Coatbridge High School
Commercial Data Processing
Commercial Data Processing
Organisations and businesses need to collect, store, process and
output large amounts of information each day. They have to
gather, check and store information about customers. Banks, for
example, have to deal with millions of customers and millions of
withdrawals as well as deposits each day. Businesses also need to
communicate with their customers on a regular basis by
sending out statements, letters or invoices.
CDP is most commonly used in:
• Shopping, particularly Supermarkets and High street stores.
• Mail Order Companies.
• Banking.
• Paying employees.
1.
REASONS WHY WE NEED COMMERCIAL DATA
PROCESSING
A.
Volume of Documents
A mail order company has to process thousands of
application forms, order forms, invoices, payment slips,
returned and missing forms every day.
B.
Speed of Processing
The system will greatly speed up processing of this
information, given the computer’s ability to store and
retrieve data quickly and to perform large numbers of
complicated calculations on the data at high speeds.
C.
Speed of Access
The system is able to search through large amounts of data
to find what has been requested instantly. This is important
when dealing with many thousands of enquiries about
payments, orders, or goods in stock.
D.
Repetitive Tasks
Many of the routine tasks that have to be performed in
business are extremely repetitive. When faced with such
repetitive tasks people tend to get bored, lose interest, get
tired and make mistakes. Computer systems are never make
mistakes.
CREDIT
E.
Management Information
It is crucial for managers to access up to date information.
A supermarket manager can check how many customers
each checkout has had, what is selling well, what goods
need a promotion, what deliveries are expected this week,
who’s off ill etc.
2.
ADVANTAGES OF USING CDP
Computer-based systems are useful because:
•
They can handle large volumes of information.
•
They can speed up the processing of information.
•
They give instant access to information.
•
They can handle repetitive tasks.
•
Data entered by one person can be used by lots of
people.
•
Management is made easier by having easy access to
information.
DISADVANTAGES OF A MANUAL SYSTEM
•
A manual system needs more people to operate it,
costing more in wages.
•
It will be much slower to process transactions and to
access information requested.
•
It will be more prone to error and data loss.
Credit
Single entry with multiple use:
In a big organisation, information entered once can be used
by several departments.
3. THE DATA PROCESSING CYCLE
There are 4 stages in the data processing cycle:
1. Data Collection and Preparation
Data or information is collected and translated into a form
the computer can understand.
2. Data input
Data is entered into the computer.
3. Data Processing and Storage
Data is processed by the computer e.g.. adding up a bill,
stock control, calculating wages. The data that has been
processed produces a file of updated information.
4. Data output
Results or information is output in a way that is useful to the
user, usually a printout. Sometimes this output is used again
as data input for a different process.
The best way to see how the stages of the Data Processing Cycle are
linked is with a diagram.
Copy and complete the diagram of the Data Processing Cycle
below:Data _______
and _________
Data
_________
Data
_______
Data ________
and Storage
DATA and INFORMATION:
What is the difference between DATA and INFORMATION?
DATA: is a collection of letters, numbers text which have no
meaning to us.
INFORMATION: is something meaningful that we can
understand.
When information goes into a computer it becomes data
because the computer does not understand it. Information has
meaning. Data has no meaning.
Example:
DATA could be AXF151B. If we are told it is a car
registration number it become INFORMATION.
4.
DATA COLLECTION, PREPARATION AND INPUT
DATA COLLECTION AND PREPARATION
At the start of the DP cycle, the data which is required has to be
collected and put into a form which the computer can understand.
We are going to look at some of the most common ways of
labelling or preparing data.
A. BAR CODES: A series of vertical lines of varying thicknesses
representing a particular number often printed underneath. The numbers
are for our benefit. The first 2 are for the country of origin, the next 5
describe the manufacturer, the last 5 describe the article (size, colour,).
At the till, or Point of Sale Terminal, it is processed directly. Bar codes
DO NOT give PRICE details.
B. MAGNETIC STRIP CARDS: Magnetic Stripes appear on credit cards
(like Access, Visa etc). The stripes contain information about the
account of the person who is buying the goods. Data from magnetic
stripes is processed by the computer directly.
