more computer
operators are required in real-time processing –
operations not centralised.
 Batch: each transaction part of a group; database not
accesible all of the time; more errors; data is organised
and stored before master file is updated – errors can
occur during these steps; easier to maintain than real-
time.

by Julian Carpo
Data validation
 Used to check the entry of transaction
data.
 Procedures ensure transactions are
correct and have been accurately
stored in the database.
 Involves transaction initiation and
field checking.

by Julian Carpo
Historical significance and manual
transaction systems
 Historical significance: UNIVAC 1950’s
 Manual transaction systems: business
systems operating w/o use of
machines.

by Julian Carpo
Components of a transaction
processing system
 Users: take data and use it in another
info system type
 Participants: conduct info processing
 People (from the environment):
directly enter transactions and
perform validation

by Julian Carpo
Examples of real-time transaction
processing
 Reservation systems: set aside
service/product for future use
 Motels
 Point-of-sale (POS) terminals: sells
goods/services
 Library loan systems: keeps track of
items borrowed from library

by Julian Carpo
System flowchart for a POS system
Customer
receipt

Inventory MIS
UPC/quantity database

Server POS system

UPC/quantity
Purchase
UPC Price database Inventory
report

Product
Database

by Julian Carpo
Examples of batch transaction
processing
 Cheque clearance: written order
asking bank to pay money to a
person
 Bill generation: an invoice for
goods/services supplied to a
customer.
 Credit card sales transaction: takes
impression of customer’s card

by Julian Carpo
Databases and files
 Database: collection of data
 Types: hierarchical, network,
relational
 Important features for design: good
data placement, short transactions,
real-time backup, high normalisation,
archiving of historical data and good
hardware configuration

by Julian Carpo
File: block of data
 Master file: info about business
organisation
 Transaction file: collection of transaction
records
 Report file: data formatted for presentation
 Work file: temporary file in the system
used during processing
 Program file: instructions for processing of
data

by Julian Carpo
Data warehousing
 Data warehouse: collects info from
different data sources
 Consolidated, subject-oriented,
historical and read-only

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Backup procedures
 Backup: another copy of data
 Recovery processes include backup,
journal, checkpoint and recovery
manager

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2 types of recovery
 Backward recovery: back out or undo
unwanted changes
 Forward recovery: redo changes

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Recovery processes continued
 Magnetic tape: stores large data
quantities inexpensively. Uses
sequential access
 Grandfather-father-son: backup
procedure refers to at least 3
generations of backup master files
 Partial backups: parts of master file
backed up

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Updating in a batch
 Originally feasible: details were stored on
punch cards or magnetic tape
 2 stages – collecting and processing of
transaction data into file & updating master
file
 Sequential access: data accessed in a
sequence. Time consuming.
 Information technology: magnetic tape

by Julian Carpo
Updating in real time
 Direct/random access: data is accessed
without accessing previous data items.
Stores data based on an algorithm, which
calculates data location. When index used,
called indexed access.
 Information technology: magnetic disk
 Software – online and user-friendly
 Rapid response time – few seconds or less

by Julian Carpo
Other information processes
 Collecting: generating transaction
data
 Analysing data: meet user’s
information needs. Output from TPS
is input to other systems

by Julian Carpo
Hardware
 MICR (Magnetic ink character
recognition): used by banks to read
account numbers on cheques
 ATM (Automatic teller machine):
banking terminal performing deposits
and withdrawals
 Barcode readers: used in retail to
collect product information

by Julian Carpo
Forms
 Document used to collect data from a
person
 Examples include sign-on sheet for
payroll.
 On-screen forms: populates fields in a
database
 Web forms: used to purchase items
over the internet

by Julian Carpo
Decision support systems
 Assist people to make decisions by
providing information, models and
analysis tools
 Data mining: used in DSSs to find
relationships and patterns in the data

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Management information systems
 Provides information for the manager
 Different types of reports include
scheduled reports, forecasting
reports, on-demand reports and
exception reports

by Julian Carpo
Key issues in designing an MIS or
DSS

 How a system will be modeled

 How model of system will be handled
by the computer
 What data will be used
 How far into the future trends will be
extrapolated

by Julian Carpo
Issues related to transaction
processing systems
 Nature of work
 Non-computer procedures
 Bias
 Importance of data
 Control in transaction processing

by Julian Carpo
Nature of work
 Automation of jobs: the use of
information technology to perform
tasks once performed by people
 People as participants: resulted in
fewer jobs in banks. People are
purchasing products by completing a
web form.

by Julian Carpo
Non-computer procedures
 Organisations rely on TPS
 Manual backup procedure if system
crashes
 When system up & running, user
needs procedure to enter manual
transactions

by Julian Carpo
Bias
 Data unfairly skewed or gives too
much weight on particular result
 Data gathered can be presented in
biased way using tables and charts
 Becomes ethical issue when relevant
information is misrepresented

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Importance of data
 Data security: involves series of
safeguards to protect data
 Encryption: coding data
 Decryption: changing it back
 Firewalls: used on networks to verify
and authenticate all incoming data

