On-Line Processing

Definition of Online Processing:

Online processing refers to processing of individual transactions as they occur from their
point of origin as opposed to accumulating them into batches. This is made possible by such
direct access devices as Magnetic disk and Magnetic Drum and number of terminals connected
to, and controlled by a central processor. In this way, various departments in a company can be
connected to the process by cables. If operating companies are a number of miles away from the
processor then they are linked by means of telegraph or telephone lines. This type of processing
provides multi access to information files by terminal users and also enables them to update with
transactions data.
It is a non-sequential process in which data is directly transmitted between input/ output
device and a computer system via communication links. It is a method of processing where many
users have direct access to the same system, and where the file is updated as soon as the
transaction is completed.

Special Features

1. In this method data is not accumulated, instead it is entered and executed directly.
2. Quick Processing - By means of direct communication with the computer and continuous
flow of input, the delay between transactions and their processing is avoided.
3. This method reduces the data entry errors, because the user who generates, the data is the one
who keys it in.
4. This system validates data at various points and ensures that correct data is being entered.
5. Under this method the system performs the whole task in a conversational 'manner helping
the data entry process.
6. In on line processing, one has the latest update immediately.

Online processing ensures that the records are in updated at any time whereas this is so
with batch processing say once a week but the fact remains that online processing is usually
more costly. Therefore in choosing one of the processing both updating of records and costs are
to be considered.

 On-line Applications:

Systems are being developed and are already in use for a wide range of application in
different type of industries described below:
a. Electricity and Gas Boards: By means of terminals situated in showroom it is possible to
inform perspective customers of the availability of the appliances in response to their
inquiries.
b. Banking: It is possible to inform bank customers of the status of their accounts in
response to an inquiry by accessing relevant file using on online terminal.
c. Tour Operators Reservation Offices accept telephone inquiries from travel agents
regarding the availability of holidays in respect of client's inquiries. By means of
terminals, the availability of the required holidays can be checked and booked
immediately.
d. Stock Exchange: Terminals located in major stock Exchange through out the country and
the offices of participating brokerage from enable the speedy processing of share
dealings.
e. Stock Control: Terminals located in warehouse provide the means for automatic
recording of stocks, updating of stock records, reservations, follow-up of outstanding
orders and the printing of picking list etc.,
Benefits provided by Online Systems: Online systems provide a number of benefits all of
which assist in improving administrative efficiency which is essential in today's competitive
business environment. A number of benefits are out-lined below:

a. Integration of clerical work with the computer:

On-line systems assist in harnessing activities of clerical staff to the computer by the use
of terminals. They can have access to information which they require for the efficient
performance of their jobs in dealing with customer enquiries and order processing.

b. Elimination of tedious tasks:

Routine clerical tasks are replaced by terminal operations providing a greater degree of
job interest, operating efficiency and job satisfaction.

c. Reduction in paper work:

Volume of paper work generated by normal clerical system and batch processing system
is relatively high. Online systems reduce the volume of print out required for management report
since the information can be displayed on terminal screen on demand.

d. Improved accuracy:

As terminal messages are checked accuracy before being transmitted to the computer by
data validation programs, the quality of formation in a system increases as the input errors are
reduced. Hence, information is more reliable.

e. File updating improved:

Master files are more easily updated by terminal key board with regard to transaction
data, as special runs do not require to be set up as is the case with batch processing applications.

f. Management Information more readily available:

Management information becomes more readily available by direct access facilities
which enables mangers to obtain a greater degree of control to the operations for which they are
responsible.

g. Improved customer services:

Improvements in the level of customers service can be expected in these systems
concerned with appliances sales, booking systems and accounting enquiries.

h. Reduced data preparations cost:

On-line system dispense with the need to convert human sensible data into machine
sensible data thereby eliminating punching and verifying operations. This saves time and the cost
associated with such operations.