The above 2 methods are used mainly in shops and banking:
C. MARK SENSE CARDS: These are cards that are divided into columns that
allow a mark to be made on them. The computer reads the position of the
marks on the card. E.g. The lottery. Marks are made on the numbers you wish
for the lottery. The computer knows what numbers you have picked by
reading the position of the marks on the card.
Advantages:
•
Increases the speed at which till operators process goods.
This means shorter queues at the checkout.
•
The shop can offer a greater range of goods with less chance
of running out. If an item gets below a certain level (the
reorder level) the computer warns that the stock is running
low and that more must be ordered.
•
The shopper gets an itemised bill and there is less chance of
mistakes.
•
Provides management with information such as: items
which are not selling well, items which have been in stock
for too long and the speed with which shop assistants are
dealing with each customer.
Disadvantages:
•
It is easier for shops to alter prices with out the customer
realising.
•
Redundancies because fewer people are needed.
D. CHARACTER RECOGNITION:
Computers can sometimes recognise characters. There are two
types of character recognition :(i) Magnetic Ink Character Recognition (MICR)
Characters are printed on a cheque with a special magnetic ink. A
MICR reader sorts out the cheques. As the cheques are processed,
the amounts spent are automatically totalled and the account is
adjusted accordingly.
(ii) Optical Character Recognition (OCR)
One of the quickest and most convenient ways of getting
information into the computer would be to read the printed page
directly into it. The OCR reader reads characters by matching their
letter patterns with those stored in memory. OCR readers can be
used to read normal printed characters like those produced by a
typewriter. They are fast and accurate. The post office has OCR
readers to read postcodes on letters, but it can’t accurately read
handwritten addresses.
E. Smart Cards
A smart card is like a credit card with a “brain”.
The brain on the card is a small computer chip.
This chip can be programmed to store information, or
programmed to perform certain tasks.
The computer chip on a smart card has much less space and
processing power than your desktop computer.
Smart cards are used in telephone cards and bank cards.
You may have heard of ‘chip-and-PIN’ which means that
all purchases with smart cards must be verified with a PIN.
Advantages of Smart Cards
•
Can hold much more information than a magnetic stripe.
•
Is much safer from unauthorised alterations
•
Is more reliable than a magnetic stripe
•
Is compatable with computers
DATA INPUT
After the data has been prepared, it can then be entered into the
computer in one of the following ways :A.
DIRECT DATA ENTRY:
(i)
Key-to-disc: data is read from a form by an operator
and entered at a keyboard. Once it has been entered,
checked and if necessary corrected, it is temporarily
stored on disc before being processed.
(ii)
Data can be entered directly from the source
(e.g. bar codes, OCR and MICR). In this type of
direct data entry there is no typing, which makes it
faster and has less mistakes than key-to-disc. This is
the more common use of the term direct data entry.
DATA INPUT (cont.)
B.
REMOTE DATA ENTRY:
Most organisations have a central mainframe computer
which is linked to all of its branches via a WAN. When data
is entered at a terminal it updates the mainframe computer
records remotely.
Checking DATA – Which ever method is used to input the data, steps must be
taken to make sure that it has been entered correctly.
A.
Check Digits
These consist of extra digits added to a number to act as a
check that the number is entered correctly. They are very
common on bar-codes and ISBN numbers on every book.
Computers can perform a calculation on a series of numbers
to check that the number is correct.
e.g. Account No = 234564
2 +3+4+5+6 = 20/5 = 4
Check Digit = 4
If the account number is entered incorrectly the check digit
will not equal 4 and the computer will recognise the mistake.
Credit
B.
•
•
•
•
COMPUTER CHECK - VALIDATION:
The computer can check:
The type of the data e.g.. numeric or alphabetic.
If the data is within an allowed range of numbers / letters,
(range check)
The length of the data e.g.. number of characters, (length
check)
The computer can give the user a list of options to choose
from, (restricted choice)
If any of these are wrong, the computer knows that a mistake has
been made and can warn the operator.
C.
VERIFICATION:
This involves the same data being typed from the source
document by two people, or one person typing in data twice.
The system notices the differences in what is typed and asks
the second typist to decide what the correct input should be.
