Benefits of databases
What is a database?
A database is a collection of electronic records organised in a way that makes it possible to quickly find and manage information. A simple example of a database is:
- a list of names and phone numbers that can be sorted alphabetically
- an ascending list of stock codes with current levels or item details
How databases work
You can store data in various formats, known as database models. The most common model is the relational database model, which 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 (DBMS)?
A database management system (DBMS) is software designed to create, update, analyse, retrieve and store data in computer systems. There are several types of database systems available, each suited to different needs.
Database use in business
Businesses use databases to organise and manage essential information, including customer records, inventory data and employee information. Databases can manage:
- customer records
- inventory tracking
- order processing
- employee details
- productivity reporting
- financial reporting
- data analysis
It is important to structure data well to get the most from database technology.
Manual vs computerised database systems
Manual filing, like card indexes, can be inefficient and prone to errors. For example, customer cards work if everyone lists customers' surnames in the same spot for easy sorting. But if details vary, for example, some cards feature postcodes in this place instead, finding information becomes much harder. Cross-referencing information across multiple files is even trickier.
A relational database management system uses common identifiers - or 'keys' - to connect related information. For example, a customer ID number can link a specific customer to all their orders, making it easier to retrieve and manage data. Find out which database solution may be best for your business.