Computer-Based Transaction Processing

Computer-based TPSs are often considered the “bread and butter” of the management information system application. No matter how nervous upper management in a medium to large organization is about spending in the information system area, it knows that it cannot pull the plug on its TPS and survive. Actually, many large companies have had computer-based TPSs since the 1950s. Most TPSs have been and still are mainframe oriented. IBM equipment and their compatibles currently claim the lion’s share of the transaction processing marketplace (Mahar, 2003).

Although many companies consider TPS to be their most important computer application, a surprisingly large number of firms have not carried computer-based information processing far beyond the transaction processing stage. TPSs in many organizations today are used in this way as competitive weapons. Additionally, the move from dumb terminals to intelligent microprocessor-based workstations is expected to alter transaction processing in other ways, such as by distributing certain traditionally mainframe-based centralized transaction processing functions closer to their own offices or departments.

As indicated, the TPS supports the processing of an organization’s many transactions. This includes accounting for the transactions on its records, as well as providing support activities such as sending out payment reminders. Recently gaining competitive advantage has become a TPS concern in some firms, especially those that are working to tie customers and suppliers together more closely with the organization’s TPS via electronic linkages.

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