What Is a Data Processing System?

By Contributing Writer

Updated July 21, 2017

Data processing systems are used to process raw data into information.
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A data processing system takes raw data and, through the power of computer automation, produces information that a set of program applications has validated. Information includes text, arithmetic calculations, formulas and various other types of information and data based on the computer system. A data processing system is also called an automated data processing (ADP) unit or an electronic data processing (EDP) unit.


The first data processing system was developed by IBM. The IBM 701 Data Processing Machine was designed to handle the concept of multitasking, which brought the power of automation to small businesses and organizations. According to MIS magazine, the 701 opened the door for the concept of management information systems and specialized software packages for various industries.


In simplistic terms, a data processing system uses a software application to accept input from a user to create a form of output. Output is generated on devices classified as peripherals. Peripherals are printers, external media storage devices, monitors, hard drives, and disk and tape systems and, currently, flash disk drives. Data processing systems in large organizations can consist of a diverse group of computers processing information at the same time. Data processing systems allow users to multitask or operate two software applications during the same computer session.


There are several benefits of a data processing system. The number one benefit is speed. A data processing system can process data measured in billionths and trillionths of a second. A data processing system can carry out a sequence of program instructions without human interference or interaction. Instructions from program implementation are stored in ROM (read only memory) and can be accessed by the system to process a particular program. Another benefit is the storage capacity of a data processing unit, which can store thousands of files and is only limited by the size of the storage disk inside the unit.

Career Opportunities

When data processing became a vital element to business and government organization, it provided jobs for individuals to maintain the data system. As the technology in data processing evolved, so did the demand for data processing specialists. Today, data processing has evolved into bigger, faster and more complex systems.

Future of Data Processing

The future of data processing has evolved to the Internet. Companies can set up data modules on their website for employees and clients to input information and, through the website, receive results. The next wave of data processing will include text-to-disk entry of data over the Internet and remote processing of data from anywhere in the world. Also, the physical size of computers to process data is getting smaller.