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CHAPTER 27: Computer Based Data Processing

Data Processing Defined


Data Processing is the transformation of data into useful information.
Data Processing System is any operation or combination of operations on data to generate the
desired information. It involves the resembling of facts into more meaningful terms, the summarizing
of a mass of information into a form from which judgment can be made and responsible action taken.
Data and Information Distinguished
DATA
- Defined as a collection of unorganized facts
- Consist of raw facts or figures obtained from one or more sources

INFORMATION
- Consists of data that have been organized into a meaningful manner.
- Consists of processed data

Basic Elements of Data Processing System


1. Input
This pertains to the act of acquiring or capturing data which will be transformed into meaningful
information. The activities in this stage are:

1. Initial recording of data on some medium (For example, a source document).


2. Classifying of data according to predetermined system of classifications
(For example, a chart of accounts)
3. Batching or accumulation of similar inputs to be processed as a group.
4. Verification of data, which involves checking its accuracy prior to submitting it for
processing.
5. Scanning which involves searching for and assimilating facts about events.

2. Processing
This pertain to the operations required to transform data into information required by users.
The transformation of inputs into outputs is accomplished by a processing components with
three subsystems.
1. Storage (Memory) is necessary for retaining inputs (data and instruction)
2. An Arithmetic Unit (ALU) manipulates the data in mathematical and logical way.
3. Control System manages the transformation process by overseeing the storage of
data and instructions.

3. Output
This involve the delivery or communication of information to the users.
The activities in this stage are:
1. Reporting which is the formal presentation and distribution of processed data.
2. Issuance of documents such as checks, invoices, and reports.
3. Retrieval which is the fetching of a specific item or items of stored information at the
request of a user.
4. Analysis which encompasses all the ways in which receivers utilize outputs
Basic Data Processing Operations
The basic data processing functions involve the following steps, the order and techniques in
application of which may vary with the firm, the data being processed and the equipment used:

1. ORIGINATING
 This involves gathering of data within and outside the entity as transactions takes place.
2. RECORDING
 This involves the capturing or entering of data into formal form used in the processing
routine.
3. CLASSIFYING
 This means identification of data having common features and grouping them together
to determine the appropriate treatment.
4. SORTING
 This is the arrangement of data according to order, sequence, or sequence required
before they are processed.
5. CALCULATING
 This involves the application of mathematical process to data.
6. SUMMARIZING
 This is the compression of a body of data into a more concise form.
7. COMMUNICATING
 This is the process of transmitting of data from the point of acquisition to a processing
location.
8. STORING
 This involves the filing of data.

Methods of data Processing

1. Manual Data Processing


Basic data processing operations are performed manually or by hand utilizing pencil or pen,
with or without the use of minor physical or mechanical devices such as calculators,
typewriters or check writers.

2. Electro- Mechanical Data Processing


Electro-mechanical equipment such as punched-card machines are used to increase the
speed and accuracy of data processing operations. This method requires the data to be in a
machine language, a code in the form of holes in cards.

3. Electronic Data Processing


Data processing is done with the use of an electronic device or computer. Data are converted
into magnetic and electronic impulses in or on electronic device.
Overview of Computer- Based Data Processing
Electronic Data Processing (EDP)

EDP is a data processing system that uses a computer. A computer is an electronic device which
performs sequences of internally stored instructions to accept data, apply the prescribed processes to
it and supply the result of these processes.

ADVANTAGES OF EDP
1. Extremely Fast
2. Extremely Accurate
3. Greater Processing Control
4. Large Data Volume handled with small external storage requirement
5. Reduced cost

DISADVANTAGES OF EDP
1. Relatively high cost of equipment
2. High cost of systems design and programming
3. Channeling of work
4. Conversion to an electronic system

COMPONENTS OF THE COMPUTERIZED SYSTEM


The main Components of Computer system are:
1. Hardware
2. Software
3. People ware
4. Procedures
5. Data

1. Hardware
This refers to the configuration of physical equipment comprising the input, processing and output
phases of an EDP system. This Includes:

1. Central Processing Unit (CPU)


The central processing unit or principal hardware component of a computer system represents
the “brain” of the computer which performs the execution of the program instructions, process
data and transfers data between the main storage and input/output devises.
A. CONTROL UNIT
Part of Digital computer or processor which determines the execution and interpretation
of instruction in proper sequence, including the decoding of each instruction and the
application of the proper signals to the arithmetic unit and other register in accordance with the
decoded information.

