What is the Data Processing Cycle?

The data processing cycle is the set of operations used to transform data into useful information. The intent of this processing is to create actionable information that can be used to enhance a business. This cycle involves the following steps:

Data collection. This can involve the manual collection of data, or collection through a variety of automated data collection options.
Data preparation. This step requires you to configure data in a format suitable for data entry. It also involves error checking, usually through the use of filters in the data entry screen that automatically flag errors as they are made.
Data entry. There are several possible ways to enter data into the underlying system, and may involve manual data entry, scanning, machine encoding, and so forth.
Data processing. Once the data is input into the system, one or more programs will process the data in order to extract whatever information is being targeted.
Information transmission. The resulting information is sent to the user, typically via screen or printed report, so that it can be acted upon.
Information storage. The input data and output information may be stored for future use, though this is not always the case.

When data processing is to be conducted on a repetitive basis, it is more cost-effective to install controls over the process, thereby weeding out errors that might otherwise yield incorrect output information.