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A database is a collection of records typically stored in an electronic format. These records are 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 stock levels or item details

Understanding databases

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 streamline various processes, such as:

• customer management
• inventory tracking
• order management
• employee management
• productivity reporting
• financial reporting
• data analysis

The key to effectively using database technology lies in structuring information for efficient processing and management.

Manual vs computerised database systems

Manual filing systems can be inefficient and prone to errors. For example, if your business uses a simple card file system for customer information, its effectiveness will depend on consistent organisation. If all cards list the customer's surname in the same spot, they can be easily sorted alphabetically. However, if some cards have the postcode in that position, finding information becomes much harder.

While single-card file indexes are straightforward, cross-referencing information across multiple files can be complicated. In contrast, 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.

To effectively streamline your data practices, explore which database solution may be best for your business.

A database management system (DBMS) is software designed to create and manage databases. Many different types of database systems exist, each categorised by how they structure and manage data.

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 stores data in a plain text file, with each line of text typically representing one record. Fields are separated by delimiters such as commas or tabs. Flat file databases have a simple structure and, unlike relational databases, do not 91Ï㽶»ÆÉ«ÊÓƵ multiple tables and relationships.

A contains multiple tables of data organised in rows and columns that relate to each other through special key fields. These databases are more flexible than flat file structures, and allow for reading, creating, updating, and deleting data. They use Structured Query Language (SQL), a standard programming interface for database interaction.

Types of relationships in a database

In relational database design, there are four types of relationships:

• one to one - one record in a table relates to one record in another table
• one to many - one record in a table relates to multiple records in another table
• many to one - multiple records in one table relate to a single record in another table
• many to many - multiple records in one table relate to multiple records in another table

These relations create functional dependencies within the database. Common examples of relational databases include MySQL, Microsoft SQL Server, and Oracle.

Four types of database management systems

A relational database management 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

A resembles a tree structure, similar to a folder system on a computer. Records have a pre-defined relationships in a one-to-one manner, between 'parent and child' nodes. They require users to navigate the hierarchy to access data. Due to limitations, such databases may be confined to specific uses.

also have a hierarchical structure. However, instead of using a single-parent tree hierarchy, this model 91Ï㽶»ÆÉ«ÊÓƵs many to many relationships, as child tables can have more than one parent.

Finally, in , the information is represented as objects, with different types of relationships possible between objects. Such databases use an object-oriented programming language for development.

NoSQL or non-relational databases

offer a popular alternative to relational databases. They accommodate various forms of unstructured and semi-structured data, including key-value stores, document stores, and graph databases.

Which database is right for you?

Businesses with simple database needs often use standard office tools like spreadsheets. However, if you handle large amounts of data or have complex requirements, consider more robust database systems that offer better functionality. Find tips on choosing the right database for your business.

Databases can benefit any business that needs to process large volumes 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 solutions

Database development tools

Unlike conventional programming languages, database development tools simplify the management of structured data files. These tools impose strict design parameters on developers to ensure that data retains its integrity and accuracy.

Most database development systems operate on a commit basis. This means that any changes to data are made in such a way that prevents data corruption in case of system failure. Similarly, professional database development tools allow multiple users to access and use data simultaneously, which greatly improves the efficiency of these systems.

Advantages of database development

One of the main benefits of using a database development system is the ability to customise applications to meet your specific business requirements. This avoids compromises often associated with 'off-the-shelf' software. However, defining your requirements can be complex, and you may need to consult a professional system developer.

Read more about the benefits of database development.

Accessing and manipulating databases

Modern database systems primarily use Structured Query Language (SQL) for data processing. SQL allows you to analyse data and generate reports in various formats. For example, you can create a report that lists all customers who ordered products on a Friday afternoon, helping you gauge demand for weekend deliveries.

If you're new to SQL, expert guidance can help you use it more effectively. Consider consulting a professional developer or asking your database supplier for additional 91Ï㽶»ÆÉ«ÊÓƵ. Find out how to choose a database supplier.

Using database technology to gather, store, and process information about your customers, suppliers and competitors can give your business a real advantage. Creating a database can help you:

• save time on data management
• analyse data in different ways for better insights
• organise your data management processes
• turn scattered information into a valuable resource
• improve the quality and consistency of information

Many businesses struggle to gather and process large volumes of information due to limited time and resources. This can lead to a lack of understanding about:

• how well the business is performing
• the profitability of different products
• customer buying habits

A good database can help across all these areas. If you're not sure how, see 5 reasons why your business needs a good database.

The role of data in your business

A strong relational database management system lets you store large amount of data, which can become increasingly valuable over time. For example:

• historical data can show trends in your business
• sales records can identify valuable customers

In addition, setting up processes to gather, enter, and manage data can help your business run efficiently and stay organised.

It's not always clear what information is potentially valuable, so try to gather as much data as possible while keeping data protection responsibilities in mind.

Data protection and compliance in database development

When you gather, store and process personal data, you must comply with the relevant data protection legislation. According to UK data protection laws, the personal data you process must be:

• adequate - enough to fulfil your stated purpose
• relevant - directly linked to that purpose
• limited - restricted to only what is necessary for that purpose

For more information, see our guide on complying with the UK General Data Protection Regulation.