B. ARITHMETIC UNIT
Portion of the hardware of a computer in which arithmetic and logical operations are
performed. Arithmetic operations refer to the basic mathematical operations of addition,
subtractions, multiplication and division. Logical Operations refer to the comparison of two
items to determine if one item is less than, greater than or equal to the other.

C. STORAGE OR MEMORY
Device in which data can be stored and from which they can be obtained at a later time.
Primary storage is closely connected to the CPU in the central processor. It consists of
electronic components that store letters, numbers, and special characters in processing.
a. RAM – used to large quantities of data
b. ROM – permanent storage used to hold the basic low-level programs and data.

2. PERIPHERAL EQUIPMENT
This encompasses the auxiliary machines that may be placed under the control of the CPU.
Classified as on-line or off-line, it consists of input, storage and output devices.
INPUT DEVICES/ DATA ENTRY DEVICES
These are the devices that that provide a means of transferring data into CPU storage.
1. Data Entry Terminal – with a keyboard is online equipment that is a common input device.
The terminal includes a monitor that allows display of user input and computer output.
a. Dumb terminal – has no other functions
b. Smart Terminal – has processing capacity
c. Intelligent Terminal – has Programming capacity
d. Terminal Emulator – permits a microcomputer to interface with a maintenance

2. Magnetic Diskette Drive. A device capable of writing and reading data recorded on an eight
or five-and-one quarter inch, thin, flexible, (floppy) magnetic disk enclosed in a semi-rigid
protective jacket.

3. Magnetic- Ink Character Reader (MICR). Reads characters based on an amount of magnetic
ink or actual shape.

4. Optical Scanner. Reads characters based on their shapes using light-sensing machines and
laser technology.

5. Console. Used for communication between operators and the CPU.

6. Remote Terminals. Communicates with communication processor from a location that is time,
space, or electrically distant.

7. Point-of-Sale Stations. Transaction devices that also perform as remote terminals.

8. Bar Code Readers. Read universal product codes which are vertical bars that identify a
manufacturer and the item.
9. Plastic card with magnetic strips. Hold financial/ nonfinancial data concerning an individual.

10. An alternative to keyboard and text-based inputs is the use of a Computer mouse.

11. Touch Screen. Provides another limited alternative to keyboard input.

12. Digital Scanners convert documents and pictures into digital form.

13. Voice Recognition input devices are still another alternative to keyboard input. These
systems compare the speaker’s voice patterns with prerecorded patterns.

14. New forms of Mobile data Acquisition methods are available


a. Palmtop computers are miniature notebook computers with keyboard input

b. Pen based input is possible with devise that have flat-screen tablet on which the user can
print directly with a special stylus.

c. Other special devices may be used to gather inventory data, read meters, inspect goods,
etc.

OUTPUT DEVICES
These are the devices that produce readable data for users or inputable data for further processing.

1. Cathode Ray Tube (CRT). Television-like devices to display output on a built in screen
2. Printers. Prints data on paper.
3. Plotter. Graphs output, such as temperatures
4. Magnetic Tape. Encodes output data as magnetized spots on a magnetic tape.
5. Magnetic Diskette Drive. Used extensively for this purpose by microcomputers
6. Console. Direct communications with CPU
7. Remote Terminals. Generally combine with electrical typewriters to provide convenient input
with a visual display.
8. Microfilms project the output characters onto the screen of a CRT where a high-speed
microfilm camera captures the displayed data at speeds much faster than printers.
9. Microfiche. Same principles as microfilm but records a large amount of data on a small
rectangular piece of film greatly reduced image size.
10. Multimedia output device. Combines video, text, graphics, animation and sound to produce
multidimensional output.
STORAGE DEVICES
These are the devices that store data that can be subsequently used by the CPU.

