Benefits of databases
Databases are an essential tool in handling the digital processes in your business. They are key to storing, organising and analysing your business' critical data, such as staff and customer records, accounts, payroll, inventory, etc.
A database management system typically provides access to these different kinds of data, allowing you to create as well as manage large amounts of related information within a single software application.
This guide examines a number of important database concepts. It defines what is a database and describes the various types of database system available. It also looks at how businesses can use database technology to streamline their processes, increase efficiencies and reduce costs.
Before considering a specific product, it's important to understand the pros and cons of the different database types, including custom database systems development. This guide offers tips to help you decide which is the best database for your business.
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.
Find out about the benefits of database development.
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.
Types of database system
Understand the different types of database systems and the differences in database relationships, how they work and how your business can use them
A database management system is a software package for creating and managing databases. Many different types of database systems exist based on how they manage the database structure.
Two types of database structure
Databases typically have one of two basic forms:
- single-file or flat file database
- multi-file relational or structured database
A flat file database stores data in a plain text file, with each line of text typically holding one record. Delimiters such as commas or tabs separate fields. A flat file database uses a simple structure and, unlike a relational database, cannot contain multiple tables and relations. Read more about flat file databases.
A relational database contains multiple tables of data with rows and columns that relate to each other through special key fields. These databases are more flexible than flat file structures, and provide functionality for reading, creating, updating, and deleting data. Relational databases use Structured Query Language (SQL) - a standard user application that provides an easy programming interface for database interaction. Read more about relational databases.
Types of relationships in a database
Four types of relationships exist in relational database design:
- one to one - where one table record relates to another record in another table
- one to many - where one table record relates to multiple records in another table
- many to one - where more than one table record relates to another table record
- many to many - where multiple records relate to more than one record in another table
These relations form functional dependencies within the database. Some common examples of relational databases include MySQL, Microsoft SQL Server, Oracle, etc.
Four types of database management systems
A relational database management system is one of four common types of systems you can use to manage your business data. The other three include:
- hierarchical database systems
- network database systems
- object-oriented database systems
Hierarchical database model resembles a tree structure, similar to a folder architecture in your computer system. The relationships between records are pre-defined in a one to one manner, between 'parent and child' nodes. They require the user to pass a hierarchy in order to access needed data. Due to limitations, such databases may be confined to specific uses. Discover more about hierarchical databases.
Network database models also have a hierarchical structure. However, instead of using a single-parent tree hierarchy, this model supports many to many relationships, as child tables can have more than one parent. See more on network databases.
Finally, in object-oriented databases, the information is represented as objects, with different types of relationships possible between two or more objects. Such databases use an object-oriented programming language for development. Find out more about object-oriented databases.
NoSQL or non-relational databases
A popular alternative to relational databases, NoSQL databases take a variety of forms and allow you to store and manipulate large amounts of unstructured and semi-structured data. Examples include key-value stores, document stores and graph databases. Read more about NoSQL databases.
Which database is right for you?
Businesses with simple database requirements often use standard office tools, such as spreadsheets. However, if you use large amounts of data or have complex business needs, you may need to consider more capable database systems that offer better functionality. Find tips to help you decide which is the best database for your business.
Database systems development
Databases can benefit any business that needs to process large amounts of information. Many database products are actually tools that you can use to develop specific applications, such as:
- sales ordering systems
- ticket reservation systems
- inventory management
Database development tools
Unlike conventional programming languages, database development tools make maintaining and managing structured data files easier. They also impose strict design parameters on developers to ensure that data retains its integrity and accuracy.
For example, most database development systems operate on a commit basis. This means that any changes to data are made in such a way that the data will not be corrupted if the system fails. Similarly, professional database development tools allow multiple users to view and use data simultaneously, which greatly improves the efficiency of these systems.
Advantages of database development
The primary advantage of using a database development system is that you can tailor your applications to meet your precise requirements. This avoids accepting any compromises by using 'off-the-shelf' packages. Specifying your requirements is a specialist task, so you may need to consult a professional system developer. Read more about the benefits of database development.
Accessing and manipulating databases
Most modern database development systems use Structured Query Language (SQL) processing. This allows you to analyse the data and generate reports in a wide variety of different ways. You can use SQL to make specific enquiries of your data. You can then generate a report that shows a specific selection - eg all customers who have ordered products on a Friday afternoon in order to gauge the demand for weekend deliveries.
Read more about the SQL and other types of database system.
SQL requires expertise to be used effectively - you may need to consult a professional systems developer. Alternatively, the supplier of your database software may offer consultancy as an add-on. Find out how to choose a database supplier.
Benefits of database development
Main benefits of database management systems, and the importance of developing a database for your business
Using database technology to gather, store and process information about your customers, suppliers and even competitors can give your business a distinct advantage.
Developing a database for your business can help you:
- reduce the amount of time you spend managing data
- analyse data in a variety of ways
- promote a disciplined approach to data management
- turn disparate information into a valuable resource
- improve the quality and consistency of information
Many businesses do not have the time or resources available to gather and process large quantities of information. This may lead to a lack of information about:
- how their business is performing
- how profitable their product lines are
- if customers are making repeat purchases
If you're not sure how a database could help your business, see 5 reasons why your business needs a good database.
