Guide

Benefits of databases

What is a database?

A database is a large collection of data typically stored in computer systems. This data is organised in a way that makes it possible to quickly find and manage desired pieces of information.

A very simple example of a database could be:

  • a list of names in alphabetical order
  • an ascending list of numeric stock codes

You can store information in the database in different ways, known as database models.

The relational database model is the most widely used database model. It uses relations and sets to store the data. In practice, this looks like data is organised in tables. To access information from a database, you typically need a database management system.

What is a database management system?

A database management system is a software designed to allow you to create, update, analyse, retrieve and store data in a computer system. There are many different types of database systems.

Database use in business

You can use business databases to help organise and manage your customers, your business inventory and employees. Databases can streamline your:

  • customer management processes
  • inventory tracking
  • employee database
  • productivity reporting
  • financial reporting
  • data analysis

The secret to successfully using database tools and technology is the way in which information is structured to enable efficient processing, and to help you store and manage data.

Manual vs computerised database systems

Manual filing systems can have several drawbacks that make them inefficient. For example, if your business uses a simple card file index of customer information, it will probably depend on the consistent use to be effective. If all of the cards have the customer's surname in the top left-hand corner, then they may be easy to put in alphabetical order. However, if some cards have the postcode in this position instead, it becomes more complicated.

Single-card file indexes can be simple, but it is more complex to cross-reference information held in two separate files. The relational database management system makes use of common 'keys' to tie related information together. For example, you could use a customer ID number to identify an individual customer in a large list of customers or to link a customer with an order for specific goods.

Find out which is the best database for your business.