1. Magnetic drum. A cylinder with a surface coating of magnetic material that stores binary data
in the form of positive or negative charges on its surface.
2. Magnetic Disk. Similar to magnetic drum only on a disk-shaped metal plate.
3. Magnetic Cards/strips. A length of flexible plastic material on which short pieces of magnetic
tape have been mounted in a side arrangement.
4. Magnetic diskette drive. Used extensively for this purpose by microcomputers.
5. Floppy Disks. Removable and are suitable for the backup of small files.
6. CD-ROM. Drives are laser optical disks that provide capacities of over 660 MB.
7. Image Processing. Allows users to store graphic images in digital format on secondary
storage devices.

OTHER PERIPHERAL EQUIPMENT


A. Controllers are hardware units designed to operate specific input or output units, e.g.,
terminals and printers.
B. Channels are hardware units located within or outside the CPU that are designed to handle
the transfer of data into or out of primary storage.
C. Console consists of a VDT, a keyboard, and a printer.
D. Mode is a hardware device in a network that can act as a message buffer (hold part of the
message until the rest is received), switch messages and serve as an error control.
E. Emulator is a hardware device that permits one system to imitate another, that is, to use the
same data and obtain the same results as the other systems.
F. Performance Monitor is a hardware or software that observes and records system activities.

II. SOFTWARE
This refers to all computer programs, procedures, rules and related documentation which direct
and control the computer hardware in data processing, most notable of which are the system
programs and application programs.

A. System software
These are the software that supervise the operations of the CPU, control the input/output
functions of the computer system, translate programming languages and provide various other
support services.
They Include:
1. Operating System which control and schedule hardware use. It is a set of software programs
that help a computer run itself, and the application programs designed for it.An operating
System also manages job scheduling and accounts for computer usage, controls input and
output, assigns storage locations in main memory, and protects data in the event of a system
malfunction.

Several Different Operating systems permit a single configuration of hardware to function in the
following modes:
a. Multiprogramming The operating systems processes a program until an input/ output
operation is required.
b. Multiprocessing. Multiple CPUs process data while sharing peripheral units, allowing two or
more programs to be executed simultaneously.
c. Virtual Storage. The operating system separates user programs into segment pages
automatically.
d. Batch Mode (single thread) – programs are processed from beginning to end without
interruption in processing.
e. Time sharing differs from multiprogramming in that the CPU spends a fixed amount of time on
each program.
f. Multitasking is multiprogramming on a single-user operating system for example, in a
microcomputer.

The following are the popular operating systems:


a. DOS – is used for older, 16-bit personal computers. It is based on the IBM standard. MS-DOS
is a text-based desktop operating system made by Microsoft.
b. Microsoft’s Windows 95 – is a 32-bit system with the ability to rum programs using more than
640K of memory (the limit for DOS).
c. UNIX- is a multi-user, multi-tasking operating system with different versions suitable for
personal computers, workstations, minicomputers, and mainframes.
d. Linux- is a version of UNIX-like operating system that runs on X86, Alpha, and PowerPC
processors.
e. OS/2 is a 32-bit system used with IBM and IBM- compatible personal computers and
workstations and with Intel chips. OS/2 Warp is the latest version.
f. Macintosh OS X (ten) is a desktop operating system based on Rhapsody. Macintosh OS X is
made by Apple computer and will run on Motorola/ IBM PowerPC chips.
g. MVS is a mainframe operating system made by IBM.
h. NetWare is a dedicated network operating system made by IBM.
i. BeOS is a high-performance desktop operating system made by Be that runs on Motorola/
IBM PowerPC and Intel Pentium.
j. AmigaOS is an old but popular operating system that is being resurrected by Gateway
Computers. Only Low-end servers can run on this operating system.

2. DATABASE MANAGEMENT SYSTEMS (DBMS)


Which perform multipurpose data handling functions.
3 Primary Methods of Structuring Database Include:
a. Hierarchical – The data elements at one level “own” the data elements at the lower level.
b. Networked – Each data element can have several owners and can own several other
elements.
c. Relational – A database with the logical structure of a spreadsheet.

3. Utility programs
Which perform basic EDP Operations such as sorting, merging and other file maintenance.

4. Interpreting Program
Which translates instructions written in the programming language (BASIC, COBOL,
FORTRAN, etc.) into machine language.