Role of data in your business
A sophisticated relational database management system can help you store a vast amount of data which, as it builds up over time, can become increasingly useful and valuable. For example:
- historical data can show business trends
- sales records can identify valuable customers
In addition, the disciplines required to gather, enter and process such data can help to ensure that your business runs in a regulated and properly managed way.
Read more about relational databases and the different types of database systems.
It's not always obvious what information is potentially valuable, so you should try to gather as much data as possible (bearing in mind your data protection responsibilities if you're collecting personal data).
Databases and data protection
Your gathering, storage and processing of customers' personal data must comply with data protection legislation, including the requirement not to collect or process excessive or unnecessary personal data. Under the GDPR, you must ensure the personal data you are processing is:
- adequate - sufficient to properly fulfil your stated purpose
- relevant - has a rational link to that purpose
- limited to what is necessary - you do not hold more than you need for that purpose
See how to comply with the General Data Protection Regulation (GDPR).
Disadvantages of database development
One of the main benefits of a relational database management system (RDBMS) technology is the ability to build applications that are tailored to your business requirements. However, the development of RDBMS applications can be expensive and time-consuming.
Developing in-house applications: pros and cons
You can develop your own applications in-house. However, the skills required are often quite extensive. You may not have the necessary skills available to undertake your own systems development and may have to consider employing outside help.
The basic tasks needed to build an RDBMS solution include:
- initial consultancy
- analysis of requirements
- system specification
- database design
- ongoing maintenance
Building an RDBMS solution is likely to take time and, because there are so many steps involved, the costs can escalate. You should weigh these costs against the benefits of database development.
You should also consider the risk to your business operations if the RDBMS solution fails to meet your specific requirements. The risks are especially high if you need this solution for your core day-to-day business operations.
Avoid investing in a system which looks good on paper but which is totally unproven in practice. You could make use of an off-the-shelf solution to provide the core functions of your system - for example, the standard financial accounting needs - and add in extra modules for specific functions you need, such as sales order processing or supply chain management. This way you are minimising the overall risk to your business.
Find out more about IT risk management.
Which is the best database for your business?
There are several types of business databases. Choosing the right one for your business isn't always straightforward.
To find the right type of database for your business, you will need to consider:
- the type of data you will use, eg numeric, addresses, multimedia, etc
- the structure or model you want the data to have
- where you want to store it
- how you plan to manage it
- what you intend to use it for
- how consistent your data will be
- what querying mechanism you require
Businesses in specific industries - eg manufacturing, publishing or insurance - will have database solutions specifically targeted at their precise needs and requirements.
It is worth seeking out products that could meet the particular needs of your business sector. Ask your trade association or trading partners for recommendations. You can also use the internet to research popular database products.
Select the right type of business database
When choosing a database system for your business, you should ask yourself the following questions:
- How will you use your information? If you have a small amount of information that requires updating or filtering of certain types of data, then a standard spreadsheet package is likely to be sufficient for your needs. See computer software for business.
- How many people will share and access the information? While a spreadsheet may be viewed by several people at once, generally only one person at a time can make amendments to it. If several people require access and the ability to amend records at the same time you should consider a relational database management system (RDBMS). See types of database system.
- What is your budget? Small flat file database packages are generally inexpensive. However, they may be limited in their capabilities. Usually only one person can access and amend the data at a time and they are unlikely to offer sophisticated data processing options. If you need a large or powerful database application, you should consider an RDBMS. Prices can vary, with fees often based on the number of users. Most packages allow you to purchase additional licenses as your requirements grow. Some RDBMS packages are also available to download free of charge as open source software. You simply download the software once and install it as many times as you need. See open source business software.
- Are your needs likely to change or develop? Open source software gives you access to the source code, providing you with the opportunity to develop the software as your business requirements change. However, this is likely to be a job for an IT professional. You could use the services of an IT consultant or develop your own in-house skills. You should also check the licence to see what your legal obligations are.
How to choose a database supplier
For many businesses, a relational database management system (RDBMS) can be a large investment. For that reason, it is important to choose your database supplier carefully - the wrong one could be very expensive and might even jeopardise your business.
Questions to ask potential database suppliers
Before implementing a solution based on RDBMS technology, you might find it useful to ask any potential suppliers these nine key questions:
- How long has the supplier been established?
- What are the specific costs associated with its product - ie is there a one-off purchase price, an annual renewable licence, a charge per user, etc?
- How much is charged for technical support?
- Does the supplier provide consultancy and, if so, at what rates?
- Is the system scalable? If you suddenly increase your product line by 200 per cent could the system grow automatically to cope with the expansion?
- Can the supplier recommend any third-party developers that make use of their RDBMS?
- Is there an active independent user group?
- Can the supplier provide references for businesses in your industry sector using their software?
- Does the supplier offer training in the RDBMS and, if so, at what typical cost?
If you're not sure which database technology best suits your business, you can get advice from Invest Northern Ireland's ICT advisers. Call Invest NI helpline on Tel 0800 181 4422 or read about their ICT support for business.