What is Data Processing?

Used specifically, data processing may refer to a discrete step in the information processing cycle in which data is acquired, entered, validated, processed, stored, and output, either in response to queries or in the form of routine reports; the processing is the step that organizes the information in order to form the desired output. Used in a more general sense, data processing may also refer to the act of recording or otherwise handling one or more sets of data, and is often performed with the use of computers. The word data is commonly used to mean “information” and often suggests large amounts of information in a standardized format. Data may consist of letters, numbers, equations, dates, images, and other material, but does not usually include entire words.

One of the key points about the term data processing is that it is used by some synonymously with the term information processing, while others make a distinction between the two. In most cases, however, the word data is used to mean the original form of the output, while information is meant to define data that has been organized or altered in some way. The Bureau of Labor Statistics (BLS) in their publication Occupational Outlook Handbook, 2010–2011 Edition, have an entry for “Data Entry and Information Processing Workers.” Here, a distinction is being made between “data,” which is raw material, and “information,” which has undergone some processing: the two are being treated as distinct, with data preceding information.

In computing, data processing can be used to refer to the use of a software application to organize some type of input data in order to create a desired output. The result might be anything from a multimedia file to an image, or a text file. Usually, entering words as one thinks of them is not considered as data entry, so writing a story using a word processor would not qualify as a true form of processing data; however, entering receipts and expenditures for the month in a spreadsheet program and printing a report would.

Programs designed to process data are plentiful, and their capabilities range from basic to very in-depth. One example of a program that can easily process data is Microsoft Excel®, which is essentially a spreadsheet that can be used to organize data, especially mathematical equations. The program can be used for very basic processing or, if the user is familiar with the program, it can also be used for more in-depth outputs. Other types of processing programs include programs used to organize accounting data to determine losses or gains, seismic data used to predict earthquakes, and business statistics to help businesses run more efficiently, just to name a few.