What are the characteristics of transaction processing system?

The system of breaking down transactions using a simpler and more unified method is called Transaction Processing.

A Transaction Processing System or TPS is software that keeps track of transactions by processing the data in an online recording system.

In this article

Batch processing is when clusters of transactions are refined simultaneously using a computer system. This method, although designed to be efficient for breaking down bulky series of programs, has a drawback
as there is a delay in the transaction result.
Real-time processing carries out its transactions exclusively; this method ensures a swift reply on the condition of the transaction result. It is an ideal technique for dealing with singular transactions.

The processing of a group of transactions uniquely differentiates the batch processing from the real-time processing that only runs exclusive transactions.
Batch processing is functional for computing complex data transactions. This is extremely valuable for reducing costs for large organizations that deal with high data traffic. All of this is very different from real-time processing that is efficient in less complex situations.
The real-time processing offers timely results on each processed transaction that makes it more applicable for smaller enterprises, unlike the batch processing that is time-consuming.
In batch processing, user interaction is not required as soon as the transaction begins, however, the real-time processing needs user interface to process each transaction completely.

There are several features involved in a good transaction processing system. A few of these critical features are described below.

The concept behind the use of TPS is to efficiently generate timely results for transactions. Effectiveness is based on the number of transactions they can process at a particular time.
The transaction processing system should be a very stable and reliable system that must not crash easily. Disruption of TPS in an organization can lead to work disturbance and financial loss.
The TPS must maintain the same method for all transactions processed, the system must be designed to effectively protect data and overcome any hardware/ software issues.
The TPS should be user-friendly in order to encourage the use and also decrease errors from inputting data. It should be structured in such a way that it makes it easy to understand as well as guarding users against making errors during data-entry.
The TPS hardware and software components should be able to be upgraded individually without requiring a complete overhaul.
Only authorized personnel, staff members, or employees should be able to access the system at a time.

How does a Transaction Processing System Work?

Processing batch transactions(1) requires data collection and batch grouping. Data collected are stored in the form of batches and may be processed anytime. This long-established technique was used widely in the absence of infotech.
Recent technology innovations gave rise to real-time processing(2). RTP ensures instant data processing with the aim of providing a quick verification of the transaction. It is highly versatile as it can work effectively as a multi-user interface and can also be accessed anywhere there is an online network.

Video on Benefits of Transaction Processing System:

Also read: Pros and Cons of Transaction Processing System

Components of Transaction Processing System

Below are some of the components involved in a TPS:

Inputs: These are source documents gotten from transactions which serve as inputs into the computer’s accounting system examples are invoices, and customer orders.
Processing: This requires the breaking down of information provided by the inputs.
Storage: This is saved information in TPS memory, it may be in the form of ledgers.
Output: Any generated record may serve as the output

Examples of Transaction Processing System

TPS accumulates data about transactions and also initiates processing that transforms stored data. Examples include order processing, employee records, and hotel reservation systems.
Batch transaction process examples include bill generation and check clearances.
Examples of real-time transaction processes are the point of sale terminals (P.O.S) and microfinance loan systems.

Who Uses Transaction Processing Systems?

Users of the transaction processing system are mainly informal users. Although authorized personnel may also need to access data stored by the TPS.

What are the Limitations of Transaction Processing Systems?

Managing operations with the TPS can be complicated if the company is not big enough to efficiently use the transaction processing system.
TPS needs both hardware and software components to efficiently manage high data volume. This capacity makes TPSs susceptible to software security breaches in the form of the virus and faulty hardware issues such as power outage can disrupt the whole system.
Effective integration of a TPS in a company operation requires skilled personnel, it also requires a link with associate company branches to maintain a secure flow of information. This high requirement can create instability and flux in the company’s daily operations.

Functions of Transaction Processing System

Transaction Processing Systems can execute input, output, storage, and processing functions.

Input functions: This includes the securing of data on the source document, entering of input data in the system and also validate data.
Output functions: This includes the production of the report of the transaction via monitor or paper, examples are exception reports, detail reports, and summary reports.
Storage functions: This is the process by which data is stored. It entails the storage of information, accessing, sorting, and updating stored data.
Processing functions: This entails the transformation of data, it includes calculation, computation, and apt result.

Databases for Transaction Processing Systems

Some types of database systems for transaction processing include the following:

It comprises a network of nodes and branches. This structure arranges data in a top-down system, where a higher level node branches out to lower-level nodes.
It arranges data as a chain of nodes linked via branches. Higher-level nodes can have as many branches as possible, lower-level nodes can also be connected to more than one higher-level node.
This involves the use of related tables to present and combine data effectively.

Backup Procedures (Storing and Retrieving Data)

Backup procedures are required by organizations to counter breakdowns and reduce data loss. A copy of data used to restore the system in case of system failure is known as a backup. Data can be stored in magnetic tapes, partial backups or updated in real-time.

