What is OLTP (Online Transaction Processing)?

OLTP stands for Online Transaction Processing. OLTP is a type of processing to facilitate and manage the transactional applications for data entry and recovery. The software packages for OLTP are based on the client-server architecture as they are usually used by companies with a distributed computer network.

The term can be understood in the context of “computational transactions” or “database transactions”. It could be tried to understand in terms of business or commercial transactions. OLTP has also been used to refer to the transformation in which the system responds immediately to user requests. A bank ATM is an example of a commercial transaction processing application. OLTP technology is used in countless applications, such as electronic banking, order processing, electronic commerce, supermarkets or industry.

Online transaction processing increasingly requiring more resources for transactions that propagate over a network and that can integrate more than one company. For this reason, current software for OLTP systems uses client-server processing and intermediation software (middleware) that allows transactions to run on different platforms on a network. In large applications, the efficiency of the OLTP may depend on how sophisticated transaction management software (such as CICS on IBM platforms) is or what optimization tactics are used to facilitate a large number of concurrent updates that can occur in an OLTP oriented database. In the most demanding decentralized database systems, OLTP intermediation programs distribute transaction processing among several computers in a network. OLTP is often integrated into a service-oriented architecture or a Web service.

Advantages and Disadvantages of OLTP

Online transaction processing has two clear benefits: simplicity and efficiency. The reduction of documentation and obtaining forecasts for earning and expenses more quickly and accurately are examples of how OLTP makes things simpler for companies. It also provides a concrete basis for the stability of an organization because of timely updates. The simplicity allows the consumers the choice of the way they wish to pay, so it is much more attractive than making transactions. OLTP expands the consumer base for an organization.

OLTP is a great tool for any organization, although in its use there are some issues to think about as they can pose a problem: security and economic or time costs. One of the advantages of OLTP is also a possible problem. The worldwide availability that these systems offer companies makes their databases much more susceptible to intruders and hackers. In B2B transactions, companies must go offline to complete certain steps of some processes, causing buyers and suppliers to lose some of the efficiency benefits that the system provides. As simple as an OLTP system is, the simplest disturbance in the system has the potential to cause a lot of problems, which in turn can cause a waste of time and money. Another economic point is the possibility of failures in the server, this can cause delays in the service and even the loss of a large amount of important information. To eliminate this risk or, at least mitigate it, security mechanisms must be invested.