This process for double typing obviously doubles the time
for data entry. The Tax Office and the Department of Social
Security check data this way.
When you change your password you have to type it in
twice. This is called verifying your password.
5.
PROCESSING AND STORAGE OF DATA
Data can be subdivided into the following groups:
1.
FIELDS (smallest amount of information)
2.
RECORDS
3.
FILES (largest amount of information)
A KEY FIELD is a field which is unique to each record.
Data is processed using INTERACTIVE PROCESSING:
Data is processed or updated as the transaction is entered
and any enquiries are replied to immediately.
Example: This sort of system is required when it is important to
have as much up-to-date information as possible, e.g..
When booking seats in a cinema or on an aircraft.
Advantages:
• The data is always up to date.
Disadvantages:
• Expensive: Interactive processing requires direct
access so a hard disc is required.
• Can only do one job at a time because all the
power of the CPU is needed.
Time to revise your HARDWARE notes
There are 2 ways of accessing data once it is stored on disk or
tape:DIRECT ACCESS:
This is the type of access used with magnetic disc and CD ROMs.
this type of access is quick. Direct access is used when there’s a
small number of transactions to be done compared to the amount of
records on the master file. (ie. 5000 records on the master file and
only 20 transactions to be done.)
When files are accessed DIRECTLY the MASTER FILE is
changed.
SEQUENTIAL ACCESS:
This is the type of access used with magnetic tape. Sequential
access is used when most records on the master file are going to be
accessed and there is no need to go quickly to certain records.
Records need to be sorted into order when sequential access is
being used. The transaction tape needs to be sorted before it is
merged into the master tape.
6.
OUTPUT
Visual Display Unit (VDU)
In CDP the output can appear on the screen. A monitor is
used to verify data and to browse through files.
Hard Copy:
The user may need to take the output away and study it
therefore the need to get a printed output on paper. It could
be an order form, a bill or a list of everything sold.
Sometimes special paper is used called pre-printed
stationery. Details that are not going to change can be
printed on the paper before it is bought.
Credit
File:
Sometimes the data that is output after processing is not
visible to the user and is stored as a FILE. These files are
usually used as input at a later stage in the processing.
Commercial data processing requires a mainframe computer this
includes:
1. A terminal for entering data. A terminal has a keyboard
and a monitor but no processor (CPU). Terminals are
connected to the CPU of the mainframe computer via a
network.
2. A Central Processing Unit to do all the processing. It has
to be fast and able to address a large amount of memory.
3. A set of hard disk drives for storage. For use in interactive
processing.
4. A set of tape units for storage. For transaction files and
backup files.
5. A printer for output.
Credit
Remote Terminals
The computer terminals do not have to be in the same building as
the mainframe computer. They can be some distance away from
the mainframe computer and are called remote terminals. They
would be connected by a telephone lines and would be part of a
WAN.
7. IMPLICATIONS
A. SOCIAL
(i) Effects on Business:
The use of CDP systems make businesses more efficient
because they can process data very quickly. All operations are
carried out at speed, accurately.
(ii) Job Types and Careers:
The types of jobs that people do will change. Some jobs are
disappearing because computers can now do the work faster
than people can. There are some new jobs now that exist
because of computer.
1. Systems Analyst :
The job of systems analysis is to see how a system works at the
moment and decide what can be improved and how to improve
it. It can involve
• Designing programs to do jobs that used to be done
manually.
• Decide on the software and hardware required for a particular
application.
2. Programmer:
• Working with the systems analyst to correct faults found in the
system.
• Writing the programs for any new computer system the systems
analyst has designed.
3. Engineer:
Engineers are needed to design, build and repair computers.
Engineers look after the hardware.
4. Network Manager:
Network managers are needed to ensure that all users can log on
and access their work on the network. Also that users have
access to the peripherals they need, e.g. printers, scanner etc.
The manager must take care of the financial side of operating a
network, working within a budget etc.
Credit
(iii)Computer Crime and Fraud:
Access to files held on mainframes must be protected to prevent
information falling into the wrong hands. If people could access
the bank mainframe and get into someone else’s account they
could “steal” money. This is an example of fraud.