5. Compiler Program
Which reads and converts the whole program first and execute it after the entire source code
has been translated.

6. Source Program
Program written in all nonmachine languages or source languages. They must be converted
into object programs before they can be used directly by a processor.

7. Object Program
A program of machine readable and executable instruction to be followed by the CPU.

8. Assembler Program
Programs that convert source programs written in assembler language (a mnemonic language)
into object programs.

9. Telecommunications Monitor Program


Provides edit capabilities and file maintenance to users, monitors, on-line terminals, and
handles input to application programs.

10. Access Control Software


Protect files, programs, data dictionaries, processing, etc., from unauthorized access; restricts
use of certain devices; and may provide an audit trail for access attempts.

11. File Access Managers


Provide for organizing and controlling data in a logical manner and for different models of
access

12. Library Management Software


Stores, updates and protects source programs, job command statements, and, in some cases,
files and object programs, files, and job command statements.

13. Online Editors


Are useful to programmers for creating and maintaining source programs, files and job
command statements.
14. Communications Controllers
Allocate network resources and functions, control the connections between programs and
terminals, and transfer data between control nodes and terminals.

15. Operations Management Software


Provides for tape and disk management and for job scheduling in a batch processing
environment.

16. Software Monitor


Is a program or package that performs functions similar to those of hardware monitors; thus it
records signals emitted by the system’s components.

17. Firmware is software wired permanently into the hardware.

18. Kernel Program is a short program that run on different systems by a potential buyer to provide
information about their processing characteristics.

19. Middleware is software that oversees the interaction between disparate computers.

20. Business Intelligence


Spans a category dedicated to extracting from corporate databases for purposes of business
analysis.

21. Macro is a program that records keystrokes and commands used in repetitions jobs, thereby
reducing the necessary keystrokes.

22. Antivirus is intended to prevent initial infections, stop replication attempts and remove viruses.

23. Groupware Provides support for the activities of work groups.

Application (User) Program


These are the programs that are written to perform specialized functions or data processing
requirements in any applied discipline.
Application programs may be developed internally or purchased from vendors.
 Vendor-Produced software is in either source or object code, but vendors prefer to sell latter.
 Application Software productions is obviously a vital aspect of system development, and
control over its maintenance after implementation is likewise crucial.

III. PERSONNEL
The specialized job categories associated with computer systems include:
A. Information System EDP Manager
Has overall responsibility for supervising and controlling all activities performed in the data
processing department.
B.SYSTEM DEVELOPMENT PERSONNEL

1. System Analyst
 Receives potential applications of data processing and works with users in defining
requirements for informations
 Evaluates the existing application system and designs new or improved data processing
procedures
 Designs the various computerized and manual control
 Monitors the program maintenance function and maintains system documentation.
2. Systems Programmer
 Writes and maintains programs that manage the resources of the computer system.
 Provides the link between the needs of application systems and the requirements of the
operating system.
 Supplies technical guidance concerning the operating system to all other members of the
processing staff.
3. Application Programmer
 Determines the logic of the computer programs required by the overall system designed by
the system analyst.
 Codes the computer procedures for programmed controls
 Debugs the resulting program and prepares documentation
4. Database Administrator
 Responsible for managing the database and restricting access to the database to authorized
personnel.
 Controls all aspects of the design and development of database and is responsible for the
preparation of the data dictionary
 Provides continuing liaison between the EDP design team and he users in regard to logical file
structures and data content.
D. Operations Personnel
1. Computer Operator
 Responsible for the daily operations of both the hardware and the software.
 Mounts magnetic tape on the tape drives, supervise operations on the operator’s console, accept
any required input and distributes any generated output.
 Provides physical security over data and program files that are in an operational mode.

2. Data Entry Operator


a. Converts manual input to machine-readable form by entering it in a keyboard into a device
that will either record the data on machine-readable media or enter it directly into the
computer for processing.

