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INTRO TO TP SYSTEMS
IS 340
BY
CHANDRA S. AMARAVADI
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IN THIS PRESENTATION..DefinitionsCharacteristics of TP systemsTP conceptTP cycleCase studies of SABRE, VISACase study of Payroll systemTP and competitive advantage
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Transaction processing systems (TP systems)
Systems which process business transactions
Transaction:events to which a business mustRespond; exchange that has financial implications
DEFINITIONS
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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)
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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.
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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?
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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
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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
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ORDER PROCESSING
Receive orderCustomer
InventoryBack order
WarehouseReceipt of goods, invoice
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FOR DISCUSSION
Discuss a payroll system from the point of viewof inputs, processing and outputs.
PROCESSESINPUTS OUTPUTS
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TP EXAMPLES & CASE STUDIES
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SABRE HISTORY
A fledgling airlineInformal booking prior to the warDemand for travel after WWIIManual booking
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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]
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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
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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
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DISCUSSION
What characteristics of TP systems are exhibited by SABRE?
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Merchant/Store
Merchant’s bank
Card- issuing bank
Cardholder
VISA’S CREDIT CARD PROCESSING
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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
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10 million merchants world-wide accept VISA + MCVISA + MC largest TP system45 billion transactions a year
VISA’S CREDIT CARD PROCESSING
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Payroll Order entry Billing Credit card Reservations Inventory Stock trades
OTHER APPLICATIONS OF TP
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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
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THE END!