Data processing is the collection and manipulation of digital data to produce meaningful information. Data processing is a form of ''information processing'', which is the modification (processing) of information in any manner detectable by an observer.Data processing is distinct from ''

word processing A word processor (WP) is a device or computer program that provides for input, editing, formatting, and output of text, often with some additional features. Word processor (electronic device), Early word processors were stand-alone devices dedicate ...

'', which is manipulation of text specifically rather than data generally.

Functions

Data processing may involve various processes, including: * Validation – Ensuring that supplied data is correct and relevant. *

Sorting Sorting refers to ordering data in an increasing or decreasing manner according to some linear relationship among the data items. # ordering: arranging items in a sequence ordered by some criterion; # categorizing: grouping items with similar p ...

– "arranging items in some sequence and/or in different sets." * Summarization (statistical) or (automatic) – reducing detailed data to its main points. * Aggregation – combining multiple pieces of data. *

Analysis Analysis (: analyses) is the process of breaking a complex topic or substance into smaller parts in order to gain a better understanding of it. The technique has been applied in the study of mathematics and logic since before Aristotle (38 ...

– the "collection,

organization An organization or organisation (English in the Commonwealth of Nations, Commonwealth English; American and British English spelling differences#-ise, -ize (-isation, -ization), see spelling differences) is an legal entity, entity—such as ...

, analysis, interpretation and presentation of data." * Reporting – list detail or summary data or computed information. *

Classification Classification is the activity of assigning objects to some pre-existing classes or categories. This is distinct from the task of establishing the classes themselves (for example through cluster analysis). Examples include diagnostic tests, identif ...

– separation of data into various categories.

History

The

United States Census Bureau The United States Census Bureau, officially the Bureau of the Census, is a principal agency of the Federal statistical system, U.S. federal statistical system, responsible for producing data about the American people and American economy, econ ...

history illustrates the evolution of data processing from manual through electronic procedures.

Manual data processing

Although widespread use of the term ''data processing'' dates only from the 1950s, data processing functions have been performed manually for millennia. For example,

bookkeeping Bookkeeping is the recording of financial transactions, and is part of the process of accounting in business and other organizations. It involves preparing source documents for all transactions, operations, and other events of a business. T ...

involves functions such as posting transactions and producing reports like the

balance sheet In financial accounting, a balance sheet (also known as statement of financial position or statement of financial condition) is a summary of the financial balances of an individual or organization, whether it be a sole proprietorship, a business ...

and the cash flow statement. Completely manual methods were augmented by the application of mechanical or electronic calculators. A person whose job was to perform calculations manually or using a calculator was called a "

computer A computer is a machine that can be Computer programming, programmed to automatically Execution (computing), carry out sequences of arithmetic or logical operations (''computation''). Modern digital electronic computers can perform generic set ...

." The 1890 United States census schedule was the first to gather data by individual rather than

household A household consists of one or more persons who live in the same dwelling. It may be of a single family or another type of person group. The household is the basic unit of analysis in many social, microeconomic and government models, and is im ...

. A number of questions could be answered by making a check in the appropriate box on the form. From 1850 to 1880 the Census Bureau employed "a system of tallying, which, by reason of the increasing number of combinations of classifications required, became increasingly complex. Only a limited number of combinations could be recorded in one tally, so it was necessary to handle the schedules 5 or 6 times, for as many independent tallies." "It took over 7 years to publish the results of the 1880 census" using manual processing methods.

Automatic data processing

The term '' automatic data processing'' was applied to operations performed by means of unit record equipment, such as Herman Hollerith's application of

punched card A punched card (also punch card or punched-card) is a stiff paper-based medium used to store digital information via the presence or absence of holes in predefined positions. Developed over the 18th to 20th centuries, punched cards were widel ...

equipment for the 1890 United States census. "Using Hollerith's punchcard equipment, the Census Office was able to complete tabulating most of the 1890 census data in 2 to 3 years, compared with 7 to 8 years for the 1880 census. It is estimated that using Hollerith's system saved some $5 million in processing costs" in 1890 dollars even though there were twice as many questions as in 1880.

