Transaction Processing System


A Transaction Processing System (TPS) is a type of information system. TPSs collect, store, modify, and retrieve the transactions of an organization. A transaction is an event that generates or modifies data that is eventually stored in an information system.

From a technical perspective, a Transaction Processing System monitors transaction programs, a special kind of programs. The essence of a transaction program is that it manages data that must be left in a consistent state. E.g. if an electronic payment is made, the amount must be either both withdrawn from one account and added to the other, or none at all.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 TPS. While this type of integrity must be provided also for batch transaction processing, it is particularly important for online processing: if e.g. an airline seat reservation system is accessed by multiple operators, after an empty seat inquiry, the seat reservation data must be locked until the reservation is made, otherwise another user may get the impression a seat is still free while it is actually being booked at the time. Without proper transaction monitoring, double bookings may occur.

Characteristics of Transaction Processing Systems

  1. Rapid Response : 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.
  2. Reliability : Many organizations 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.
  3. 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.
  4. Controlled processing : The processing in a TPS must support an organization’s For example if an organization allocates roles and responsibilities to particular employees, then the TPS should enforce and maintain this requirement.

Features of Transaction Processing Systems

The following features are included in real time 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
  • 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 organize its transaction data :

  • Master file : Contains information about an organization’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.

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