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Importance of data continued
 Accuracy: extent data is free from errors.
Errors caused by mistakes in gathering
data, data entry, mismatch of data and
person, or out-of-date information
 Data validation: checks data entry. Checks
for missing data, too high or too low data
values, data values inconsistent with other
data, data in wrong format.
 Carried out using range checks, list checks,
type checks and check digits (see Chapter
2)
by Julian Carpo
Data integrity
 Describes reliability of data.
 Involves accuracy, currency and
relevance of data

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ACID test
 Atomicity: all steps involved in transaction
completed successfully as a group
 Consistency: transaction successfully
transforms the system and database from
one valid state to another
 Isolation: transaction is processed
concurrently with other transactions. As if
only transaction executing the system
 Durability: all changes transaction makes
to database become permanent

by Julian Carpo
Control in transaction processing
 Starts with collecting, includes
manner TPS manipulates data & way
errors are corrected
 Some people in management
positions are willing to falsify
transactions to promote careers

by Julian Carpo
Aspects of TPS relevant to “A large
retail company”
 Real-time transaction processing
 Manual transaction systems
 Components of a TPS
 Credit card sales transactions
 Database and files
 Updating in a batch, real-time
 Other information processes: collecting
 Nature of work
 Non-computer procedures
 Bias

by Julian Carpo
Real-time transaction processing
 It is important in an organisation such as a “large
retail company” for the immediate processing of data
& instant confirmation of a transaction (specifically
needed in a retail environment where servicing a
number of customers with a limited staff under a
limited amount of time is usual). The 4 important
characteristics of a TPS stresses this. They are rapid
response, reliability, inflexibility and controlled
processing. Also, the concerns of concurrency and
atomicity are important in ensuring data is not
mishandled or any procedures/steps taken are
completed successfully as a group or not executed at
all.

by Julian Carpo
Manual transaction systems
 Manual transaction systems are imperative in the retail environment
because they were the conceptual basis for real-time TPS. They were used
long before the rise in technology allowed for easier data collection and
storage. Obviously, they have been around since trading and business took
its early strides. In smaller stalls who still cannot afford the technology
corporations use, it is necessary to use manual transaction systems to
record business activities. Manual transaction systems are based on a clear
set of rules followed by a person. They make it easier to transmit the data
into a format suitable for recording onto an information technology e.g. a
computer. Of course, computerisation of a manual T.S. brings benefits,
when used by a large retail organisation. It increases the rate at which
products are sold, which means more profit for the retail chain. The less
time taken for a customer to purchase a product is invaluable in customer
satisfaction, as there are lesser queues – therefore lesser time spent on
waiting. Also manual T.S.s provides the retail chain with information in what
products are on demand. The retail chain capitalises on this information on
consumer habits and they can tailor their products to attract more
customers, thereby meaning more profit.

by Julian Carpo
Components of a TPS
 People are obviously important in an operation of a TPS.
They are usually classified as users, participants and people
in the environment. This classification allows for easier role
recognition within the retail chain organisation. Users do not
interact w/ the TPS but use the data provided. They provide
information about the system that is useful to the large
retail chain. The participants are the shop workers which do
the actual work conducted in a retail chain store. They enter
the data into the TPSs. And the peole from the environment
are the consumers, or people who buy goods from the shop
front. They become participants when they use EFTPOS
terminals located within the retail store to purchase goods
and ATMS within or outside of it. They become participants
in the sense that they directly enter transactions and
perform validations.

by Julian Carpo
Examples of real-time transaction
processing
 Reservation systems basically involve
setting aside a product or service for future
purchase or use. They are common in the
retail industry. Lay-by is a good example.
This involves the delaying of a valued item
for future purchase. A minor monetary
deposit, usually a small percentage of the
overall purchase price of the product is
then used to secure the customer the right
to purchase this product at a later time.

by Julian Carpo
Examples of real-time transaction
processing continued
 POS terminals are used by retail stores to
sell goods and services. In large retail
organisations, POS terminals send
inventory data to a central computer (sale
made). We as users become participants
when we use these machines to purchase
items from the store. The data is converted
for easier transmission. Relevant
information and the price are displayed
using barcode readers.

by Julian Carpo
Examples of real-time transaction
processing continued
 Credit card sales transactions can be
done over the internet, at POS
terminals or taking an impression of
customer’s credit card. Both the POS
system and the multi-page credit slip
system rely on batch processing. We
use them as an alternative to money,
to pay for retail store purchases.

by Julian Carpo
Databases and files
 In any large retail chain/organisation,
the information processes often vary.
In the handling of data, the storage
and retrieval of data must be spot on.
Retail chains rely on this trait for the
success of their business.