The success of a backup relies on the implementation of appropriate procedures. The success of a backup depends on a resourceful recovery process.

Types of Recovery

Backup Recovery: this can be used to reverse required changes to a record.
Forward Recovery: this can be used to save transactions made between the last backup and the up to date time.it works by backing up a copy of the database and it is more proficient because it does not need to save each transaction.

Conclusion

A Transaction Processing System (TPS) is an infotech used to accumulate, store, modify and retrieve data transactions. Transaction processing systems present a unique response to user requirements, although planning to choose the most appropriate method relies heavily on the quantity of data and the type of business.

Other Useful Resources:

6 Best Mobile POS Systems You Need to Know

Computing system for indivisible operations

Transaction processing is a way of computing that divides work into individual, indivisible operations, called transactions.[1] A transaction processing system (TPS) is a software system, or software/hardware combination, that supports transaction processing.

History

The first transaction processing system was SABRE, made by IBM for American Airlines, which became operational in 1964.[2] Designed to process up to 83,000 transactions a day, the system ran on two IBM 7090 computers. SABRE was migrated to IBM System/360 computers in 1972, and became an IBM product first as Airline control Program (ACP) and later as Transaction Processing Facility (TPF). In addition to airlines TPF is used by large banks, credit card companies, and hotel chains.

The Hewlett-Packard NonStop system (formerly Tandem NonStop) was a hardware and software system designed for Online Transaction Processing (OLTP) introduced in 1976. The systems were designed for transaction processing and provided an extreme level of availability and data integrity.

List of transaction processing systems

IBM Transaction Processing Facility (TPF) – 1960. At Amity Unlike most other transaction processing systems TPF is a dedicated operating system for transaction processing on IBM System z mainframes. Originally Airline Control Program (ACP).
IBM Information Management System (IMS) – 1966. A joint hierarchical database and information management system with extensive transaction processing capabilities. Runs on OS/360 and successors.
IBM Customer Information Control System (CICS) – 1969. A transaction manager designed for rapid, high-volume online processing, CICS originally used standard system datasets, but now has a connection to the IBM Db2 relational database system. Runs on OS/360 and successors and DOS/360 and successors, IBM AIX, VM, and OS/2. Non-mainframe versions are called TXSeries.
Tuxedo – 1980s. Transactions for Unix, Extended for Distributed Operations developed by AT&T Corporation, now owned by Oracle Corporation. Tuxedo is a cross-platform TPS.
UNIVAC Transaction Interface Package (TIP) – 1970s. A transaction processing monitor for UNIVAC 1100/2200 series computers.[3]
Burroughs Corporation supported transaction processing capabilities in its MCP operating systems using GEMCOS (Generalized Message Control System of 1976). As of 2012 UNISYS ClearPath Enterprise Servers include Transaction Server, "an extremely flexible, high-performance message and application control system."[4]
Digital Equipment Corporation (DEC) Application Control and Management System (ACMS) – 1985. "Provides an environment for creating and controlling online transaction processing (OLTP) applications on the VMS operating system."[5][6] Runs on VAX/VMS systems.
Digital Equipment Corporation (DEC) Message Control System (MCS-10) for PDP-10 TOPS-10 systems.
Honeywell Multics Transaction Processing. Feature (TP) – 1979.[7]
Transaction Management eXecutive (TMX) was NCR Corporation's proprietary transaction processing system running on NCR Tower 5000-series systems. This system was used mainly by financial institutions in the 1980s and 1990s.
Hewlett-Packard NonStop system – 1976. NonStop is an integrated hardware and software system specifically designed for transaction processing. Originally from Tandem Computers.
Transarc Encina – 1991.[8] Transarc was purchased by IBM in 1994. Encina was discontinued as a product and folded into IBM's TXSeries.[9] Encina support was discontinued in 2006.

Processing types

Transaction processing is distinct from and can be contrasted with other computer processing models, such as batch processing, time-sharing, and real-time processing.[10]

Batch processing

Batch processing is execution of a series of programs (jobs) on a computer without manual intervention. Several transactions, called a batch are collected and processed at the same time. The results of each transaction are not immediately available when the transaction is being entered;[1] there is a time delay.

Real-time processing

"Real time systems attempt to guarantee an appropriate response to a stimulus or request quickly enough to affect the conditions that caused the stimulus."[10] Each transaction in realtime processing is unique; it is not part of a group of transactions.

Transaction processing

A Transaction Processing System (TPS) is a type of information system that collects, stores, modifies and retrieves the data transactions of an enterprise. Transaction processing systems also attempt to provide predictable response times to requests, although this is not as critical as for real-time systems. Rather than allowing the user to run arbitrary programs as time-sharing, transaction processing allows only predefined, structured transactions. Each transaction is usually short duration and the processing activity for each transaction is programmed in advance.

ion processing systems.[10]

Performance

Fast performance with a rapid response time is critical. Transaction processing systems are usually measured by the number of transactions they can process in a given period of time.

