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

What is Electronic Data Processing (EDP)

This is a modern technique to process data. The data is processed through a computer; Data and set of instructions are given to the computer as input, and the computer automatically processes the data according to the given set of instructions. The computer is also known as Electronic Data Processing Machine. Electronic Data Processing is the fastest and best available method with highest reliability and accuracy. Technology used is the latest as this method uses computers. Manpower required is minimal. Processing can be done through various programs and predefined set of rules. Processing of large amount of data with high accuracy is almost impossible which makes it best among the available types of data processing. For example, in a computerized education environment results of students are prepared through a computer; in banks, accounts of customers are maintained (or processed) through computers, etc.

EDP is the practice of processing, storing, retrieving, sharing and maintaining information electronically. There are many different ways to process data. The most common way of data processing is the machine learning technique called classification. It can be used for identifying issues in your data, finding patterns, and predicting outcomes. EDPs are computerized data processing systems that automate the collection, storage, manipulation, and retrieval of data. Text mining involves the process of categorizing, representing, and analysing huge amounts of text in order to derive useful information. The benefits of electronic data processing are numerous. Electronic data processing helps to reduce the development and maintenance cost of most business operations.

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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 and types 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

Electronic Data Processing (EDP) is the process of recording information and processing it for financial, legal, or other business purposes. EDP statistics are used by businesses to assess their performance and make decisions about growth.
There are many different methods of data processing. Data processing is the process of doing something with data, and there are many different ways to do it. The benefits of electronic data processing include the ability to: ensure reliable data; increase speed and efficiency of the organization; and reduce costs. Electronic data processing can be used to improve productivity, efficiency, and profitability by increasing the usefulness of information.

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.


With the rise of technology, more and more industries are relying on data to make decisions. Businesses in the health and wellness industry are no exception. Electronic data processing equipment is a broad category of computer hardware that combines input, processing, and output devices. In order to provide a complete solution for data processing, these machines are equipped with a wide range of peripherals, such as printers and scanners. Electronic data processing is the process of converting information into digital form. It is the number one direct job function for software developers in every industry. However, there are drawbacks to this type of work.

Electronic Data Processing (EDP) is one of the fastest growing industries in the world, and it’s great for job seekers. It’s a field where you can work anywhere at any time. Electronic data processing equipment is any device or software that performs one or more of the following functions: storing, retrieving, processing, transmitting, routing and transporting electronic data. There are two main drawbacks to EDPs, and one of them is the human interaction aspect. When you are processing electronic data, there is a lot of repetitive tasks that you need to do.

Electronic data processing equipment is a type of computerized equipment used in business, industry, and government. Electronic data processing equipment is used to make copies of documents, send and receive electronic mail (email), organize, maintain and manipulate documents by using computers. Electronic Data Processing has been around since the 1970s, and it’s used for everything from employee payroll to purchasing. Also known as EDP, it has been used in countless industries to streamline processes and improve productivity.

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