READ
The section on ‘Computer Crime’ in the ‘Standard Grade
Computing Studies’ text book, pages 180 - 181.
B. TECHNICAL
(i) E-commerce
Much more business is being performed over the internet.
Goods can be bought and sold over the internet.
There are 2 forms of e-commerce:-
1
Online banking
2
Online shopping
1. Online Banking
Customers not longer need to travel to their bank office or
wait until it opens. A customer can log-on the bank’s
mainframe computer from the comfort of their own home.
The customer would type in their account number and their
password (PIN number) to gain access to their account
details.
2. Online shopping
Customers can access a web site that is a shop’s on-line
catalogue. A customer clicks on the items that they want and
enter the details (size, colour, etc). The customer then gives
the company their credit card details and their address. The
goods are then sent to the customer’s address and the cost is
charged on the customers credit card. This type of web site is
known as a secure site.
(ii)
Electronic Funds Transfer (EFT):
EFT is a modern banking system that transfers money from
one place to another. It works instantly so it saves time in
clearing cheques and doing paperwork. Using an EFT system
a person’s salary can be transferred electronically to their
bank. With the use of a plastic card containing a magnetic
strip (e.g. switch card) and a special electronic funds transfer
point of sales terminal (EFTPOS), goods can be bought
without using cash. The cost is automatically deducted from a
person’s bank account through the computer network and
credited to the shop’s account.
C.
ECONOMIC
(i)
Initial Cost:
The initial costs of setting up a Commercial Data Processing
application (like a payroll) are expensive. You need:
hardware, software, printers, backing storage, consumables,
furniture, telephones and building to house everything. CDP
applications happen on a very large scale and involve a large
number of people - this is called a mass market.
(ii)
Running Costs:
•
Maintenance costs.
•
Replacement costs, hardware & software.
•
Wages.
•
Cost of Consumables.
(iii) Mass Market
Due to e-commerce businesses are able to sell their products all
over the world using the internet. This means small local
businesses are able to sell their products to anyone on the
planet that has access to the internet. The company now has
access to millions of customers, a mass market.
(iii)
Security & Privacy
a. Physical
Files should be kept locked up. People that work with
computers should have identification badges so that other
people cannot get into computer areas. Security locks on
doors. Terminals with no floppy disc drives.
b. Software:
•
Multiple passwords. Level of access dependent on
position in organisation.
•
Software which can trace the history of a
transaction.
•
Encoding data. Without the code information is
garbage.
c.
Accuracy of Information:
As part of the Data Protection Act, companies
have a legal obligation to ensure that the data
they store on computer is accurate.
d.
Privacy
Companies also have a legal obligation not to
infringe on people privacy when obtaining the
information and that they do not disclose
anyone’s private information
HOWEVER…………..
e.
Customer Lists
When giving your details to a company e.g credit
card company, catalogue you have to fill in a
form. On that form you will be asked if you DO
NOT wish your details to be sold on to other
companies, (this is normally in very small type so
most people miss it).
The original company can sell you name and
address to other companies in order to regain some
of the costs it took to get the information in the
first place.
Other companies would buy the lists to get
specific people’s addresses e.g. a list of all people
who bought golf equipment.
(v)
Current Legislation
The Data Protection Act (1984),extended in 1998 and the
Computer Misuse Act (1990) have been introduced to protect
the rights of the general public.
In general terms the Data Protection Act states that personal
data shall:
• be collected and processed fairly and lawfully
• only be held for a specified, lawful and registered purpose
• only be used for registered purposes or disclosed to
registered recipients
• be adequate and relevant for the purposes for which it is
held
• be accurate and, where necessary, kept up-to-date
• be held no longer than is necessary for the stated purpose
• have appropriate security surrounding it.
These are the parts of the Data Protection Act which refer to
the Data Controller i.e. the person / company keeping and
using the data and Data Processor ie the people and
companies processing the data
People who the data is about or Data Subjects in the ACT
have the right:
•
•
•
•
to know whether personal data is held about them
to see the data
to challenge it if it is wrong
to gain compensation for unlawful disclosure of personal
data or inaccurate data