Continuous availability

The system must be available during the time period when the users are entering transactions. Many organizations rely heavily on their TPS; a breakdown will disrupt operations or even stop the business.

Data integrity

The system must be able to handle hardware or software problems without corrupting data. Multiple users must be protected from attempting to change the same piece of data at the same time, for example two operators cannot sell the same seat on an airplane.

Ease of use

Often users of transaction processing systems are casual users. The system should be simple for them to understand, protect them from data-entry errors as much as possible, and allow them to easily correct their errors.

Modular growth

The system should be capable of growth at incremental costs, rather than requiring a complete replacement. It should be possible to add, replace, or update hardware and software components without shutting down the system.

Types of transaction processing

Processing in a batch

Transactions may be collected and processed as in batch processing. Transactions will be collected and later updated as a batch when it's convenient or economical to process them. Historically, this was the most common method as the information technology did not exist to allow real-time processing.

Processing in real-time

This is the immediate processing of data. It provides instant confirmation of a transaction. It may involve a large number of users who are simultaneously performing transactions which change data. Because of advances in technology (such as the increase in the speed of data transmission and larger bandwidth), real-time updating is possible.

Databases for transaction processing

A database is an organized collection of data. Databases offer fast retrieval times for non-structured requests as in a typical transaction processing application.

Databases for transaction processing may be constructed using hierarchical, network, or relational structures.

Hierarchical structure: organizes data in a series of levels. Its top-to-bottom-like structure consists of nodes and branches; each child node has branches and is only linked to one higher level parent node.
Network structure: network structures also organizes data using nodes and branches. But, unlike hierarchical, each child node can be linked to multiple, higher parent nodes.
Relational structure: a relational database organizes its data in a series of related tables. This gives flexibility as relationships between the tables are built.

A hierarchical structure.

A network structure.

A relational structure.

The following features are desirable in a database system used in transaction processing systems:

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 normalization: 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.

Backup procedures

A Dataflow Diagram of backup and recovery procedures

Since business organizations have become very dependent on transaction processing, a breakdown may disrupt the business' regular routine and stop its operation for a certain amount of time. In order to prevent data loss and minimize disruptions there have to be well-designed backup and recovery procedures. The recovery process can rebuild the system when it goes down.

Types of back-up procedures

There are two main types of back-up procedures: grandfather-father-son and partial backups:

Grandfather-father-son

This procedure involves taking complete backups of all data at regular intervals – daily, weekly, monthly, or whatever is appropriate. Multiple generations of backup are retained, often three which gives rise to the name. The most recent backup is the son, the previous the father, and the oldest backup is the grandfather. This method is commonly used for a batch transaction processing system with a magnetic tape. If the system fails during a batch run, the master file is recreated by restoring the son backup and then restarting the batch. However, if the son backup fails, is corrupted or destroyed, then the previous generation of backup (the father) is used. Likewise, if that fails, then the generation of backup previous to the father (i.e. the grandfather) is required. Of course the older the generation, the more the data may be out of date. Organize only of records that have changed. For example, a full backup could be performed weekly, and partial backups taken nightly. Recovery using this scheme involves restoring the last full backup and then restoring all partial backups in order to produce an up-to-date database. This process is quicker than taking only complete backups, at the expense of longer recovery time.

Advantages

Batch or real-time processing available.
Reduction in processing time, lead time and order cycle time.
Reduction in inventory, personnel and ordering costs.
Increase in productivity and customer satisfaction.

References

^ IBM Corporation. "CICS Transaction Server for z/OS, Version 3.2 Transaction processing". Retrieved Nov 12, 2012.
^ "The Sabre Story" (PDF). Sabre.{{cite web}}: CS1 maint: url-status (link)
^ "Terminals Help Manage Aluminum Firm's Production". Computerworld. July 26, 1976. Retrieved November 14, 2012.
^ UNISYS Corporation (2012). Transaction Server for ClearPath MCP Configuration Guide (PDF).
^ Digital Equipment Corporation (1989). VAX ACMS Guide to Creating Transaction Processing Applications.
^ Bell, Gordon. "Digital Computing Timeline (1985)". Retrieved November 15, 2012.
^ Van Vleck, Thomas. "Multics Glossary -T-". Retrieved November 15, 2012.
^ Transarc. "Corporate Overview". Archived from the original on February 3, 1999. Retrieved November 16, 2012.
^ IBM Corporation. "TXSeries for Multiplatforms". Retrieved November 16, 2012.
^ a b c Schuster, Stewart A. (June 15, 1981). "In Depth: Relational Data Base Management". Computerworld. Retrieved November 16, 2012.