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Fundamentals of 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.

Data and Information Distinguished

Data Information

- collection of unorganized facts - consists of data that have been organized


into a meaningful manner

- consists of raw facts or figures - it is processed data

obtained from one or more sources

Basic Elements of Data Processing System

Every data processing application whether manual or electronic has four basic elements and
these are input, processing, output and storage. These elements can be expressed in symbolic form as
can be seen below:

INPUT

PROCESSING STORAGE

OUTPUT

The formal data processing activities in terms of three-stage process with several activities within
each process are as follows:

A. Input
- pertains to the act of acquiring or capturing data which will be transformed into meaningful
information,

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

2. Classifying of data according to predetermined system ( ex, a chart of accounts )

3. Batching, accumulation of similar inputs to be processed as a group

4. Verification of data, checking its accuracy prior to submitting for processing

5. Scanning, searching and assimilating facts about events and relationships

B. Processing

- operations required to transform data into information

1. Storage, for retaining inputs, partial results, and finished output

2. Arithmetic-logic unit (ALU), manipulates data in mathematical and logical ways

3. Control subsystem, manages the transformation process by overseeing the storage of data and
instructions

C. Output

- delivery or communication of information to users

1. Reporting, formal presentation and distribution of processed data

2. Issuance of documents (ex, checks, invoice, and reports)

3. Retrieval, fetching of a specific items

4. Analysis, encompassed of all ways in which receivers utilize output

Basic Data Processing Operations

1. Originating - involves gathering of data within and outside the entity as transaction take place

2. Recording - capturing or entering of data into a formal form used in the processing routine

3. Classifying - identification of data having common features and grouping them together

4. Sorting - arrangement of data according to order, sequence, or sequence

5. Calculating - involves the application of mathematical process to data

6. Summarizing - compression of a body of data into a more concise form

7. Communicating - process of data from the point of acquisition to a processing location

8. Storing - involves the filing of data


Methods of Data Processing

It has three methods of data processing:

1. Manual Data Processing

- 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 etc. The
workload is carried by the people.

2. Electro-mechanical Data Processing

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

3. Electronic Data Processing

- this is use of an electronic device or computer. The data are processed by transporting them
within the system on wires, circuits, microcircuits, magnetic tapes, magnetic cores, etc. At
extremely speed and with a minimum of human interaction.

Overview of Computer-Based Data Processing

EDP Defined

Electronic Data Processing (EDP) - data processing system that uses a computer

Computer - is an electronic device which performs sequences of


internally stored instruction to accept data, apply the
prescribed process to it, and supply the result 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 Computer System ( Hardware, Software, Personnel, Procedures & Data )

I. Hardware - refers to the configuration of physical equipment comprising the input,


processing, and output phase of an EDP system

1. Central Processing Unit (CPU) - brain of the computer which performs the execution of the
programs instructions, process data and transfers data
between the main storage and output/input devices.

The CPU contains an arithmetic-logic unit, internal storage unit, and a control unit.

A. Control Unit - part of the computer which determines the execution and interpretation of
instructions in proper sequence

B. Arithmetic-logic Unit - portion of the hardware of a computer on which arithmetic and logical
operations are performed

C. Storage or Memory - device in which data can be stored and from which they can be obtained at
a later time

(1) Internal Primary Storage - includes register memory for very brief storage of small amounts
of data. Random-access Memory (RAM), used to large quantities
of data.

(2) Read-only Memory (ROM) - used to hold the basic low-level programs and data

2. Peripheral Equipment - encompasses the auxiliary machines that may be placed


under the control of the CPU. It consists of input, storage and
output devices.
A. Input Devices/Data Entry Devices - devices that provides a means of transferring data into CPU
storage. Examples are:

(1) Data Entry Terminal - a keyboard is online equipment that is a common input
device. Compose of dumb terminal, smart terminal,
intelligent terminal, and terminal emulator.

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

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

(4) Optical Scanner - reads character 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 at this time, space, or electrically distant.

(7) Point-on-Sale Stations - transaction devices that performs as remote terminals

(8) Bar code Readers - read universal products codes to identify the item

(9) Plastic Cards w/ magnetic strips- hold financial/non financial data

(10) Computer Mouse - alternative keyboard and text-based input is the use of it.

(11) Touch Screen - a technology provides another limited alternative to


keyboard input

(12) Digital Scanners - converts documents and pictures into digital form

(13) Voice Recognition

(14) New forms of mobile data acquisition and they are palmtop computers, pen-based input etc.

B. Output Devices - device the produce readable data for users for further
processing. Examples are:

(1) Cathode Ray Tube (CRT) - television like device to display output on a built in screen

(2) Printers - prints data on paper.

