What Is Batch Processing?
Batch processing is the processing of transactions in a group or batch. No user interaction is required once batch processing is underway. This differentiates batch processing from transaction processing, which involves processing transactions one at a time and requires user interaction.
While batch processing can be carried out at any time, it's particularly suited to end-of-cycle processing, such as for processing a bank's reports at the end of a day or generating monthly or biweekly payrolls.
Key Takeaways
- Batch processing is a technique for automating and processing multiple transactions as a single group.
- Batch processing helps in handling tasks like payroll, end-of-month reconciliation, or settling trades overnight.
- Batch processing systems can save money and labor over time, but they may be costly to design and implement up-front.
Understanding Batch Processing
For large enterprises, batch processing became a normal way of data compilation, organization, and report generation around the middle of the 20th century with the introduction of the mainframe computer. The early mechanics of processing a batch involved feeding a computer a stack of punched cards that held commands, or directions, for the computer to follow.Herman Hollerith (1860-1929) is credited with developing the punch card around 1890 when he was employed as a statistician for the U.S. Census Bureau. It was this punch card that became the foundation for widespread batch processing around 50 years later.
Batch processing jobs are run at regularly scheduled times (e.g., overnight) or on an as-needed basis. As an example, bills for utilities and other services received by consumers are typically generated by batch processing each month. Batch processing is beneficial because it is a cost-effective means of handling large amounts of data at once. One caveat is that the inputs for the processing must be correct or else the results of the whole batch will be faulty, wasting time and money.
History of Batch Processing
A defining characteristic of batch processing is minimal human intervention, with few, if any, manual processes required. This is part of what makes it so efficient, though it wasn't always that way.Batch processing started with punch cards, which were tabulated into instructions for computers. Entire decks, or batches, of cards, would be processed at one time. This system, created by Herman Hollerith, goes as far back as 1890. Hollerith developed it to be used to process data from the U.S. Census. Punched manually, the card was fed into and read by an electromechanical device. Hollerith patented his invention as the "Electronic Tabulating Machine", and later joined a group of other inventors and investors to form the Computing-Tabulating-Recording Company (CTR), which would eventually become International Business Machines, or IBM.
Unlike earlier iterations, the functions of modern batch processing are completely automated to meet certain conditions of time. While some tasks are done immediately, others are conducted in real-time and monitored on a regular basis. If there are any problems with the process, the system notifies the appropriate personnel through exception-based management alerts. This automation provides managers time for other duties.
The software identifies exceptions through a system of monitors and dependencies, which causes the batch processing to start. Exceptions may include online customer orders or a request from the system for new supplies.Advantages of Batch Processing
Faster and Lower Cost
Operational costs such as labor and equipment are cut with batch processing because it cuts the need for human oversight physical hardware like computers. And because batch processing is designed to be quick, efficient and error-free, personnel can focus on other duties.