Computerized data processing

Computerized data processing, or electronic data processing represents a later development, with a computer used instead of several independent pieces of equipment. The Census Bureau first made limited use of electronic computers for the 1950 United States census, using a

UNIVAC I The UNIVAC I (Universal Automatic Computer I) was the first general-purpose electronic digital computer design for business application produced in the United States. It was designed principally by J. Presper Eckert and John Mauchly, the invento ...

system, delivered in 1952.

Other developments

The term ''data processing'' has mostly been subsumed by the more general term ''

information technology Information technology (IT) is a set of related fields within information and communications technology (ICT), that encompass computer systems, software, programming languages, data processing, data and information processing, and storage. Inf ...

'' (IT). The older term "data processing" is suggestive of older technologies. For example, in 1996 the '' Data Processing Management Association'' (DPMA) changed its name to the ''Association of Information Technology Professionals''. Nevertheless, the terms are approximately synonymous.

Applications

Commercial data processing

Commercial data processing involves a large volume of input data, relatively few computational operations, and a large volume of output. For example, an insurance company needs to keep records on tens or hundreds of thousands of policies, print and mail bills, and receive and post payments.

Data analysis

In science and engineering, the terms ''data processing'' and ''

information system An information system (IS) is a formal, sociotechnical, organizational system designed to collect, process, Information Processing and Management, store, and information distribution, distribute information. From a sociotechnical perspective, info ...

s'' are considered too broad, and the term ''data processing'' is typically used for the initial stage followed by a

data analysis Data analysis is the process of inspecting, Data cleansing, cleansing, Data transformation, transforming, and Data modeling, modeling data with the goal of discovering useful information, informing conclusions, and supporting decision-making. Da ...

in the second stage of the overall data handling. Data analysis uses specialized

algorithm In mathematics and computer science, an algorithm () is a finite sequence of Rigour#Mathematics, mathematically rigorous instructions, typically used to solve a class of specific Computational problem, problems or to perform a computation. Algo ...

s and

statistical Statistics (from German language, German: ', "description of a State (polity), state, a country") is the discipline that concerns the collection, organization, analysis, interpretation, and presentation of data. In applying statistics to a s ...

calculations that are less often observed in a typical general business environment. For data analysis, software suites like SPSS or SAS, or their free counterparts such as DAP, gretl, or PSPP are often used. These tools are usually helpful for processing various huge data sets, as they are able to handle enormous amount of statistical analysis.

Systems

A data processing system is a combination of

machine A machine is a physical system that uses power to apply forces and control movement to perform an action. The term is commonly applied to artificial devices, such as those employing engines or motors, but also to natural biological macromol ...

s, people, and processes that for a set of inputs produces a defined set of outputs. The inputs and outputs are interpreted as

data Data ( , ) are a collection of discrete or continuous values that convey information, describing the quantity, quality, fact, statistics, other basic units of meaning, or simply sequences of symbols that may be further interpreted for ...

fact A fact is a truth, true data, datum about one or more aspects of a circumstance. Standard reference works are often used to Fact-checking, check facts. Science, Scientific facts are verified by repeatable careful observation or measurement by ...

information Information is an Abstraction, abstract concept that refers to something which has the power Communication, to inform. At the most fundamental level, it pertains to the Interpretation (philosophy), interpretation (perhaps Interpretation (log ...

etc. depending on the interpreter's relation to the system. A term commonly used synonymously with ''data or storage (codes) processing system'' is ''

''. With regard particularly to electronic data processing, the corresponding concept is referred to as electronic data processing system.

Examples

Simple example

A very simple example of a data processing system is the process of maintaining a check register. Transactions— checks and deposits— are recorded as they occur and the transactions are summarized to determine a current balance. Monthly the data recorded in the register is reconciled with a hopefully identical list of transactions processed by the bank. A more sophisticated record keeping system might further identify the transactions— for example deposits by source or checks by type, such as charitable contributions. This information might be used to obtain information like the total of all contributions for the year. The important thing about this example is that it is a ''system'', in which, all transactions are recorded consistently, and the same method of bank reconciliation is used each time.

Real-world example

This is a flowchart of a data processing system combining manual and computerized processing to handle accounts receivable, billing, and general ledger