Electronic Data Processing (EDP) | Definition, Meaning, Benefits

What is Electronic Data Processing (EDP)

Electronic data processing is also known as EDP, a frequently used term for automatic information processing. It uses the computers to collect, 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 EDP system. Use of a data processing system ensures accurate and rapid data processing. Electronic processing is the fastest way to obtain processed data.

Electronic data processing offers various advantages over any other form as it is fast, accurate, reliable and flexible. Ecommerce industry, banking services, record keeping, transaction data processing and any company dealing with real time data processing uses electronic data processing. Any data processing system comprises 4 basic components, these include hardware, software, procedure & person.

Electronic Data Processing

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Methods of Electronic Data Processing

There are various methods of data processing but there are some very popular methods when it comes to automated data processing. These methods are widely adopted in almost every industry. EPD systems are widely used to meet various needs of companies which are engaged in data analysis. Depending on the nature of requirement such as data storage, processing methods, control principles, computer equipment, data analysis or data processing, some of the most popular methods of electronic data processing are explained below:

  • Time-sharing
  • Real-time processing
  • Online processing
  • Multiprocessing
  • Multitasking
  • Interactive processing
  • Batch processing
  • Distributed processing

Each type is described below in brief:

Time- Sharing: In this processing method, many nodes connected to a CPU accessed central computer. A multi-user processing system controls the time allocation to each user. Each user can allocate the time slice in a sequence of the Central Processing Unit. The user should complete the task during the assigned time slice. If the user cannot finish the task, then the user can complete the task during another allocated time slice.

Real-Time Processing: Providing accurate and up-to-date information is the primary aim of real-time processing. It is possible when the computer processes the incoming data. It will give the immediate response to what may happen. It would affect the upcoming events. Making a reservation for train and airline seats are the best example for real-time processing.

If the seats are reserved, then the reservation system updates the reservation file. The real-time processing is almost an immediate process to get the output of the information. This method saves the maximum time for getting output.

Online Processing: In this processing method, the data is processed instantly. A communication link helps to connect the computer to the data input unit directly. The data input may include a network terminal or online input device. Online processing is mostly used for information research and recording.

MultiprocessingMultiprocessing is processing of more than one task that uses the different processors at the same time of the same computer. It is possible in network servers and mainframes. In this process, a computer may consist of more than one independent CPU. This makes data processing much faster.

There is a possibility to make coordination in a multiprocessing system. In this process, the different processors share the same memory. The processor gets the information from a different part of one program or various programs.

Multitasking: It is an essential feature of data processing. Working with different processors at the same time is called multitasking. In this process, the various tasks share the same processing resource. The operating systems in the multitasking process are time-sharing systems.

Interactive Processing: This method includes three types of functions. The following are the types of function:

  1.    Peak detection
  2.    Integration
  3.    Quantitation

It is a simple way to work with the computer. This method of the process can compete for each other.

Batch Processing: Batch processing is a method of the process the organized data into divided groups. In this method, the processing data can be divided as a group over a required time period. The batch processing method allows the computer to perform different priorities for an interaction. This method is very unique and useful to process.

Distributed Processing: This method is usually used for remote workstations, since the remote workstations are connected to a big workstation. The customers get the better services from this process. In this process, the firms can distribute the use of geographical computers. The best example for this distributed processing method is ATMs. ATMs are connected to the banking system.

Elements of Electronic Data Processing

Hardware, Software, procedure, personnel are the basic elements. In the hardware section, scanners, data storage devices, barcode scanners, cash registers, personal computers, medical devices, servers, video and audio equipment are the elements of electronic data processing. In the software section, accounting software, data entry, scheduling software, analytics, and software are the elements of electronic data processing. In the procedure section, sorting, analysis, reporting, conversion, data collection, aggregation be the elements of EDP.

In personnel, the programmer uses the electronic data processing to create the components and spreadsheets. The data entry specialists use it to scan the barcodes. The importance of data processing is now understood by all the fields. Each industry now focuses on what works best for them and how to achieve greater profits. EDP systems are being used widely just as Management Information System.

Electronic Data Processing Analysis

Stages of Electronic Data Processing

A collection is the first stage of electronic data processing. It is a very crucial part. In an EDP system, this process ensures accurate data gathering. Census, sample survey, and administrative by-product are some types of data collection. Preparation is the second stage of electronic data processing. Preparation is used to analyse the data processing.

Input is the third stage. Data entry is done by the use of a scanner, keyboard, and digitizer. The fourth stage is processing. It has various methods. The last stage is storage. Every computer has the use to store the file.

What are the advantages of Electronic Data Processing?

  • Cost of managing data is reduced. It aids decision making and data storage.
  • Processing of data reduces paperwork and helps in reducing cost as the management of documents is costly.
  • Helps in document management, enables use of integrated process and integrated system.
  • Ability to search in a document saves time. In addition to this, it improves the internal and external collaboration.
  • The famous software product such as Ms. Office is using the electronic data processing concept. The EDP has the facility to reduce the duplication of effort, repeated entries and make decisions.
  • Provides effective control, increases data security, manages information assets and creates effective workflows.

Disadvantages of Electronic Data Processing

  • Electronic form of data is susceptible to hacking attempts. Increased cases of cyber crimes makes it important and essential to think about data security and access control. If the various devices of an information system are connected in a network, then any flaw or loophole in single part of the system might affect the whole network.
  • You might be required to keep data in encrypted form. This is particularly important when dealing with sensitive data and storing it in data centres since the data is transmitted over a network.

Examples of EDP: It is used in a telecom company to format bills and to calculate the usage-based charges. In schools, they use EDP to maintain student records. In supermarkets,  used for recording whereas hospitals use it to monitor the progress of patients.

Further, it is used for hotel reservations, learning institutions, in banks to monitor the transactions. In the departments such as police, cybercrime, and chemical the electronic data processing is used to note the entries. It enables larger organizations to collect the information and process the data. The electronic data processing can also be used as video and audio equipment. It can be used as a barcode scanner.

Also Read: Types of Management Information System, Data Processing Cycle, Information Processing CycleMethods and Types of Data Processing