Transaction Processing

As data flows into an organization, the files that keep track of the data must be updated. For example, data flows into a bank from other banks and ATM machines. Often this data is gathered as it occurs into a transaction file. Periodically (often overnight) the data in the transaction file is used to update the main file of data.

The picture shows the main file and the transaction file as input to a program. The output is a new, updated main file. The previous version of the file can be kept as backup.

Management information science is the field that studies how to organize and manage the information of a corporation using computers and files. Usually the business school of a university has a management information science department.