Transaction Processing System

6 Mar

Hey Bloggers,

This is my fifth blog in my series, explaining the different types of information systems. For those of you who would like to view my other blogs, please check out my page. In this blog I will be discussing Transaction Processing Systems (TPS)

TPSs help Operational Managers keep track of basic activities and transactions of the organisation, such as sales, receipts, cash deposits, payroll, credit decisions, and the flow of materials in a factory. A TPS is a computerised system that performs and records the daily routine transactions necessary to conduct business, such as sales order entry, hotel reservation, payroll, employee record keeping, and shipping.

There are two types of Transaction Processing: Batch processing and Real-time processing

  • Batch processing refers to the processing of a set of transactions from one set of documents after transferring them to another medium such as usb or cd. The medium is processed through the computer system after the required documents are recorded on it, and so would involve more time
  • In Real-time processing, as and when a transaction is required to be processed, its details are directly typed into the computer system and can be processed immediately.

A very relatable transaction processing example is the credit card process. This video is makes it a lot easier to understand the process:


I believe some of the main advantages and disadvantages or TPSs are as follows:


  • Can handle several thousand operations at once
  • Access to untapped markets. Allows people across the world to access and buy a business’s goods and services


  • Complex system may not be large enough to utilize TPS
  • Security and hardware problems
  • Perhaps too much consolidation is required

I hope this blog has improved your understanding of Transaction Processing Systems. Thanks for taking your time to read it and stay tuned for my next blog on Office Automation Systems which will conclude my series of information systems!


‘Management Information Systems Managing the Digital Firm’ by Kenneth C. Laudon and Jane P. Laudon


4 Responses to “Transaction Processing System”

  1. sad111310996 March 6, 2013 at 1:56 pm #

    great video

    • sad111346076 March 6, 2013 at 8:11 pm #


  2. sad111337346 March 6, 2013 at 5:09 pm #

    Interesting blog! The video was helpful too!

    • sad111346076 March 6, 2013 at 8:12 pm #

      Thanks, glad the video could help

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