Making the Best Use of a Database
Just as it's hard to imagine any small business existing today without a veritable fleet of personal computers, it's almost as hard to imagine any small business not maintaining some kind of database. Indeed, the computer and a database work hand-in-hand. Wielded properly, a database can be a potent business and marketing tool. It not only can store a wealth of information about existing and potential customers in a standardized format, but it can also sort and provide that information in a variety of ways. Databases help business owners with such tasks as processing orders, tracking billings, and preparing direct mail promotions—just to name three. Moreover, because a database can be updated at any time, it is now unmatched as a reference source.
A database is in many ways like a traditional card index or address book, but it can contain a vast number of records in a fraction of the space. But while a card index or address book must be used in the alphabetical order in which it was filed, database records can be sorted and resorted in any order one desires, and individual records can be found, viewed, and changed in moments. Databases enable a business to conduct statistical analysis and print sets of records. By being stored in computers, the information can be quickly transferred to other locations via the Internet.
Most databases have structures based on records and fields. A record is an entry within the database: for example, detailed information about an individual customer. A field is an item of information within a record, such as a name, address, phone number, zip code, or inquiry date. A database can be organized alphabetically, numerically, or chronologically; and it can provide sets of records according to chosen criteria: for example, "all current customers who have not placed an order for more than three months" or "all current customers in a given locale or zip code." There are other terms tied to the capabilities of a database; the above are the essential ones to know.
A database allows you to study, manipulate, and leverage large sets of records far more efficiently than by manual sorting methods. Indeed, comparisons are laughable. A database can perform the following activities:
- Searching and updating Individual records can be found quickly, even when details given are incomplete. They can then be updated as required.
- Grouping and targeting Sets of records can be selected according to different criteria. This is very useful for targeting groups with different products or different promotions.
- Printing and mail merge Lists, address labels, personalized letters, and many other customized documents can be generated for selected groups.
- Statistical analysis Data can be analyzed and presented in a form that helps management decision making, such as monthly sales figures, or customer profiles.
Other uses include keeping track of products sold or purchased, stock control systems linked into bar code readers, and storing and analyzing data from questionnaires. Some databases allow data to be transferred for viewing on an Internet or intranet web site.
It is important that you understand your manual systems properly before putting them into a database, so first analyze your existing procedures. If you have employees, talk to them about how things can be improved. Ask questions such as: What benefits will using a database provide over those of a manual system? What do you want to be able to do in the future that you can't do now? Above all, look at the paper systems and procedures that will be required to keep an old database up to date. Yes, you might conclude that more staff time will need to be devoted to data processing, but that will be more than offset by time and/or money saved in being able to access and use the data more rapidly—including, perhaps, new purposes you never considered that will help make your operations more effective and your business more successful.
When the costs of running the system have been evaluated, you should make sure that the benefits of acquiring a database are sufficient. How many direct mailings will be sent? How many inquiries will be processed daily? How often will reports be required? You should have very specific ideas about the benefits a database will deliver to your business before even considering any technical requirements. It's important to concentrate on benefits rather than features. If the business runs a network of computers, think about whether the database is a resource that several people may want to share.
There are a number of essential steps that you will have to take when constructing a database system. Understand what all of them are in determining how long it will be before the business starts to reap the benefits.
Computerizing your business's records can fundamentally change work procedures. It is vitally important to plan for the introduction of the new system. Transferring data into a database is time consuming if it is being converted from a paper-based system. It may be a task that temporary staff can perform. Computerized and paper systems should be run concurrently until you can verify that the new system is reliable and accurate and that everyone is using it correctly.
It is important to decide exactly what information a database needs to store, because it is tempting to keep more data than will be needed. Just remember: The more data you store, the more data that has to be gathered, recorded, and maintained—and there are real costs attached to each of those tasks. Think carefully about what information you really need and how you will use it. Input screens should show information in a logical and readable fashion, and the layout should match any paper forms used for data collection.
Accurate and consistent data input is vital! As the saying goes, "Garbage in, garbage out." Standards for data entry should be created well before anyone starts to input information. For instance, you need to decide how the system will organize and handle business names (it's standard to record a firm's name as it appears on its letterhead). Also establish consistent rules for spacing between letters and words; otherwise, "T M Lewin" could be "T. M. Lewin," "TM Lewin," or "T.M.Lewin." A person probably won't see any difference, but to a computer there is a vast difference. If a database was searched for an exact match and the data entry process was inconsistent, the entry may be missed entirely; some databases do offer an option to search for the closest matching entry, which should find the record, but don't assume that. If codes will be used to categorize records, it is essential to standardize the coding and notify the data entry staff in advance. Many systems now can be set to reject entries that do not match valid code lists.
You should have systems in place for keeping data up to date. That may be as simple as giving someone the responsibility to make changes to the database as they are required. Addresses and contact names should be checked on a regular basis to ensure they are accurate, and defunct records should be deleted regularly so that the database only contains useful information. Employees should be fully trained in the use of the system, and you must make sure that working conditions comply with OSHA regulations. It is also essential to make regular backup copies of data in case the system breaks down. It's equally important to have procedures in place to ensure that the only people accessing the data are authorized to do so; for example, information about individuals is subject to numerous privacy regulations. The Federal Trade Commission has information about privacy initiatives.
Using a database before it's fully ready can cause many problems, so be sure to plan carefully before implementing a database system to replace any of your manual systems. Also make sure that you establish a period of time for both systems to run alongside each other. It will allow you to iron out any problems with the new database before abandoning your old system.
A new database system can introduce new opportunities and efficiencies elsewhere—as long as a business's managers allow for that opportunity. Newly available data can transform a marketing strategy, for instance, and speed billing. But that's not likely to happen if a new system is tied to old practices. Installing a database is an ideal time to rethink business practices and also abandon ones that no longer deliver benefits.
As new IT systems can be very expensive, the business must be committed to computerizing its records system and budget accordingly. Computerization should be seen as an investment that allows the business to do more with its information. In turn, necessary staffing and administrative support must be in place to ensure the database works properly. There is no point introducing a system that won't provide major benefits to the business.
Gillenson, Mark.
Hoffer, Jeffrey A., Mary Prescott, and Fred McFadden.