There are different systems in this world and one of the systems that are commonly used by different companies is Information System (IS). According to Bagad, “Information System is defined as a group of elements organized with the purpose of supporting management and operational decision making. ” IS, can help managers in decision making and help to satisfy customers because it helps in developing products with good quality. For some people, IS is a source of information that can be used to have competitive advantages in different areas like finance, operations, and for human resources.
IS can give a huge competitive advantage, according to R. Kelly Rainer and Casey G. Cegielski, Some IS support only some part of the organization, while some support the whole organization and some can support groups of organizations. There are two types of Information System that can support the entire organization. The two types are Enterprise Resource Planning (ERP) and Transaction Processing System (TPS). Why do some companies use ERP? According to Aleksey Osintsev , business software applications are designed for fast changing dynamic environments just Enterprise Resource Planning (ERP).
Most of the times, they are built on an architecture that for fast and easy execution. Any change in the system setup or data structure is implemented but must reflect business realities. [Osintsev (2011)] What is TPS and why do companies use it? According to SEARCA that necessary Information Technology (IT) facilities are used to enhance data recovery strategy because it has more secure internet access. Network services must have a structure must support the connectivity and access to network resources and internet services.
This will help increase the reliability and performance to improve different services. TPS are the backbone of an organization because they update constantly at any given time because someone may need an inventory balance, an account balance or the total current value of a financial portfolio. Another one is the Online Transaction Processing (OLTP) which is the web-based counterpart of TPS. Computerization of every process in minimizing errors, especially human errors, and processing time, it can also boost up productivity.
It can also act as data storage in computers. These are the best means for storage and management of data to serve as huge knowledge base and can be used in different financial transactions and decision making. TPS can do a lot of staff in different areas but all of them follow the same steps or procedures. According to Kenneth J. Baldauf and Ralph M. Stair, every TPS follow a common set of activities. First is Data Collection, this is where a data related to transaction is captured.
Next is Data Editing where it checks if the data that is captured is valid. It is followed by Data Correction that takes care of invalid data. Then, there is Data Manipulation that processes the data that is needed to get the results. After that, there is Data Storage to store data that will be needed by the system. Last is Data Output, these is where the system reveal the data in a form of receipt, certificates, and other forms of documents. There is another kind of process, according to Gary B. Shelly et al. hat TPS is among the first computerize system that process that process business data by using batch processing. Batch processing is where the computer gets all the data or transaction first before processing it. It is commonly use by enterprise-size organizations in calculating paychecks and producing reports where data is presented as table or graphs. Every process revolves around transaction. According to Patrick J. Montana Ph. D. and Bruce H. Charnov Ph. D. , transactions are information which is not directly involve in the decision making process.
Transactions can happen from the inside, outside and even in between organizations and environment that is needed by the management. The management use it in the form of summary of reports, calculations, and other form of document. While according to Gary B. Shelly, Thomas J. Cashman and Harry J. Rosenblatt, batch processing is collecting data first then process it in groups. This means that all the transactions are being group then each group is being processed together. This is usually used in processing large amount of data like routine schedule, paychecks and credit card transactions.
Batch program requires fewer network resources. But according to Microsoft, transactions are completed successfully as a group but if any step fails, no other steps can be completed. Most TPS databases are designed to have good data placement, runs on single stored procedure transactions that minimize long-term locks and improve concurrency, can back up a database while it is being used, reduce redundant information, and can handle the large numbers of concurrent users and quick response.
Then, according Dan Matthews and Rick Veague, databases are the integration point where applications that are connected can communicate with each other. Now, Companies are investing for a new technology that eliminates or lessen errors and to gain advantage. This is the integration point that is necessary in building competence in management by investing in database technology to achieve lessen cost.