Transaction Processing Systems


TransactionProcessing Systems


TransactionProcessing Systems

Theimportance of sound information systems in any organization cannot beunderrated. There are various types of systems used for variouspurposes, and all ensures the success of a firm both in the short andthe long-run. The section below will look at various aspects touchingon transaction processing systems, such as its use, positive andnegative impacts as well as how it can be improved.

Transactionprocessing systems obtain and process data from an organization’sdaily activities and this entails withdrawal, payment or placingorders among other trivial activities. Clerk staffs are involved intransaction processes within an organization, such as registeringstudents, cancelling orders or making payments among others all ofwhich recording is important. Another business activity isascertaining an action such as printing receipts, sending invoice tocustomer or generating customer’s receipt. Also, used in servicingdata which entails updating old data, adding data, or even deletingobsolete data (BPC, 2014). Transaction processing structures wereprimarily computerized for data processing in organizations. It pavedway for computerization of manual systems, an effort that greatlyreduced staff cost, increased processing time and enhanced quality ofservices rendered to customers (Board of studies NSW, 2007).

Batchprocessing was greatly used among the initial transaction processingsystems. Data was collected over a specified period of time and thenprocessed later collectively. Advancements in technology initiateddevelopment in online transaction processing whereby transaction areanalyzed as they are individually fed into the system. Schoolsusually use online transaction processing whereby a student’sschedule is keyed in and the clerical staff authorize printing of thestudent’s timetable. However, invoices are mostly printedcollectively whereby there are printed and student’s notified whento collect them. Nowadays, organizations use online transactionprocessing for most of their activity processing systems. However,for routine business activities such as invoicing and generation ofpaychecks, batch processing is preferred to online processingstructures. Therefore, batch processing although outdated in still inuse in some organizations (Prakken, 2000). A transaction processingsystem has some inherent positive and negative impacts to the users.Clerical staff can perform some of the business activities such asrecording receipts, harmonizing paychecks and also filling invoicesfaster than a computer. When information is urgently needed, thisfacet of time is advantageous.

Conversely,time has also its shortcomings. Computerizing systems of the entireorganization usually consumes a lot of time to initiate and implementespecially for large organizations. In order to computerize alldepartments in large companies, the process is done in phases whichcould be very slow. Furthermore, a lot of time is consumed trainingnew as well as old employees on how to use computerized systems.Finally, system failure could cause a lot of time to be wastedespecially if there are no manual records (Prakken, 2000).

Transactionprocessing systems are highly accurate although this feature dependson the information keyed in by the clerical staff. Computerizedsystem may not be in a position to detect exaggerated figures,wrongly spelt names or receipts foregone by the clerical employees.Moreover, internal weaknesses such as employee motivation, inadequateskills and poor supervision are still persistent even withcomputerized transaction processing systems in place.

Anotherpositive impact is that computerized transaction processing systemsreduce the risk of long-term embezzlement coupled with fraud withinan organization. In-built features such information replication,audit automation and transaction monitors usually detect dubiousstaff activity. Reporting procedures are also put in place to curtailany malicious activities. However, transaction processing systems arenot completely error-free. They lack discretion and integrity ofdata, two aspects that can greatly compromise the transactionprocessing system.

Lastly,transaction processing systems cut on the size of the organization’saccounting department. Moreover, with increased training and bettersupervisors, lowly-skilled workers could be given a chance to work inthe department. This saves on labour and employee hiring costs. Onthe other hand, equipment cost, upgrades, servicing and technicalsupport could be very costly thus causing a strain on anorganization’s resources.

Thereseveral ways through which transaction processing systems could beenhanced. Among them is ensuring employees comply with a TechnologyAdherence Agreement. This includes regulating unauthorized sites thatcould contain viruses and a downloading policy. For functions such asexcel, email and databases, the organization could consider softwareas a service option. It is a service able to provide online solutionsto problems arising from various workstations. Furthermore, it makesdata largely available throughout the organization’s department(Board of studies NSW, 2007).

Anorganization could also reach their Internet Service Providers toincrease their band width. A higher band width enables multitaskingand also increases application response rate. Another way to enhancethe transaction processing system is through off-storage for keyrecords and databases. Off-site storage is less expensive andprovides an easy way of retrieving data in case of system collapse(BPC, 2014).

Transactionprocessing systems could also use free software available forupgrading systems. Companies such as Microsoft, in an attempt toenhance brand loyalty offer, offer their customers free upgradeservices to their customers. An organization should also ensureperiodic maintenance of the transaction processing systems.Individuals with adequate computer knowledge and skill should beemployed to oversee updates, check for viruses and also scrutinizeerror logs to prevent possible data loss (Prakken, 2000).

Basedon the above, it is clear that, transaction processing systems playsa critical role in an organization as indicated in the numerouspositive impacts such as obtaining and processing data, onlinetransaction processes among others. Therefore, research should becarried out in order to overcome the negative effects such asensuring employees comply with a Technology Adherence Agreement amongothers.


Boardof studies NSW (2007). Stage6 Information Processes and Technology,Preliminary and HSC Courses

BPC(2014). TPS:.Available at

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Prakken,B. (2000).&nbspInformation,organization and information systems design: An integrated

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