Information Technology Essay Homework
Running Head: Essay 2
Transaction Processing System
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School
Introduction
Transaction information system is a system that is used to cater and to recode all transactions that carried out in a business day to day operations. Think about a moment of different operations that carried out in business. For example, in an electronics appliance house where multiple products are available that ranges from small one to huge one. In a day multiple transactions carried out in this business. Customers are coming in the store they are demanding for products. They select the product, pay for it and leave the shop. In this way, new products from the store are places on the shelf of the store. To maintain the inventory of the store products are also ordered from the companies as well (George A. Holt, 1975).
To maintain the record of all the products that are present in warehouse, shop and those that are sold out. All these records are maintained under the transaction information system. All the events are known as transactions and keeping the record of all these transactions in a system is called processing system. Hence, we can say that transaction process system is a system that is used to process all the transactions along with the details that are obligatory to maintain the data related to fundamental operations of the company.
A transaction is known as a single event due which changes occur. There are different types of transactions, that is, receipts, invoices, customer order, payments, receivables and many more. Under the actual processing of a transaction, some important foams of transactions are included that is editing, collection, manipulation, and storage of data (STERN, 1990). These transactions are helpful in analyzing the position of the company regarding revenues, investment, payments, and collection. It also reflects the new condition and last processed transaction as well.
Characteristics of the Users of the System
There are multiple users of this transaction processing system. It is used in every level in the organization related to the level the access to this system is different. For example, when it is used by the lower level employees and supervisors, they only input the data in this system that is related to stock, inventory, finance and payable. The middle manager used this system to check the transactions that are made by lower manager whether they did it correctly or not (Al-tarawneh, 2015). Furthermore, the upper managers used it as a tool for taking a decision where the last month’s transactions help in the understanding of how the business going what are the inflows and outflows in a prescribed period.
The above mentioned process of whole transaction system is divided into three types that is users, participants and people from the environment in which this system is implemented. To users can be defined as those people who are direct users of this system and who record day to day transactions. They provide the data that must be entered into the system but do not directly add any information in this system (Al-tarawneh, 2015). Furthermore, participants are considered as the direct users of this system. They are one who enters the data this is obtained from the user.
In the participants, data entry operators, customer service operators, people who are working at the checkouts, and all those who are involved in carrying out the tasks that are essential in all process of data processing. Moreover, people are one who is not directly involved in the usage of data, but sometimes they avail the services of transaction processing system and validate the data of customers, for example, withdrawing of money from ATM.
There are other important characteristics of transaction processing system that makes this system important for business. This system worked on the principle of rapid response rate. The response time of this system is less than 30 seconds (Al-tarawneh, 2015). Any transaction that is recorded in this system is rapid, and the input is easily converted into output. From a customer, it worked fast the customers do not have to wait for a minute while the transaction is processing. Hence, we can say that it is a fast performer with a rapid response rate.
The reliability of this system makes this system the first preference of the business. There thousands of business that heavily depend on this system. This system can record as mush transactions that any transaction information system lacks. Therefore, the reliability of this software makes this favorite for use in business. Furthermore, the recovery and backup procedures make this system accurate and quick.
The inflexibility of this system makes this system fit for business. This TPS records the same transactions many times regardless of the time and user. If it allows flexible transaction than there are multiple opportunities that operate this system at nonstandard operations. The controlled processing feature of this system supports different business operations.
Features and Usage of the System
There are a lot of prominent features of this system that makes it desirable among other software of this type. Its feature of fast processing makes it desirable among others. The speed of transaction is essential to the success of any system. The speed to which this system reports to transactions will pave the path of success for the organization. This system is designed in a way that will instantly process the transaction when it is entered in it. Since the invention of transaction processing system, it is considered as a strong business tool. It can be restricted according to its use (George A. Holt, 1975). Those employees can gain access to this system if their work is related to it. The limited access of this system ensures the smooth working that those employees who are capable enough to access this system cannot use this system. The controlled feature of this system provides security to business transactions.
Real-time processing is the most important feature of this system that synchronized all the business operations. In today’s, competitive world the real-time processing is essential so that real picture can be apparent to the operations managers. So that, timely decision making help the managers in saving the company and enhance the graph of success as well. Batch processing is another feature for those organizations who want to process large transactions with use of limited resources. The feature of batch processing is not applied in all organization. Owing to the business operations. This feature is applied. Batch processing is used in saving the IT resources from analyzing each transaction separately. For example, the transactions of master cards are analyzed one time for the customer when the bill is generated. So instead of the process every transaction separately by using batch processing feature all the transactions are processed at a time. It also serves as a management information system that can be used at different functional levels to analyze the current operations of the company.
Impact of the System
There is both positive and negative impact of this system on business and individuals as well. The positive impact of this system includes, it reduces the lead time in the processing of transactions, also reduce the order cycle times. Due to the implementation of this system, the personnel order processing cost is reduced that save much of the cost of the company. It increases the productivity and customer satisfaction. Due to less time that is utilized in transaction processing help in retaining the customers and increase their interest in the company as well. It provides a single integrated system in one place, and only one software is enough to cater all the needs of the company (Team, 2018). It is also capable of producing customized reports. It is inexpensive cloud computing as compared to other software. The most important point that makes it prominent in front of other is its error-free data. The chances of error are less although the time of processing transaction is less.
The negative impact of this system is that high setup cost is required that is a combination of both hardware and software. For the implementation and development of this software, no standard formats are present. There is high incompatibility of hardware and software in this process system. These systems are often overloaded with information that creates difficulty for the managers to get the required data that will further use in decision analysis. For the smooth implementation and proper functioning of this system, proper training is required (Al-tarawneh, 2015). Unless and until the employees are trained they are not able to properly handle this system.
According to the cost-benefit analysis of this transaction processing system, there is the high cost associated with it that is system development, system installation, system procurement, training, software and hardware purchase, recurring operations, hardware leasing and system maintenance (George A. Holt, 1975). While at the side of benefits, it’s a one cost that is incurred on it. It automated all the business operations, and increases the productivity and performance of employees and increases the goodwill of the company.
Conclusion:
Summarizing the findings of this paper, in a nutshell, it is pertinent to mention that, transaction processing system is the best system that is used by the companies for analyzing their day to day business transactions. It is the best software available that requires less processing time for each transaction. It has a positive impact on the productivity of the company. It is responsive and provides an opportunity for companies to convert their manual procedures into automation.
References Al-tarawneh, W. A. (2015). THE IMPACT OF TRANSACTION PROCESSING SYSTEMS IN MAKING OPERATIONAL DECISIONS: A CASE STUDY OF COMPUTERIZING THE EMPLOYEES AFFAIRS DEPARTMENT OF AL-BALQA APPLIED UNIVERSITY, AL-KARAK. European Scientific Journal, 1-100. George A. Holt, H. C. (1975). Cost-benefit evaluation of interactive transaction processing systems. AFIPS National Computer Conference, 1- 20. STERN, G. A. (1990). Cost-benefit evaluation of interactive transaction processing systems . Technology Management Incorporated Washington, D.C. , 688-699. Team, O. (2018, 02 12). Advantages And Disadvantages of Online Transaction Processing Systems. Retrieved from onlinecmag.com: http://www.onlinecmag.com/advantages-disadvantages-online-transaction-processing-systems/