Difference between Electronic Data Processing (EDP) and Transaction Processing System (TPS)

Electronic Data Processing (EDP)

It describes the processing of data by a computer in an IT environment. It uses the computers to manipulate, record, classification and to summarize data. If someone asks what is electronic data processing, then EPD meaning can be described as the processing of data using electronic means such as computers, calculators, servers and other similar electronic equipment. A computer is the best example of an electronic data processing machine.

Advantages of EDP

Electronic Data Processing (EDP) is the digital management of databases, typically stored on a shared server and allow simultaneous access to all parties. There are several distinct advantages to employing EDP:

Reduced Labor. Duplication of effort and repeated entries due to mistakes in manual data entry are reduced or eliminated by EDP.
Economic. Once an Electronic Data Processing system is created and implemented, over time it reduced the costs of managing data by a significant margin.
Efficient. Summary documents and related materials such as invoices, reports, and statements can be automatically and quickly generated via EDP.
Speed. Information stored and managed via EDP can be retrieved almost instantly on a well-maintained internal network or even the Internet.

Transaction Processing System (TPS)

A transaction is a simple process that takes place during business operations. The transaction processing system (TPS) manages the business transactions of the client and therefore helps a company’s operations.

Transaction processing systems (TPS) process the company’s business transactions and thus support the operations of an enterprise. A TPS records a non-inquiry transaction itself, as well as all of its effects, in the database and produces documents relating to the transaction. TPS are necessary to conduct business in almost any organization today. TPSs bring data into the organizational databases, these systems are also a foundation on which management oriented information systems rest.

A transaction processing system is a computerized system that performs and records the daily routine transactions necessary to conduct business. Examples are sales order entry, hotel reservation systems, payroll, employee record keeping, and shipping.