Describe the characteristics of transaction processing systems and the role they play in business [15]

A transaction process system refers to an information processing system for business transactions that involves the collection, modification and retrieval of all transaction data of an organization .It can also referred to as an event that generates or modifies data that is eventually stored in an information system.
A transaction process system also monitors transaction programs, a special kind of programmes, manages data that must be left in a consistent state for example if an electronic payment is made, the amount must be either both withdrawn from one account and added to the other, or none at all. In case of a failure preventing transaction completion, the partially executed transaction must be rolled back by the transaction process system.

Characteristics of transaction process systems
Rapid Response
It has fast performance with a rapid response time is critical. Businesses cannot afford to have customers waiting for a TPS to respond, the turnaround time from the input of the transaction to the production for the output must be a few seconds or less.
Reliability
Many organisations rely heavily on their TPS; a breakdown will disrupt operations or even stop the business. For a TPS to be effective its failure rate must be very low. If a TPS does fail, then quick and accurate recovery must be possible. This makes well–designed backup and recovery procedures essential.
Inflexibility
A TPS wants every transaction to be processed in the same way regardless of the user, the customer or the time for day. If a TPS were flexible, there would be too many opportunities for non-standard operations, for example, a commercial airline needs to consistently accept airline reservations from a range of travel agents, accepting different transactions data from different travel agents would be a problem.
Controlled processing
The processing in a TPS must support an organisation's operations. For example if an organisation allocates roles and responsibilities to particular employees, then the TPS should enforce and maintain this requirement.

Storing and Retrieving Storing and retrieving information from a TPS must be efficient and effective. The data are stored in warehouses or other databases, the system must be well designed for its backup and recovery procedures.
Databases and files
The storage and retrieval of data must be accurate as it is used many times throughout the day. A database is a collection of data neatly organized, which stores the accounting and operational records in the database.

* Good Data Placement: The database should be designed to access patterns of data from many simultaneous users. * Short transactions: Short transactions enables quick processing. This avoids concurrency and paces the systems. * Real-time backup: Backup should be scheduled between low times of activity to prevent lag of the server. * High normalisation: This lowers redundant information to increase the speed and improve concurrency, this also improves backups. * Archiving of historical data: Uncommonly used data are moved into other databases or backed up tables. This keeps tables small and also improves backup times. * Good hardware configuration: Hardware must be able to handle many users and provide quick response times.
In a TPS, there are 5 different types of files, the TPS uses the files to store and organise its transaction data: * Master file: Contains information about an organisation’s business situation. Most transactions and databases are stored in the master file. * Transaction file: It is the collection of transaction records. It helps to update the master file and also serves as audit trails and transaction history. * Report file: Contains data that has been formatted for presentation to a user. * Work file: temporary files in the system used during the processing. * Program file: Contains the instructions for the processing of data.

Roles played by transaction processing system in business
Process data generated by and about transactions
This can be directly or indirectly related to selling products and services to customers. Processing orders, purchasing materials, controlling inventory, billing customers and paying suppliers are all business activities that result from customer orders. These activities produce transaction data that are stored and processed by TPS.
Maintain a high degree of accuracy and integrity
One objective of any TPS is error-free data input and processing. Even before the utilisation of computer technology, humans were responsible of inspecting all the documents and reports introduced by or into company business process. Because humans are fallible, the transactions were often inaccurate, resulting in wasted time and effort or in worst case lost profits and customers. As the volume of data being processed and stored increases, it becomes more difficult for individuals to review all input data. For example, E-Commerce companies face this problem when accepting credit card information over the Internet. How can these companies make sure that people making purchase are entering valid credit card numbers? One approach is to automate the process and let TPS do the real-time validity check at time the purchase is being made. Check may consist of contacting the bank or at least applying a credit card number check algorithm.
Produce timely documents and reports
Manual transaction processing can take days to produce routine reports. Fortunately, the use of computerised TPS significantly reduces this response time. The ability to conduct business transactions in timely way can be very important for the profitable operation of organisation. For instance, if bills are sent to customers few days earlier than usual, payments may be received earlier. Because of electronic recording and transmission of sales information, transactions can be processed in seconds rather than overnight thus improving companies’ cash flow.
Increase labour efficiency
Today, transaction processing systems can substantially reduce clerical and other labour requirements. The TPS replaces the room full of clerks, typewriters, and filing cabinets.
Help provide increased service
Without question, we are becoming service-oriented economy. Even strong manufacturing companies, including hose hold appliance makers and automobile manufactures, realise the importance of providing superior customer service. A transaction processing system for concert tickets, for example, allows concert enthusiasts to order tickets over Internet instead of standing in line for hours.
Help build and maintain customer loyalty
A firm’s transaction processing systems are often means for customers to communicate. It is important that the customer interaction whit TPS keeps customers satisfied and returning.
Achieve competitive advantage
A goal common to almost all organisations is to gain and maintain a competitive advantage. Depending on the nature and specific goals of the business, TPS can help provide some or all of the following: customer loyalty increased, superior service provided to a customer, better relationship with suppliers, superior information gathering, costs dramatically reduced. Other Functions
Top of Form
Site Search

Bottom of Form * * Services
Print
System runtime functions
Transaction processing systems provide an execution environment that ensures the integrity, availability, and security of data. It also ensures fast response time and high transaction throughput.
System administration functions
Transaction processing systems provide administrative support that lets users configure, monitor, and manage their transaction systems.
Application development functions
Transaction processing systems provide functions for use in custom business applications, including functions to access data, to perform intercomputer communications, and to design and manage the user interface.
The services of a transaction processing system runtime environment include the following: * Scheduling and load balancing. Controlling the rate and order in which tasks are processed to give higher-priority tasks the best response times and to adapt to the availability of application servers and other system resources. * Managing system resources. Maintaining a pool of operating system resources to be used for transaction processing, loading application programs, and acquiring and releasing storage. * Monitoring. Monitoring the progress of tasks, suspending those waiting for input, adjusting task priorities, and resolving problems. * Managing data. Obtaining required data needed by tasks, coordinating resource managers (such as file servers and database managers), locking data for update, and logging changes. * Managing communications. Monitoring communications with users and between servers and other systems, starting communications sessions as needed, managing data handling and conversion, and routing data to the right destination. * Time management. Managing transaction processing in relation to the passage of time, starting tasks at predefined times, logging the date and time of events onto disk, and regularly controlling part of the business system to provide degrees of automation.
Services for systems administration and application development are: * Perform work that one or more clients have requested. For example, a user application that is running on one machine (the client machine) requests work to be done on another machine (the server machine). Typically, the region or application server accesses some data, applies some business logic to it, then replies to the client. Such service is provided by running one or more programs on behalf of a transaction. * Coordinate all the facilities that its application servers need. For example, they coordinate the security of the application servers, obtain data and storage that they need, and log their transactions. * Subcontract many services to other servers that can do the work better and provide extra services that are needed for integrated transaction processing. For example, they can use Structured File Server files databases to store and manage user data. They also provide services to locate and interface with the resource managers, record ongoing changes to data, and coordinate the update of data across multiple resource managers.