3. Librarian
a. Maintains custody and control over magnetic tapes, computer documentations, and other
computer-related software.
4. Control Check
a. Acts as liaison between users and the processing centers
b. Monitors manual input that is transmitted from the functional areas
c. Monitors computer output, performs control balancing and distributes reports coming from
the system.
d. Maintain error logs and ensures compliance with control totals.
IV. PROCEDURES
These refer to the process for obtaining and preparing data, operating the computer, distributing the
input from computer processing and controlling processing steps
V. Data
Raw facts to be gathered, processed to generate information which in turn is presented to the user as
basis for decision making.
The Data Hierarchy

1. File. An organized collection of related records.


2. Block. A group of records held or processed as a unit.
3. Record. A group of related items or fields of data handled as a unit
4. Field, item, word. A group of related characters that also is a subdivision of a record
5. Byte, Character. A group of bits that represents a character or one column in a field that contain
some representation of a character
6. Bit .A binary digit for representing characters

A master file would contain information that does not change with transaction update. For example, a
payroll master file would contain the employee’s name, number, department rate of pay, deduction
specifications and so on.

While a detail file or Transaction file is a file of temporary information relative to master files. For
example, a weekly payroll contains employee number, regular time, over time, the hours the employee
has worked in a given period and other information that changes each pay period.
Flowcharts
Nature

Flowchart is a symbolic diagram of a specific part of an internal accounting control system indicating
the sequential flow of data and or authority.
Hierarchy of Computer Processes
Computers typically used in business today are commonly identified as:
1. Supercomputers
2. Mainframe
3. Minicomputers
4. Microcomputers
5. Personal Computers
Supercomputer
These are the largest type of computers. They can process billions of instructions per second.
Mainframe
Mainframe commonly refers to the processing unit plus other components contained in the same
physical cabinet at the processing unit in a large computer system. These units tend to possess very
large capacities and are capable of extremely high speeds in carrying out all functions.
Minicomputers
Minicomputers were historically used in multi-user or multi-terminal environments. The systems
provide computing power and peripheral device access to a number of users and do not require a
special environment for operation.
Microcomputers
Microcomputers typically contains the processor, internal storage and limited number of chips,
perhaps as few as one each. Generally, they are limited to one user per machine and are portable-
you may even carry the unit in your hands.
Personal Computers
Personal computers are microcomputers that serve the needs of individual users. The distinguishing
characteristics is its use, which is individual, whether domestic or business.
Notebook, laptop, and palmtop computers are the smallest forms of personal computers.

MODES OF COMPUTER OPERATIONS


A. Based on the timing of transaction processing
1. BATCH MODE
Data are collected into groups (batches) before processing. The collected data are then processed at
regular intervals to update existing information.
2.ON-LINE MODE
Data are processed immediately after a transaction is made to update current information. Processing
time in this system is instantaneous. This is also known as a real-time processing and used by
airlines and off-track betting.
B. Based on the physical location of the equipment.
1. In- House Systems
Computer hardware and personnel are maintained by the company which utilizes them.
2. Not-In-House or Off-premise systems
Main processing hardware belongs to another organization. The most common off premise
systems are
a. Block Time
This involves rental of time by one firm of another organization’s computer.
b. Timesharing
This involves accessing another organization’s computer through terminal devices.
Computer shares its time with a number of users.
c. Service Bureaus
This involves the use of an outside organization to provide a wide range of data
processing services (from systems analysis and design to the actual running of
programs with data) for a fee.

COMPUTER INFORMATION SYSTEMS


The following discusses several computer information systems and developments in information
software that we often encounter.
Small Computers
Also referred to as microcomputers, personal computers, laptop computers, these small computers
are powerful, affordable and provide a cost-effective information processing alternative for entities
that might otherwise be constrained by manual processing.
Computer or IT Network
Network of computers may be linked together through telecommunications. The development of
telecommunications that is, the electronic transmissions of information by radio, wire, laser,
microwave, fiber optics – has made possible the electronic transfer of information between
computers.
Telecommunications
Many entities use telecommunications to transmit numeric, alphanumeric, voice, video, facsimile and
other data by wire, fiber optics, microwave stations, satellites or laser.
Electronic Commerce (E-Commerce)
Involves individuals and organizations engaging in a variety of electronic transactions with computers
and telecommunications networks.
Three areas of risk associated with electronic commerce are
A. Business Practices
B. Transaction Integrity
C. Information Protection

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