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 is 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 bi-weekly payrolls.

BREAKING DOWN '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 seed for widespread batch processing around 50 years later.

Batch processing jobs are run on 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: The inputs for the processing must be correct or else the results of the whole batch will be faulty, which would cost time and money.

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