INTRO TO TP SYSTEMS

IS 340

BY

CHANDRA S. AMARAVADI

IN THIS PRESENTATION..

DefinitionsCharacteristics of TP systemsTP conceptTP cycleCase studies of SABRE, VISACase study of Payroll systemTP and competitive advantage

Transaction processing systems (TP systems)

Systems which process business transactions

Transaction:events to which a business mustRespond; exchange that has financial implications

DEFINITIONS

Concerned with business operations Deal with customers, suppliers, vendors, gov. Transactions/exchange with these entities High volume (millions of records) Also involve inquiries (was check #23 cashed?) Could be batch or online (OLTP)

BATCH VS ON-LINE PROCESSING

BATCH PROCESSING: Transactions are grouped and processed at the end of a specified time period.

ONLINE TRANSACTION PROCESSING: Transactionsare processed as and when they occur.

CHARACTERISTICS OF TP SYSTEMS..

Traditionally mainframe + COBOLTraditionally mainframe + COBOL Shift towards object-oriented, client-serverShift towards object-oriented, client-server Towards PC-based and Web-based systemsTowards PC-based and Web-based systems

What type of organizations use TP systems?What type of organizations use TP systems?Who are the primary users of TP systems?Who are the primary users of TP systems?

Online Data Entry

Scanners

Summary Reports

Transaction Reports

Application.

Files

Transaction Processing

E.g. receipt for a deposit

Database Update

E.g. monthly statement

TP CONCEPT

Data entry - keyboards, scanners, (e.g. credit cards, price tags)

Processing itself (Batch, OLTP)

Database updates Reports/documents Inquiries

Maintain account...

If dep. then acct-bal=bal. + amt

If withdrawal then...

Classify Sort Merge Group Update

TP CYCLE

ORDER PROCESSING

Receive orderCustomer

InventoryBack order

WarehouseReceipt of goods, invoice

FOR DISCUSSION

Discuss a payroll system from the point of viewof inputs, processing and outputs.

PROCESSESINPUTS OUTPUTS

TP EXAMPLES & CASE STUDIES

SABRE HISTORY

A fledgling airlineInformal booking prior to the warDemand for travel after WWIIManual booking

SABRE HISTORY..AIRLINE RESERVATIONS AFTER THE WAR

“A large cross-hatched board dominates one wall, its spaces filled with cryptic notes. At rows of desks sit busy menand women who continually glance from thick referencebooks to the wall display while continuously talking onthe telephone and filling out cards. One man sitting in theback of the room is using field glasses to examine a changethat has just been made high on the display board. Clerks and messengers carrying cards and sheets of paper hurry from files to automatic machines. The chatter of teletypeand the sound of card sorting equipment fills the air”

[-- From “The Virtual Corporation by Davidow and MaloneP43]

SABRE HISTORY..Charles Amman (R&D) takes chargeTubes and marbles prototype Next improvement: “Reservisor” system Still 8% transactions in error Takes 12 people, 15 steps and 3 hrs! IBM jumps inAfter many false starts, SABRE in 1962Installation $2.1 million, HW 37 million$16,000 per agentRevenues of $500 million

reservation system used by AA Worldspan, Galileo, Patheo, and Abacus

45 million records 200,000 new records added daily 60,000 terminals 6 mainframes

SABREIs a classic example of a TP system

DISCUSSION

What characteristics of TP systems are exhibited by SABRE?

Merchant/Store

Merchant’s bank

Card- issuing bank

Cardholder

VISA’S CREDIT CARD PROCESSING

VISA’S CREDIT CARD PAYMENT

Customer makes purchaseCustomer makes purchase Merchant’s bank linked via VISA network to the bank Merchant’s bank linked via VISA network to the bank

that issued the cardthat issued the card Card issuing bank approves the chargeCard issuing bank approves the charge Bank subtracts fee and pays rest to merchantBank subtracts fee and pays rest to merchant Merchant’s bank submits charge to VISAMerchant’s bank submits charge to VISA VISA charges credit card companyVISA charges credit card company Card holder’s acct # checked against black listCard holder’s acct # checked against black list

10 million merchants world-wide accept VISA + MCVISA + MC largest TP system45 billion transactions a year

VISA’S CREDIT CARD PROCESSING

Payroll Order entry Billing Credit card Reservations Inventory Stock trades

OTHER APPLICATIONS OF TP

Competitive advantage of TP◦ operational η◦ better service

For Discussion:◦What would TP systems do in a company like

State Farm? What are the operational benefits?

TP AND COMPETITIVE ADVANTAGE

THE END!