(3) Plotter - graphs output

(4) Magnetic Type - encodes output data as magnetized spots on a magnetic tape

(5) Magnetic Diskette Drive

(6) Console

(7) Remote Terminals

(8) Microfilm

(9) Microfiche
(10) Multimedia output device

C. Storage Device - devices that store data that can be subsequently used by
CPU. Examples are:

(1) Magnetic Drum

(2) Magnetic Disk

(3) Magnetic Card/strips

(4) Magnetic Diskette Drive

(5) Floppy Disks

(6) CD-ROM (Compact disk- read only memory)

(7) Image processing

II. Software - refers to all computers program procedures, rules and related to
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 - software that supervise the operation of the CPU, control output/input
functions of the computer system, translate programming languages and
provide various other services. They include:

1. Operating System - control and schedule hardware use. And helps a computer run itself
and the application programs designed for it

Several different operating systems permit a single configuration of hardware to function in


the following modes:

a. Multiprogramming

b. Multiprocessing

c. Virtual Storage

d. Batch Mode

e. Time sharing

f. Multitasking

The following are popular operating systems:

a. DOS

b. Microsoft’s Windows 95
c. UNIX

d. Lunix

e. OS/2

f. Macintosh OS X

g. MVS

h. NetWare

i. BeOS

j. AmigaOS

2. Database Management System - which perform multipurpose data handling functions. Also a
comprehensive software package for the purpose of
creating, accessing, and maintaining a database.
Three primary methods of structuring a database include:

a. Hierarchical - data elements at one level “own” data elements at the next lower level

b. Networked - data element can have several owners and can own several other elements

c. Relational - database with the logical structure of a spreadsheet

3. Utility Programs - performs basic EDP operations

4. Interpreting Program - translate instructions written in the programming language into


machine language

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

6. Source Programs - programs written in all nonmachine languages or source languages.


Must be converted into object programs before they can be used
directly by a processor.

7. Object Program - programs of machine readable and executable instructions to be


followed by the CPU

8. Assemble Programs - programs that convert source programs written into assembler
language into object programs

9. Telecommunications Monitor Program -provide edit capabilities and file maintenance to


users

10. Access Control Software - protects files, programs, data dictionaries, processing, etc, from
unauthorized access

11. File Access Managers - provides for organizing and controlling data in a logical manner

12. Library Management Software - stores, updates, and protect source programs, job command
statements and, in some cases
13. Online Editors - useful to programming for creating and maintaining source programs,
files, and job command statements

14. Communication Controllers - allocate network resources and functions, control the
connections between programs and terminals, etc.

15. Operation Management Software - provides for tape and disk management for job
scheduling in a batch processing environment

16. Software Monitor - program or package that performs functions similar to those of
hardware monitors

17. Firmware - is software wired permanently into the hardware

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

19. Middleware - software that overseas the interaction between disparate computers

20. Business Intelligence Software - spans a category dedicated to extracting information from
corporate databases for purposes of business analysis

21. Macro - program that records keystrokes and command used in repetitious jobs

22. Anti-virus Software - intended to prevent initial infections, stop replication attempts, detect
infections after their occurrence, mark affected systems
components, etc.

23. Groupware - provides support for the activities of work groups, for example, e-mail,
electronic meetings, scheduling, etc.

B. Application (user) programs - these are programs that are written to perform specialized
functions or data processing requirements in any applied discipline such as business, science, medicine,
education and law enforcement

III. Personnel - without people, nothing seems to function, certainly not with computer systems

A. Information System EDP Manager - overall responsibility for supervising and controlling
all activities performed in the data processing department such as designing, developing and
maintaining the business systems and running the data processing equipment.

B. System Development Personnel

1. System Analyst

2. Systems Programmer

3. Application Programmer

4. Database Programmer
C. Operations Personnel

1. Computer Operator

2. Data Entry Operator

3. Librarian

4. Control Clerk

IV. Procedures - 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.

Data Organization

The data in the computer record may be arranged in a variety of ways once data elements
have been selected for a file. The data hierarchy is:

1. File - an organized collection of related records

2. Block - group of records held or processed as a unit

3. Record - group of related items or fields or data handled as a unit

4. Field, Item, Word - group of related characters that also is a subdivision of a record

5. Byte, Character - group of buts that represent a character or one column in a field
that contain some representation of a character

6. Bit - a binary digit for representing characters

Master File - contain information that does not change with each transaction update

Detail File - a file of temporary information relative to master file

Flowchart - a specific part of an internal accounting control system indicating the sequential
flow of data. Examples, ledger, journal or computer-generated document.

