Transaction processing systems 1

Characteristics of transaction processing systems  Batch transaction processing  Real-time transaction processing  Data validation  Historical significance of transaction processing systems  Manual transaction systems 2

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. 3

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. 4

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) 5

Examples of batch transaction processing  Clearance of cheques  Other forms of paper output 6

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 7

3 disadvantages in batch processing  Processing schedule predetermined  Errors unable to be corrected during processing  Sorting transaction data – expensive and time consuming 8

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. 9

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. 10

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. 11

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. 12

Historical significance and manual transaction systems  Historical significance: UNIVAC 1950’s  Manual transaction systems: business systems operating w/o use of machines. 13

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 14

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 15

System flowchart for a POS system Server POS system Customer receipt Product Database UPCPrice UPC/quantity Inventory database Purchase database MIS Inventory report 16

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 17

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 18

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 19

Data warehousing  Data warehouse: collects info from different data sources  Consolidated, subject-oriented, historical and read-only 20

Backup procedures  Backup: another copy of data  Recovery processes include backup, journal, checkpoint and recovery manager 21

2 types of recovery  Backward recovery: back out or undo unwanted changes  Forward recovery: redo changes 22

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 23

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 24

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 25

Other information processes  Collecting: generating transaction data  Analysing data: meet user’s information needs. Output from TPS is input to other systems 26

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 27

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 28

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 29

Management information systems  Provides information for the manager  Different types of reports include scheduled reports, forecasting reports, on-demand reports and exception reports 30

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 31

Issues related to transaction processing systems  Nature of work  Non-computer procedures  Bias  Importance of data  Control in transaction processing 32

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. 33

Non-computer procedures  Organisations rely on TPS  Manual backup procedure if system crashes  When system up & running, user needs procedure to enter manual transactions 34

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 35

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 36

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) 37

Data integrity  Describes reliability of data.  Involves accuracy, currency and relevance of data 38

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 39

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 40

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 41

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. 42

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. 43

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. 44

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. 45

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. 46

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. 47

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. 48

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 49

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 50

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. 51

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. 52

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 53

Recovery process  Backward recovery: undo database changes  Forward recovery: redo database changes  Recovery manager: restores database to a previous condition 54

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 55