Online processing is an automated way to enter and process data or reports continuously as use as the source documents are available. A good example of online processing is bar code scanning. When you buy a shirt at Target, the bar code gets scanned at the register. This shirt (source document) is immediately updated in Target’s inventory system as being sold. It is also updated in cost and sales reports. The online processing system continuously updates the entire accounting system.
What Does Online Processing Mean?
Before computers were widespread in business accounting systems, most companies had to process data or reports in batches. Invoices, for instances, had to be gathered, entered, and processed periodically by employees. Batch processing could be done daily or even weekly. As you can see, this is the most efficient manual way to process data, but it also provides outdated information. After computers and mainframe servers became more affordable for smaller business, most business moved from batch processing to online processing.
As you can see, the online processing system has many advantages over the batch processing system. Online processing is faster and gives continuous data for management. Take our Target example of instance. If batch processing was used, inventory reports would only be updated periodically. This means that management would only have useful inventory data on the day a batch process was run. This could be as often as every day or as infrequent as every month. Since online processing updates continuously, managers can run an inventory report any day at any time and have accurate up-to-date information.
REAL TIME PROCESS
Real-time data processing is the execution of data in a short time period, providing near-instantaneous output. The processing is done as the data is inputted, so it needs a continuous stream of input data in order to provide a continuous output. Good examples of real-time data processing systems are bank ATMs, traffic control systems and modern computer systems such as the PC and mobile devices. In contrast, a batch data processing system collects data and then processes all the data in bulk in a later time, which also means output is received at a later time.
Real-time data processing is also known as stream processing.
A real-time data processing system is able to take input of rapidly changing data and then provide output near instantaneously so that change over time is readily seen in such a system. For example, a radar system depends on a continuous flow of input data which is processed by a computer to reveal the location of various aircraft flying within the range of the radar and then display it on a screen so that anyone looking at the screen can know the actual location of an aircraft at that moment.
Real-time data processing is also called stream processing because of the continuous stream of input data required to yield output for that moment. Good examples are e-commerce order processing, online booking and reservations, and credit card real-time fraud detection. The biggest benefit of real-time data processing is instantaneous results from input data that ensures everything is up to date. Batch processing, on the other hand, means that data is no longer timely.