Definitions of data processing
·         manipulation of data into a more useful form
·         Includes; numerical calculation, operations (e.g. classification of data), transmission of data from one place to another

Organizations undertake data processing activities to obtain information with which to control and support the following;
·         Production/operations e.g. manufacturing resource planning, manufacturing execution systems, process control
·         Marketing activities e.g. customer relationship management, interactive marketing, sales force automation etc.
·         Human Resource Management e.g. compensation analysis, employee skills inventory, personnel requirements forecasting
·         Financial activities e.g. cash management, credit management, investment management, capital budgeting
·         Accounting activities: order processing, inventory control, accounts receivable, accounts payable, payroll, general ledger

The processing cycle
·         Two types of processing cycles
-          Basic Data Processing cycle and
-          The Expanded Data Processing cycle

Basic Data Processing cycle - Consists three basic steps, input, processing and output
Input: Initial data or input data are prepared in some convenient form for processing. E.g. computers input data is recorded into input medium such as internal memory, cards, disks, flash etc.
Processing: Input data are changed, usually combined with other information to produce data in a more useful form. E.g. pay checks may be calculated from the time cards or a summary of sales for the month may be calculated from the sales orders.
Output: Results of the preceding processing step are collected. The output data/result form depends on the use of the data. E.g. pay checks for employee, printed summary of monthly sales for management, or data to be stored for further processing.

Expanded Data Processing Cycle - More steps; Origination, Distribution, and Storage.
Origination: refers to the processes of collecting the original data into source documents. E.g. graded test papers
Distribution: refers to distribution of the output. Recordings of the output data are often called report documents. E.g. class grade sheets
Storage: crucial step in many data processing procedures. The processed results are stored for use as input data in the future. A unified set of data storage is called a file which consists of records. A collection of files forms a database

Data processing operations
Recording: is the transferring of data onto some form or document. The operation occurs during origination, and distribution steps, and throughout the processing cycle.
Duplicating: refers to reproducing the data onto many forms or documents
Verifying: since recording is usually done manually, it is important that the recorded data be carefully checked for errors. E.g. typed reports are reread for correctness
Classifying: refers to separating of data into categories
Sorting: is arranging data in a specific order
Merging: this operation takes two or more sets of data, all sets having been sorted by same key, and puts them together to form a single sorted set of data
Calculating: refers to performing numerical calculations on the (numerical) data
Summarising and report writing

Types of Data Processing (DP) systems - Devices so far have evolved into three types
1.       Manual mechanical devices; for calculation & processing data, dark ages (5000 B.C – 1890 A.D). Simple, motorized by human hand e.g. Abacus (5000 B.C.), Oughtred’s Slide Rule (1632), Pascal’s Calculator (1642) etc.
2.       Electromechanical devices: powered by electric motor, switches and relays for control of processes e.g. desk calculators and punched card processing devices. The electromechanical devices; middle ages (1890 – 1944)
3.       Electronic devices: modern age begun in 1944 - date. It includes the modern computer which have evolved into five generations with advancement of processing hardware; the vacuum tubes, transistors, integrated circuits and microprocessors.

Advantages of electronic data processing
-          Speed and Accuracy
-          Automatic operations
  • Most important advantage of modern Electronic computer
  • Cary out a sequence of many different data processing operations without human intervention
  • Automation is possible through stored program
-          Decision making capability
·         Computer can perform certain decision instructions automatically
·         Determining whether a statement is true or false
·         Based on that results, choosing one or the other course of action out of alternatives

Types of Electronic Data Processing (EDP) systems
  • Classification of EDP systems according to the way data is processed
-          Response time, time elapse between data input/inquiry-result (online, offline & online real-time systems)
-          Number of users & Programs e.g. time sharing programs
-          Degree of Integration of subsystem e.g. DSS
  • Offline Data Processing System:
-          input data or transactions grouped into batches, and then
-          sorted sequentially before being subjected to computer processing 
  • Online Data Processing System:
-          Characterised by:
-          remote Central processing unit (CPU)
-          two way communication between the CPU and the input or terminal devices
-          fast data processing responses
-          data is input as soon as it is available with files being update most of the time
-          usually expensive to operate, the processing speed faster than offline

·         Online Real – Time Data Processing System;
-          Insignificant time delay between creation of data and the actual processing.
-          The time delay is insignificant when the processed data/information is generated at the appropriate time for managers to make timely decisions.
-          Components; computer, software, terminals, communication network and database.
  • Time – Sharing Data Processing System:
-          Three basic characteristics; multiprogramming, online interaction & real-time response
  • Decision-Support System (DDS):
-          Provides interactive information support to managers and professionals during the decision-making process
  • Distributed Data Processing (DPP) System
-          characterized by mini- or microcomputers (the satellites) for small scale localised based solution
-          Remote CPU or larger computer for organisational processing or any larger applications for satellite computers. Examples include the hospital Distributed Data Processing

  • Batch processing
-          Refers to processing of data or information by grouping it into groups or batches.
-          The batches handled in sequence of separate stages of processing e.g. validation, sorting, computing etc., at pre-defined frequencies. E.g. a weekly factory payroll is naturally processed weekly.
  • Online processing
-          consist of terminals connected to a computer and
-          communication by lines that connect different department of the business/system to a computer
  • Interactive processing
-          Online order processing
-          Online building society transactions
-          Online payroll processing
-          Online point of sale (supermarket) check out systems
  • Real-time processing
-          Airline seat reservation system
-          Online warehouse stock control
-          Online hotel accommodation system
-          Online banking
  • Random processing
-          Online credit enquiries
-          Online product availability enquiries
-          Online account enquiries
-          Online package holiday availability enquiries


A comprehensive business plan have ten elements that guides management in running key managerial activities and achieving organizational goals.

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