Developing a custom database for your business can be beneficial, but it's important to also consider the downsides. Here are some key disadvantages to keep in mind:

1. High initial costs

Creating a custom database often requires a significant financial investment. This includes hiring skilled developers, purchasing necessary software, and upgrading hardware. These costs can be much higher than off-the-shelf solutions, which might offer similar features at a lower price, especially for small businesses. It’s essential to weigh these costs against the potential benefits of database development.

2. Time-consuming process

The development of a database can take a lot of time. The process includes several steps, such as design, testing, and implementation. Each step needs careful attention, and any delays can extend the timeline. You might find yourself waiting longer than you anticipated to see the advantages of the new system.

3. Skill requirements

Building a database requires specific skills. If your team lacks this expertise, you may need to hire or contract skilled professionals experienced in database design and programming. This can quickly add extra costs and strain your budget, especially for small businesses. Finding the right talent can also be time-consuming, leading to delays and prolonging the timeline for implementing your database solution.

4. Operational risks

Custom databases can carry operational risks. If the system does not align with your business needs, it may disrupt daily operations. Investing in a system that looks good on paper, but is untested in practice, can lead to challenges and possibly costly downtime, especially if it affects essential functions.

5. Maintenance and upkeep

Custom databases need ongoing maintenance to perform well. This includes regular updates, backups, and troubleshooting. Over time, these maintenance costs can add up, possibly surpassing the initial investment. Additionally, the complexity of custom databases can pose challenges. As your business evolves, making changes to the database might require considerable effort and resources.

6. Data security and compliance concerns

Creating a custom database may expose your business to data security risks. It’s crucial to implement strong security measures to protect sensitive information. Failing to do so could lead to data breaches, resulting in serious consequences for your business. Find out more about IT risk management.

Choosing the right database for your business can be complex. Each type offers different features and benefits depending on your needs. To make the right choice, consider:

• the type of data you will use, eg text, images or numbers
• the structure or model you want the data to have
• where you want to store it
• how you plan to manage and access it
• what you intend to use it for
• how consistent your data will be
• querying and reporting features you need

Many sectors, like manufacturing, publishing, or finance, have databases tailored to their unique needs. Explore options for databases that match your industry requirements. Consulting your trade association or sector peers can also provide valuable recommendations. Research online to review popular options.

Choosing the right database system

To select the best system for your business, ask yourself the following questions:

How will you use the data?

If your data is minimal and only needs occasional filtering or updates, a standard spreadsheet might be enough to meet your needs.

Who will need access to the data?

If multiple people need simultaneous access to view and update information, a relational database management system (RDBMS) is more suitable than a standard spreadsheet, which typically only allows single-user edits. Learn more about the different types of database system.

What is your budget?

Small flat-file databases are often inexpensive but limited in capabilities. They also often have single-user access. Larger relational database packages allow multi-user access and advanced processing but may cost more. Some RDBMS software is available as open source software, providing free access with scalability through additional licenses as your needs grow.

Will your needs change over time?

Open source databases let you access the source code, allowing you to adapt the database as your business evolves. This often requires specialist IT skills, so you may need to hire an IT professional or engage a consultant. Review the software license carefully to understand any legal obligations.

If you are considering a custom database for your business, see more on database systems development and how to choose a database supplier.

Selecting a reliable database supplier is important, especially when investing in a relational database management system (RDBMS). A well-chosen supplier will not only meet your current needs but also 91Ï㽶»ÆÉ«ÊÓƵ your business as it grows. The wrong supplier, however, could bring unexpected costs, disruptions, and even put your business at risk.

Questions to ask potential database suppliers

Before making your choice, consider these essential questions to assess suitability of potential suppliers and ensure their offering aligns with your business needs.

How established is the supplier?

Experience matters. A long-established supplier is more likely to offer a stable, well-91Ï㽶»ÆÉ«ÊÓƵed product with a proven track record.

What are the specific costs?

Request a clear breakdown of costs, including one-time purchase fees, annual licensing fees, and per-user charges. Understanding the full cost structure upfront helps avoid surprises.

What is the cost and availability of technical 91Ï㽶»ÆÉ«ÊÓƵ?

Reliable technical 91Ï㽶»ÆÉ«ÊÓƵ is vital for maintaining your database. Ask about 91Ï㽶»ÆÉ«ÊÓƵ hours, service levels, and additional charges for 91Ï㽶»ÆÉ«ÊÓƵ.

Does the supplier offer consultancy services? If so, what are the rates?

Some suppliers offer consultancy to help you maximize the use of their database product. This can be useful if you need guidance on customization or integration.

Is the database system scalable?

Your business may grow, so you'll need a system that can scale efficiently. Ask if the database can handle sudden increases in data or users and if any costs apply for scaling.

Are there third-party developers experienced with this RDBMS?

Third-party developers can provide additional services or customisations, making the system more flexible and adaptable to your needs. Check if the supplier has partnerships with these developers.

Is there an active independent user community?

An independent user community can be a valuable resource for troubleshooting, sharing insights, and connecting with other businesses using the same system.

Can the supplier provide references from similar businesses?

References from businesses in your industry can show how well the system performs in a comparable setting. Real-world testimonials are an effective way to validate the supplier's claims.

Does the supplier offer training, and what is the cost?

Effective training can make implementation smoother and increase user confidence. Ask about training options, formats, and costs, especially if your team will need upskilling.

As well as these questions, consider also the database's security features and compliance capacity, as well as system reliability and performance. Ask about system uptime, and check if the provider offers a service level agreement (SLA) to guarantee performance.

For more on setting up database systems, see our guide on database systems development.