The following questions should be answered before a flowchart is prepared:

a) Who performs the various functions in the routine?


b) What are these functions performed?

c) What work is performed and is the work considered input or output?

d) What are the functions performed and in what sequence?

e) How are the functions performed and in what sequence?

( FIGURE 27.6 FLOWCHARTING SYMBOL)

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

Supercomputers - largest type of computer. Can process billions of instructions per second.

Mainframe - refers to the processing unit plus other components contained in the same
physical cabinet as the processing unit in a large computer systems.

Minicomputers - used in a multi-user or multi-terminal environments. System provide


computing power and peripheral device access to a number of users and
do not require a special environment for operation.

Microcomputers - contain the processor, internal storage and limited number of chips, perhaps
as few as one each. Limited to one user per machine and are portable -
you may even carry the unit your hands.

Personal Computer - microcomputers that serve the needs of individual users. Examples, laptop,
notebook and palmtop computers (smallest personal computers).

Modes of Computer Operations

A. Based on the timing of transaction processing

1. Batch Mode - data are collected into groups before processing. The collected data
are then processed at regular intervals to update existing
information.

2. On-line Mode - data are processed after a transaction is made to update current
information. Processing in this system is instantaneous. This is
also known a real-time processing and used by airlines and
off-track betting.

The essential requirements of a real-time processing system include (1) direct connection
(on-line) between input/output devices and the central processor and (2) fairly fast response time,
allowing two-way communication between the user and the central processor.

Such systems may be classified as follows:

1. Basic System - one-user-at-a-time system where only one


terminal-at-a-time is allowed to be linked to the
central processor

2. Time-shared System - multi-user device, providing each existing on-line


terminal an allocation of central processor time
such that each user gets virtual direct access to the
system

3. Multiprogramming System - technique that allows more than one program to


time-share a central processor by
interweaving or overlapping their execution

4. Multiprocessing System - use of two or more processors to divide jobs and


execute their various segments
simultaneously or asynchronously

B. Based on the physical location of the equipment

1. In-house System - computer hardware and personnel are maintained by


the company which utilizes them.

2. Non-in-house or off premise systems - main processing hardware belongs to another


organization. The most common off-premise
system are:

a. Block time - involves rental of time by one firm of another organization’s


computer

b. Timesharing -involves accessing another organization’s computer through


terminal devices.

c. Service bureaus - involves the use of an outside organization to provide a wide


range of data-processing services for a fee.

Computer Information System

In this information age, business rely heavily on compute systems that differ both in technology
and processing capability. The following discusses several computer information system and
developments in information software that we often encounter.

Small Computer - referred to as microcomputer, 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 trough telecommunications.


The development of telecommunication that is, the electronic transmissions
of information by radio, wire, laser, microwave, fiber optics - has made
possible the electronic transfer of information between computers.

a. Local Area Network (LAN) - network computers and peripheral devices within a limited
area, say a single building or small computers
connected to main computer.

b. Wide Area Networks (WANs) - networks that span a large geographical area such as
regional, national or even global areas. They often
support electronic data interchange and may enable
organization to create intranets.

Telecommunications - to transmit numeric, alphanumeric, voice, video, facsimile and other


data by wire, fiber optics, microwave stations, satellites or laser.
Telecommunications links used commonly now are, electronic
commerce (E-Commerce) systems, electronic data interchange
(EDI) systems, electronic funds transfer (EFT) systems, point of
sale (POS), etc.

Electronic Commerce (E-Commerce) - involves individuals and organizations engaging in a variety


of electronic transactions with computers and
telecommunication networks. The networks involved
may be publicly available or private to the individuals
and organized involved. Three areas of risk associated
with electronic commerce are:

a. Business Practices

b. Transaction Integrity

c. Information Protection

Electronic Data Interchange - is another system that many business firms have adopted. EDI is
the electronic exchange of business transactions in a standard
format, from one entity’s computer to another entity’s
computer through an electronic communication network.
Commonly used for purchasing, processing, accounts
payable, invoicing and financial application.

Database Management System - integrated collection of files stored on-line. A database avoids
unnecessary redundancy in data files by storing relevant data
in single record, which authorized end users can then access
with software.
End User Computing - small computers have in some cases created as situation in which
the user is responsible for the development and execution of
the computer application.

Computer Service Bureau - or organization record and process data for companies which
may have limited internal computer capabilities.

Internet, Intranet, Extranet - the internet is a set of linked networks throughout the world that
facilities inexpensive communication and information
transfer among computer, with gateways allowing mainframe
computers to interface with personal computers. Intranets are
internal company networks that use the same software as the
internet. Extranets are created by some business that enable
selected outside uses to access their intranets.

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