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Data Processing

Data processing
• Data processing is, broadly, "the collection and manipulation of items
of data to produce meaningful information."[1] In this sense it can be
considered a subset of information processing, "the change
(processing) of information in any manner detectable by an observer.”
Data processing functions
Data processing may involve various processes, including:
• Validation – Ensuring that supplied data is "clean, correct and useful"
• Sorting – "arranging items in some sequence and/or in different sets."
• Summarization – reducing detail data to its main points.
• Aggregation – combining multiple pieces of data.
• Analysis – the "collection, organization, analysis, interpretation and
presentation of data.".
• Reporting – list detail or summary data or computed information.
• Classification – separates data into various categories.
The data processing cycle
There are four stages of the data processing cycle.
1. Data input
2. Data storage
3. Data processing
4. Information output
Four Stages of the Data Processing Cycle


Data Data Information

input processing output
Data Input
• The first step in the data processing cycle is data input.
• During the data input stage, transaction data are captured and
converted to machine-processible form.
• Traditionally, transaction data has been captured on preprinted
source documents.
• What are some source documents?
Data Input – Source Documents
– Purchase requisitions
– Checks and remittances from customers
– Customer orders
Data Input
• How can data input accuracy and efficiency be improved?
• Have a well-designed computer screen resembling that of source documents.
• Have the system prompt the user to input all necessary data.
• Use scanning devices instead of keying.
• Have source data automation like ATMs.
Forms of Information Output
• Information is presented in three forms:
1 Documents
2 Reports
3 Responses to a query
Forms of Information Output
• Documents are records of transactions or other company data.
• What are some examples of documents?
– checks and invoices transmitted to external parties
– purchase requisitions used internally
Forms of Information Output
• Reports are prepared for both internal and external users.
• Internal users need reports to control operational activities, to make
decisions, and design strategies for the business.
• External users need reports to evaluate company profitability, or to
comply with regulatory requirements.
Forms of Information Output
• Some reports, such as financial statements and sales analyses, are
produced on a regular basis.
• Others are produced on an exception basis to call attention to
unusual conditions.
Forms of Information Output
• Response to queries:
• To respond to problems and questions that need rapid action or
answer, PCs or terminals are used to query the system.
• Online forms are often used to display output
Purpose of Information Output
• External users:
• Financial statements are produced to meet stewardship requirements.
• Income tax returns and 10-K filings with the Securities and Exchange
Commission are produced to comply with legal requirements.
Purpose of Information Output
• Internal users:
• Budgets, sales forecasts, and projected cash flow statements are prepared for
planning purposes.
• Production and delivery schedules, open purchase orders, and inventory stock
status reports are prepared to help effectively manage day-to-day operations.