A Database is a repository of structured information of similar formats that helps in accessing, analyzing and interpreting the data with ease and efficiency. The data is stored in different styles and maybe in form of graphs, tables, reports and so on. Databases are highly useful to maintain several records and complex data. It helps the firm to keep a track of all its suppliers, vendors, payment schedules and so on. It helps in maintaining the data in an organized manner and the firm can make use of the same at any time.

The two important forms of databases are:

  1. Flat database: it is the simplest database design which includes just one table which comprises of all the details. There are no inter-links between the files or sheets. There are no relational criteria specified.
  2. Relational database: the data captured here is connected through several relations. This kind of database can hold several complex data mechanisms which make decision making easy for the business. Most of the tables are inter-connected which enables the user to make use of the data in several combinations.

How to build a database?

  • Recognize the entities: the various kinds of data stored in the database are known as entities. They are further classified into different categories being: people, things, events, and locations. The data collected has to be put under one of these classifications.
  • Recognize relationships between the entities: understanding the connection between several functions and building the required links is an important aspect to be considered while building a database.
  • Entity Relationship Diagram (ERD): this will provide a graphical overview of the structure that the database has incorporated.
  • Understanding the attributes: this is a level where what kind of data is required has to be determined and updated.
  • Normalization: this will help in standardizing the data across making it reliable and flexible. This will also help in clarifying how the data can be dependent on each other with a pre-set system.

Get more definitions about Database and other ERP related terms here.


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