Data Processing as a Business Need

Electronic data processing is growing because it is capable of handling a vast amount of data efficiently and accurately. Following are the demands faced by business that create this need.

• Number of Transactions: The growth in size and number of business firms naturally increases the number of business transactions. The computer, with its high speed and capacity, can process thousands of records or business calculations per minute and with far greater efficiency than any previous method.
• Cost: Competitive pressure has made it essential for many firms to adopt computerized method of data processing. In the past sales could be written up on the longhand. Orders filled by hand, and the bills and records of the transactions, the cost of hand labor precludes this method.
• Accuracy: Another pressure on the business firm is the requirement of strict accuracy in many areas. The firm must take decisions, perform calculations, and plan production with precision. A business decision involving millions of dollars may be made based on a few pieces of data. Calculations themselves must be performed accurately.
• Speed: The pace of modern business necessities the fast flow of the data. Decision must often be made on short notice, or immediately following a transaction. For example, the stock market and import export industry rely heavily on prompt data processing. Computer can process data at speed unequaled by other means.
• Selectivity: Business people demand selectivity in the ways data are reported. The computer can record a collection of data into many different forms.One program can list the sales from the previous day activities in chronological order. With a few modification of the program, the computer can categorize the same list by type of merchandise sold, by salesperson, by amount or by location.
• Information: Good decision making is imperative in business and good decision require comprehensive and complete information. The information must often be related to previous experience. Many business managers rely heavily on ratios, cost comparisons and time comparisons.
• Record keeping: There is growing need to record transactions at the instant they occur, not hours or days later.
• Service: As business grow, it is harder to provide individualized customer service. This problem is alleviated and sometimes even eliminated, with the aid of high speed data processing equipment.
• Mechanization: It has been said " Machines should work and people should think. " Many business people believe that human resources should be applied to those tasks for which humans are uniquely qualified.