Transaction Process System is a type of information system based on computer. A computer based information system refers to the specific application software that is used to store data records in a computer system and automates some of the information processing activities of the organization.

A transaction processing system is a set of information which processes the data transaction in a database monitor that monitors transaction programs. A transaction processing system collects and stores information about transactions and control some aspects of transaction. Transaction is an event of interest to the organization.

Transaction Processing System

A transaction processing system is basic business system. The important features of this system are:

1) It is often tied to other system such as inventory system which tracks stock supplies and triggers recording when stocks get low.

2) It serves the most elementary day to day activities of an organization.

3) It supports the operational level of business and supplies data for higher level management decisions.

4) It usually has high volumes of input and output. It provides data which is summarized into information by systems used by higher levels of management.

Requirements for an efficient working of transaction processing system:

a) For an efficient transaction processing system, fast performance with a rapid response time is critical. Business cannot afford to have customers for a processing system to respond. Hence the turnaround time from the input of the transaction to the production for the output must be a few seconds or less.

b) For a processing system to effective, its failure rate must be very low. Therefore a well designed backup and recovery procedures is essential.

c) A transaction processing system wants every transaction to be processed in the same way regardless of the user, the customer or the time for day.

d) The processing in a transaction system must support an organization's operation.

Types of transaction processing systems:

Transaction processing systems are of two types:

1) Batch processing system:

a) Batch processing involves processing several transactions at the same time.

b) The result of each transactions are not available immediately when the transaction is being entered.

c) The database or the master file need not to be accessed every time for batch processing.

d) With batch processing, data is organized and stored before the master file is updated. errors can occur during this step.

e) It is easy to maintain batch processing system.

Batch processing occurs in two stages:

1) The transaction data is collected and sorted into sequential order. This data is then stored into transaction file.

2) The data is then processed by updating the master file. This step is difficult because it requires the steps to occur in certain order. If an error occurs then the entire batch fails.

Updating a batch requires sequential access. The only way to access data is by using a magnetic tape. A batch will start at the beginning of the tape, then reading it from the order it was started. It is very time consuming to locate specific transactions.

2) Real Time Processing System:

Features of real time processing system:

a) Transaction in real time processing are stand alone both in entry to the system and also in handling the output. Each transaction is unique.

b) Real time processing requires the master file to be available more often for updating and reference.

c) This processing has a fewer errors as the transaction data is validated and entered immediately.

d) More computers are required, as the operations are not centralised. Hence it is difficult to maintain real time processing.

e) Updating in real time uses direct access of data. This occurs when data are accessed without accessing previous data items. the storage device stores data in a particular location based on a mathematical procedure. This will then be calculated to find an approximate location of data.

Files used in Transaction Processing System:

The transaction processing system uses five types of files to store and organize data. The files used are:

a) Master file:

It contains information about an organization's business situation. Most transactions and databases are stored in master file.

b) Transaction file:

It is the collection of transaction records. It helps to update master file and also serves as audit trails and transaction history.

c) Report file:

It contains data that has been formatted for presentation to the user.

d) Work file:

It contains temporary files in the system used during processing.

e) Program file:

It contains instruction for processing of data.

Backup procedures:

In order to prevent data loss when a transaction process system breaks down, a well designed backup system is put into use. There are two main types of backup procedures:

1) Grandfather-father-son:

a) This procedure refers to at least three generations of backup of master files. The recent backup is son and the oldest is father.

b) It is commonly used for a batch transaction processing system. If a system fails during a batch run, the master file is recreated using the son backup and then restarting the batch.

c) However if the son backup file is corrupted, then the next generation i.e father is required.

d) Organization can have up to twenty generations backup.

2) Partial backups:

a) This occurs when parts of master files are backed up.

b) The master file is usually backup to magnetic tapes at regular times. this could be daily, weekly or monthly.

c) Completed transactions since the last back up are stored separately ans are called journals.

d) the master file can be recreated from the journal files on the backup tape, if the system fails.

Recovery process:

A recovery process is required for a transaction processing system to detect and correct errors when they occur. This process involves:

a) Journals:

It maintains an audit trail of transactions and database changes. Journals use transaction log and database change logs. A transaction log records all the essential data for each transactions, including data values, time of transaction and terminal number. A database change log contains before and after copies of records that have been modified by transactions.

b) Checkpoints:

A checkpoint record contains necessary information to restart the system. It is possible to resume processing from the most recent checkpoint when a failure occurs with only few minutes of processing work that needs to be repeated.

c) Recovery manager:

A recovery manager is a program that restores the database to correct condition which can restart the transaction processing.

Types of recovery system:

Depending upon how the system failed, there are two types of recovery systems:

1) Backward recovery:

It is used to undo unwanted changes to the database. It reverses the changes made by transactions which have been aborted. It involves the logic of reprocessing each transaction, which is very time consuming.

2) Forward recovery:

It starts with a backup copy of the database. the transaction will then process according to the transaction journal, that occurred between the time the backup was made and present time. It is much faster and more accurate.

Subspecies of transaction processing system:

a) Manufacturing and production systems: These systems supply data to operate, monitor and control the production process like purchasing, receiving, shipping etc.

b) Sales and marketing system: This system supports sales and marketing function by facilitating the movement of goods and services from the producers to consumers.

ex: sales support, telemarketing, order processing etc.

c) Human resource system:

This system deals with recruitment, placement, performance evaluation and career development of the firm's employees.

ex: Personal record keeping, training, skills benefits etc.

d) Finance and accounting system: this system maintains records concerning the flow of funds in the firm and produce financial statements like balance sheets, income statements.

ex: Visa's credit card payment system.

Advantages of transaction processing system:

1) Good data placement: the database in this system is designed to access patterns of data from simultaneous users.

2) Short transactions: Short transactions enables quick processing. this avoids concurrency and paces the system

3) Real time backup: Backup is scheduled between low times of activity to prevent lag of the server.

4) High normalization: This lowers redundant information to increase the speed and also improves backups.

5) Archiving historical data: Uncommonly used data are moved to other database to improve backup times.