A Database is a Powerful Business Tool

A Database is a Powerful Business Tool

In business, success requires "information". Either you have it, or you don't. If you have the right information, you can make informed decisions. If you just have information (and cannot determine its accuracy or relevance), then your decisions are no better than the answers you get from flipping a coin.

But where does "information" come from? The source of all information is "data". Raw data is usually not useful to us because it is simply a collection of facts usually pertaining to some sort of transaction. But to harness the power of information, you need the ability to collect, store and analyze your data. That is where a "database" becomes a handy tool.

Advantages of a Database
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A database is an organized collection of data. There are three basic concepts related to a database:

* Collection
* Storage
* Reporting

A "database transaction" is any interaction that occurs with a database, including putting data into and retrieving data from the database. The "collection" and "storage" of data is a type of transaction where the database is a "receiver" of data. It is the job of the database to store this information in a way that is easily retrieved.

"Reporting" is the process by which one can discern knowledge from studying the data. Simple reporting will show basic relationships of the data. Advanced relationships require more intelligent processing and are the reason that "data mining" and "data warehousing" were created. I will cover those concepts in my next article.

The key to the management of the data within the database is the "database manager". You may have heard about a concept called the "Database Management System" (DBMS) or RDBMS for "Relational Database Management System". These are computer software packages that include a "database manager" which keeps track of not only the structure of the database, but the traffic flowing in and out of the database.

The database manager is what makes enterprise database management systems (such as Oracle or Microsoft SQLServer) different from databases that are stored as files like Microsoft Access and spreadsheets. Yes, spreadsheets can be considered a database. In fact, we use the well-understood concept of a spreadsheet to describe the anatomy of a database.

Database Transactions
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Most databases store data in terms of "rows" and "columns" (columns are sometimes called "fields"). A collection of related columns are stored in "tables".

A "spreadsheet" is an example that is easy to understand. The columns and rows form a grid by which you can identify each piece of data. Today's spreadsheets allow for multiple "pages" within a "workbook". Think of those pages as "tables" and the entire workbook as the "database".

So in your first "table" (worksheet in your workbook -- let's call it "Personal Friends"), you place column headers for "Last Name", "First Name" and "Phone Number" (your "columns"). As you fill in each row with your address book information, you are creating "rows" of data.

As you do this for each of the worksheet pages, you are creating more tables. Those "tables" combine to make a database. If you need to change information in the "Personal Friends" table, you open that workbook page, scroll down to the row you need to modify and move to the column that needs modifying. You change the data element and save the changes. In this capacity, you are acting like the database manager.

Database Reporting
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Now that your data is collected and stored, what about making information out of it? That will require the retrieval and analysis of your data. Most databases use a standard way of "querying" a database. It is called "SQL" for "S"tructured "Q"uery "L"anguage. This is a standard way in which you create a statement that performs a data transaction with the database (it can be inserting, updating, deleting or retrieving the data).

SQL can do more than retrieve data. It can also aggregate and process your data using some of the SQL functions. For instance, you can count all of the rows in your database that match a certain criteria, like having a last name of "Smith". You send the request to the database manager and it returns the count to you.

In our spreadsheet example above, you can use the features of the spreadsheet program to sort or filter your rows of data. You can also use its "functions" to draw charts and graphs. While a spreadsheet has everything encapsulated in one program, it has the limitation of only handling small amounts of data. You need larger database management systems to handle volumes of data transactions.

And more advanced reporting, like finding the relationship between the type of customer and products sold, requires more processing. This processing is done in the form of computer software that builds charts and graphs and by using database tools that re-organize the data into different databases from which the final reports can be run. This is typically called "data mining" and involves the concept of "meta data". Those topics are reserved for the next article.

Concept Review
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A "database" is a collection of data from which you will discern knowledge. A "transaction" involves the process of storing or retrieving the data. Database management systems are used to help keep the database "tuned" so that your transactions occur smoothly. Think of the "database management system" as the gatekeeper between you and the data.

Until Next Time,

Paul Carney

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Paul Carney is an Internet entrepreneur who has helped build and sell 2 online businesses. He devotes his time to writing technology articles to help business people understand technical terms in common ways that make sense to them.

His FREE weekly article:
"Describing Technology in Terms of Business(sm)"
can be found at http://www.ishtot.com

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ishtot -- "I Should Have Thought Of That!"
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