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Data processing deals with how data is organized & processed in the computer.


  • Data is a collection of facts & figures, which can be processed to produce information.
  • Data are the facts relating to an activity in a given environment. 

The activity can be Accounting, Inventory control, etc.  Environment can be business, scientific, education, etc.


  • In an educational environment, when students sit for exams, the grades obtained represent the data to be processed by the computer.  In this case, data can be Names of students & Marks obtained.
  • In a business environment, data can be the No. of Hours worked, names of employees, Stock

Data can also be described as Raw data, if they are not yet processed, i.e. if they do not convey particular meaning to a given activity within any given environment.

It therefore means that, Data are unprocessed information consisting of details relating to business transactions.  For example, in a Payroll system, data are employee’s names, basic salary, department number, marital status, etc.


  • The collection, manipulation & distribution of data (i.e.) letters, numbers & graphic symbols, to achieve certain objectives. 

The processing may involve calculations, comparisons, decision-making and/or any other logic to produce the required result.

  • The activity of manipulating the raw facts to generate a set of meaningful data (described as Information), which is able to convey some meaning.
  • Those activities, which are concerned with the systematic recording, arranging, filing, processing, and dissemination of facts relating to the physical events occurring in a business.

Data processing is a very important activity in any organization of any size or nature because it generates information for decision-making.

If the data processing uses complicated processing tools or aids, e.g. the computer, it is described as Electronic Data Processing (EDP).


  • Information is data, which is summarized and processed in the way you want it, so that it is useful in your work.
  • Information is an assembly of meaningful data items.

The information in Payroll activity includes; Net pay, Total Tax deductions, etc.  In Stock Control, the information generated includes; Closing stock, Total cost of the items, Purchases, Sales, etc.

The information is obtained by applying some processing procedures onto the raw data being input.  For example, to get the Net pay in a Payroll activity, the procedure would be;

Net pay = (Basic salary + Allowances + Overtime, if any) – Taxes.

Information is the end product of data processing available at the right place, the right time and in the right form.

The information generated by the data processing activities is very important in the working strategies of any organization, because it is used by the organization to make decisions. 

Characteristics/ Features of good Information.

It should: –

  • Have and serve a purpose.
  • Be relevant to its purpose.
  • Be complete, accurate, and comprehensive.
  • Have been obtained from a reliable source.
  • Be communicated to the right person and in the right time (i.e. it should be timely).
  • Be clear and understandable by the user.
  • The user must have confidence in it.

Relationship between Data, Data Processing, and Information.

Data are the facts which relate to any particular activity, and do not have any specific meaning. 

Information is data with a definite meaning.

Data processing is the process, which transforms data into information.

In a Manufacturing industry, data may be compared to raw materials and Information to finished products.  Just as raw materials are transformed into finished products, raw data are transformed into information.

In order to generate information from data items, a set of processing activities have to be performed on the data items in a specific sequence depending on the desired final result.  Performing these processes is known as Data processing.

Raw data   Data processing   Information  



  1. Define the terms:
    1. Data.
    1. Information.
    1. Data processing. 
      1. Distinguish between the following terms:
    1. Data.
    1. Data processing.
    1. Information
  2. Using examples, explain the difference between ‘Data’ and ‘Information’.


Data processing cycle refers to the various stages involved in converting data into information.

Basic stages in the Data processing cycle.

There are 5 primary elements/functions of data processing system.  They include; Input, Processing, Storage, Output, and Control.

ORIGINATION OF DATA Data originates from Source documents, Time cards, Sales orders, Purchase orders, Invoices, etc  


Exercise I.

  1. (a). What is a Data Processing cycle.

(b). State and describe the stages involved in data processing cycle.

  • Draw and label a clear flow diagram of the stages involved in a data processing cycle.
  • List the various steps in the data processing cycle and briefly describe what happens at each stage.


Data Collection is the process involved in getting the data from the point of its origin to the computer in a form suitable for processing.

Note.  Data collection starts at the source of the raw data & ends when valid data is within the computer in a form ready for processing.


Data Entry:

Nowadays, most end-users input data to the computer using Keyboards on PCs, Workstations, or Terminals.

Data can originate in many forms, but the computer can only accept it in a machine-sensible form. 

Problems of Data Entry.

  1. The data to be processed by the computer must be presented in a Machine-sensible form (i.e. in the language of a particular input device).

Note that most of the data originates in a form that is not machine-sensible.  Therefore, the data must undergo the process of Transcription before it is suitable for input to the computer.

  • The process of Data collection involves getting the original data to the “processing center”, transcribing it, sometimes converting it from one medium to another, and finally getting it into the computer.  This process involves a great number of people, many machines, and much expense.

Data Capture:

Data Capture is the process of obtaining data in a computer-sensible form at the point of origin.

Obtaining of data in a computer-sensible form helps to avoid many of the problems of data entry. 

The captured data may be stored in some intermediate form for later entry into the main computer in the required form.  If data is input directly into the computer at its point of origin, the data entry is said to be On-Line.  In addition, if the method of direct input is a terminal or workstation, the method of input is known as Direct Data Entry (DDE).


The process of data collection may involve any number of the following stages depending on the methods used.

  1. Data Creation.

This involves 2 basic alternatives:

  • Source documents

Source document is the original document used to record data and/or instructions.

Most of the data is in form of a manually scribed or typewritten documents, i.e. the data is on clerically prepared source documents.

  • Data capture.  This involves preparing the source document itself in a machine-sensible form so that it may be used as input to the computer without the need for transcription.  The prepared source document is then read directly by a suitable device, e.g. a Bar code reader.

Data capture eliminates the need for transcription.

Note.  Themethod and medium adopted for data creation will depend on factors such as Cost, Type of application, etc.

  • Data Transmission.

This will depend on the method & medium of data collection involved/adopted. 

If the computer is located at a central point, the documents will be physically “transmitted”, i.e. by the Post office or a Courier to the central point.

The data can also be transmitted by means of Telephone lines to the central computer.  In this case, no source documents would be involved in the transmission process.

  • Data Preparation.

Data Preparation is the term given to the transcription of data from the source document to a machine-sensible medium.

There are 2 parts involved in the data preparation:

  • The original transcription itself, and
  • The Verification process that follows.
  • Conversion of data from one medium to another.

Data is prepared in a particular medium & converted to another medium for faster input into the computer.

For example; data might be prepared on Diskette, or captured onto Cassette, and then converted to magnetic Tape for input.

The conversion will be done on a computer that is separate from the one for which the data is intended.

  • Input.

The data, now in magnetic form, is put into the computer and subjected to validity checks by a computer program before being used for processing.

  • Sorting.

This stage is required to re-arrange the data into the sequence required for processing. 

Sorting is necessary for efficient processing of sequentially organized data in many commercial and financial applications.

  • Control.

In all the stages of data collection, control must be established and applied where necessary.  In other words, Control is usually applied through out the whole process of data collection.


The following are alternatives that can be used to collect data:

  • Use of Data Capture devices such as Scanners, Kimball Tags, Point-of-Sale systems, Bar-code readers & Magnetic strip readers.


The System designer must guard against the following types of errors:

  • Transcription (copying) errors.
  • Missing source documents.
  • Source documents whose entries are omitted, illegal and suspicious/doubtful.
  • Program faults (errors).
  • Machine hardware faults.

Note.  Machine hardware faults are less common because modern computers have self-checking facilities & usually signal any internal failure.

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