DATA PROCESSING TECHNIQUES (STUDY OBJECTIVE 3)
In transaction processing systems, transactions are processed either in batches or one at a time. Batch processing occurs when similar transactions are grouped together, and that group is processed as a batch. A familiar example of batch processing is processing payroll checks. All time cards for the pay period are collected, and the resulting pay checks are processed and printed in a group, or batch. Accounts payable and accounts receivable transactions are often processed in batches. For example, payments to vendors are often processed in batches. The alternative to batch processing is real-time processing. Real-time processing occurs when transactions are processed immediately. This processing is interactive because the transaction is processed when it is entered.
When determining whether batch or real-time processing is appropriate, system professionals must consider response time, efficiency, complexity, control, and storage media. Batch systems have slow response times, because the transactions are not processed until the whole group is ready to be processed. Real-time systems have fast response times, because transactions are processed as entered. Batch processing is more efficient for a large volume of similar transactions. This is true for several reasons. First, persons who focus on gathering and processing similar types of transactions become efficient at handling those transactions. That is, they become more specialized. There are also efficiencies of scale. Much as an assembly line is efficient, moving many like transactions through a system at the same time is efficient in terms of optimizing the use of personnel and computer resources. Real-time processing is less efficient for large volumes of transactions, since there is duplication of effort involved in processing all transactions individually. Batch systems are much simpler than real-time systems. They are simpler because the hardware, the processes, and the audit trail are less complex. Batch systems have a very definable and obvious audit trail, since there are well-defined start and end dates and a defined set of transactions between those dates. Payroll is, again, a good example of this. If payroll is processed every two weeks, then there is a well-defined beginning date, ending date, and transaction group that belong in this batch.
Real-time systems are more complex because of the interactive nature of processing. If transactions are processed as they occur, it is more difficult to maintain an audit trail of changes to files. In addition, control is easier to maintain in batch systems. Since there are well-defined dates and transaction sets, control totals can be used to ensure accuracy and completeness. For example, the total number of hours on all time cards can be manually added, and this total can be compared with the computer-processed hours to ensure that the batch was accurately and completely entered and processed. Within real-time systems, control totals are difficult to use because there are no groups of transactions for which totals can be derived. Finally, if real-time processing is to occur, records must be stored on random access media. To process a single record at a time, it is necessary to access that single record. Batch processing systems can use either sequential or random access storage media. Exhibit 13-2 summarizes the characteristics of batch and real-time processing.
Since batch and real-time processing are opposite in each characteristic, as shown in Exhibit 13-2, system designers must weigh the trade-offs in deciding which is more appropriate. For example, if rapid response time is critical, system designers will choose real-time processing, even though it may mean less processing efficiency, more complexity, and more difficult control. Sales order and Real-Time Processing systems are often designed as real-time processing systems to provide better customer service because the customer may need a rapid response. On the other hand, there is no immediate need for rapid response in a payroll system, since workers expect to wait until the end of the pay period to receive their pay checks. Therefore, batch processing is often used in payroll.