by Julian Carpo
Databases and files
 Good data placement:
Database is designed to efficiently
gain access to frequently used data &
data patterns
 Short transactions: transactions can
be processed fast
 Real-time backup: saving data during
low usage or idle time

by Julian Carpo
Databases and files continued
 High normalisation: data redundancy is
minimised to increase update speed. Also
improves backup speed.
 Archiving of historical data: old data stored
in chronological order in separate
databases.
 Good hardware configuration: the setup
must be able to handle a number of users
and provide rapid response

by Julian Carpo
Files
 Master file: info about a retail chain’s
business. This is where the data is stored
 Transaction file: audit trails and history for
the retail chain
 Report file: formatted user presentable
data
 Work file: temporary file
 Program file: data processing instructions.

by Julian Carpo
Backup procedures
 Backups provide safety nets for data
restoration in case of a system
crash/malfunction. Without these, the
retail chain will cease to make profits
as a result of data loss. They are
usually stored in a safe location.

by Julian Carpo
Recovery process
 When a TPS fails, data must be recovered
immediately for restoration.
 Journal: keeps track of company records on
a physical medium.
 Checkpoint: are like signposts. Indicate
where, when, what data was saved in a
daily period. Syncs files and journals
together for smoother transaction
reviewing

by Julian Carpo
Recovery process
 Backward recovery: undo database
changes
 Forward recovery: redo database
changes
 Recovery manager: restores database
to a previous condition

by Julian Carpo
Magnetic tape
 Often used. Inexpensive. Appropriate
for storing large amounts of data. An
alternative to hard disk drives.
 Data is read from the beginning until
the end.
 Suitable for most transaction backups

by Julian Carpo
Grandfather-father-son
 3 generations backup procedure. Son
is the most recent, whilst father and
grandfather are the oldest.
Commonly used in conjunction w/
magnetic tape. Ensures data cannot
be lost. A large retail chain should
have more than 3 generations.

by Julian Carpo
Other information processes
 Collecting: entering the transaction
data. The users who become
participants by using EFTPOS or ATM
are the data source
 MICR readers are used by banks to
read account numbers on cheques
 ATM: allows deposits and withdrawals
for customers

by Julian Carpo
Other information processes
continued
 Barcode readers collect product information. They
scan the barcode on the product , the details kept in a
central computer. Data about the item is quickly
collected.
 Forms: documents to collect data from customers. We
use this to create memberships, gain customer details
and update information. There are paper forms, such
as sign on sheets; on-screen forms for computerised
population of fields in a database; web forms used by
consumers to buy items over the internet.

by Julian Carpo
Planning the new solution
 A large retail company needs a project plan to effectively
organise the components of this project. We need a schedule
for both the project and subprojects. It is important because it
will help to deliver this new solution within feasible
requirements and will minimise the effect of unanticipated
problems. We need a project goal, a deliverable and a schedule
to foresee how this implementation will pan out. A large retail
chain cannot afford to compensate for costly mistakes
produced by inorganisation and undelivered goals. This will
cost us in profits and on a greater extent, the functioning of
our business.
 Information management software will help to manage
information and schedule tasks. Appointments and meeting
within co-workers and the organisation can be viewed
electronically.
 Gannt charts will be used, as they provide users a quick
method of determining whether the project is on schedule.

by Julian Carpo
Designing the new solution
 A top-down approach is best to designing this new solution,
as problems that may be encountered along the way can be
divided into smaller segments to make solving the problem
easier.
 We will ensist advice and support for programming this new
solution from the information systems personell. We will
then adapt a uniform structure for the real-time systems
that will be used in the retail stores - based on a popular
application - to suit our needs. Reliability is crucial, as this
new solution will handle numerous transactions for the
working/non-working weeks. Over time, we will train our
applicants/employees/participants in handling this new
solution. As such, the UMDIT stages in the development
cycle will be used.

by Julian Carpo
Designing the new solution
continued
 Context diagrams provide an easy way to visualise
information. Consulting this design tool will help in
simplifying the development of the new system, as it clearly
shows the flow of data in the system.
 A DFD will be used to provide more detail into what the
participants can do in regards to this new solution. It has
greater detail than the context diagram.
 Decision trees are very important in this retail context.
Almost anyone can immediately identify what will transpire
with this solution, what needs to be done in order to
accomplish the goals, etc. it represents all possible
decisions and the outcomes of those decisions.
 A Data dictionary provides a comprehensive list of the data.

by Julian Carpo
Implementing the new solution
 Participant training, as outlined before, will come in handy
in ensuring that our employees and workers can use the
system and understand its benefits. Training manuals will
be accessible. Technical support in troubleshooting
problems will be gained online through an always-on
internet connection.
 Pilot conversion ensures that all our retail chain stores
across Australia will have the latest technology available to
them concurrently. This also ensures that the system can
be trialled in different regions e.g. rural as opposed to
urban. If successful, the new solution is guaranteed to be
functioning within acceptable standards and will be
implemented throughout the larger centres.
 Of course, testing the new system ensures that it works.
Diagnostic software and general operation are examples of
testing. The reliability of the backup system is integral in
the new system’s success.

by Julian Carpo
Bibliography

 Heinemann HSC Information

Processes and Technology - G.K.
Powers

by Julian Carpo