After reading this article you will learn about:- 1. Meaning of Data Processing 2. Stages in Data Processing 3. Advantages.

Meaning of Data Processing:

The word ‘data’ is the plural of the word ‘datum’ which means ‘fact’. Thus, data means facts. These may be numeric, textual, pictorial or even vocal. Facts are represented by symbols. For example, numeric data can be represented by digits, textual data can be expressed by using alphabets, digits and punctuation symbols. Processing of data useful in decision-making process.

For example, data regarding the income of a company in itself would not indicate its profitability unless it is related to some other factor, say, the amount of capital employed. If we divide the total income by the amount of capital employed, we will get the profitability factor.

Thus, by performing the simple arithmetic operation on these two data, we can get information about the profitability of the company. Therefore information refers to processed data placed in a meaningful context for the user.


The data may be transformed into tables or reports. The transformation of data into any desired form is known as data processing. When data processing is done by electronic machine, it is known as electronic data processing. Computers are very popular for electronic data processing.

Electronic data processing involves:

(a) Collection of data from various sources;

(b) Reorganisation of generated data by grouping, calculating, reforming, etc.; and


(c) Preparation of desired reports, tables, etc. for meaningful analysis and control.

Stages in Data Processing:

Data processing involves the following activities:

(a) Collection of Data:

The collection of required data is the first step in data processing. The required data may be initially recorded on paper and then entered on some medium like magnetic tapes or disks so that the computer can obtain the data quickly from them.


(b) Manipulation of Data:

Manipulation of data may involve classification of data, arrangement of data in some order, performing arithmetic operations and summarizing data.

(c) Managing Information:

Once the data have been manipulated, these may be either stored for future reference or communicated to the user. Thus, a computer may be defined as an electronic machine that can acquire, store, manipulate, reproduce and communicate data at a very high speed, maintaining a high level of accuracy.

Advantages of Data Processing:


The following advantages are achieved by electronic data processing:

(i) Electronic data processing (EDP) is many times faster than manual methods of processing.

(ii) It minimises errors and brings about accuracy.

(iii) It economises the administrative operations.


(iv) It relieves monotony of manual calculations.

(v) It leads to an integrated approach for various systems in operation in the organisation.