Just like an ERP implementation needs a discovery step to set up a plan as well as the research and development of the project, launching a new data strategy needs an outline, otherwise known as data modeling.

But, what exactly is data modeling?

In a nutshell, data modeling is a roadmap, outline, or blueprint that emphasizes the different data flows through diagrams. For companies who are launching a new database, data warehouse, or data software, it’s essential to begin with designing diagrams that will describe in detail how the data will go in and out of the system.

The objective is to set up a visual representation of the data process in order to provide teams with a better understanding of how the data will communicate between the different infrastructures and data points.

Questions that should be answered are: 

  1. What is the relationship between the data types?
  2. How is the data going to be grouped?
  3. How will the data be organized and attributed?
  4. How will the data be used and stored with the system?

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Just like any other IT project, these questions will differ from business to business depending on the objectives and requirements of the company.

How To Create A Data Modeling Strategy

Just like an architecture creates a blueprint before asking engineers and contractors to come in and build, data modeling is all about pre-project schemas and techniques. This is the best way to manage consistent results between data resources. 

And remember, while there is no specific out-of-the-box plan, there is a base procedure that can be followed when building out a data model. Keep in mind that this strategy can evolve as the business grows and scales.

Identify Entities

The first step entails identifying entities, such as events and concepts that will make up the modeled data set.

In other words, what data attributes are we creating properties for? E-Commerce businesses will require entities for customers, addresses, and transactions in order to keep clean records of the different customers and purchases made.

For example, an address entity will have all the attributions associated with location including street name, city, region, and country. Whereas a customer entity will more likely include properties for name and phone number.

Create Data Relationships

Moving forward to step two, we’ll start going into the nitty-gritty. What are the relationships of each entity?

Going back to the e-commerce example, a business will need a customer name and address in order to deliver products. 

Therefore, a customer entity will need an address, which would expand to include another entity around orders. When an order is placed the property around that order will include both the customer and address entity to create a relationship.

Certain language called unified modeling language (UML) is used to document each data element.

Map Out Entities

A very important question is answered here: how will the business use the data?

Once answered, developers can strategically set up a data structure with patterns and designs that will be used throughout the company.


This is where a conceptual data model is created. Generally speaking, most companies will use Normalization, a technique that groups data models together.

As mentioned earlier under Data Relationships, normalization will organize these key entities and assign them to groups without creating any redundancies. For customers who have an associated address as well as an order history, this data will be grouped together without risk of repetition elsewhere in the data structure.


As is the case with most things in life, it is important to test before finalizing and validating any data tool. Better to know what is working before the go-live than go back and fix issues while the new data structure is in place.

It’s also a good idea to keep in mind that the data modeling process should be refined throughout the years as the business continues to adapt and evolve.

Benefits of Data Modeling

It’s hard to envision a project and software without any type of roadmap or outline. How can a company get developers, architects, analysts, and business stakeholders on board if there is nothing to present?

A data model puts the project into perspective where all team members can have a top-level view and full understanding of the data relationships within the database or data warehouse.

The process of creating a data model also:

  • Lowers the margin of error throughout the development
  • Manages consistency within the data and system
  • Streamlines performance across the database or data warehouse
  • Facilitates the operational efficiency of data mapping across the board
  • Enforces collaboration between both developers and product teams
  • All levels of design are done in a faster and more effective way

Types of Data Models

There are three types of data models to consider when working on database design.

Conceptual Data Model

Similar to how the word concept is defined, this type of data model offers a visualization of what the system will look like, how it will be organized, and the different business rules to be incorporated. 

A conceptual model is done at the beginning of the process.

Logical Data Model

This is the place where developers expand on the details, by providing a more concrete and in-depth model. Concepts and relationships within the program are also analyzed.

Developers will advise on the attributes, including data types, entity relationships, and properties.

Physical Data Model

Here is where it gets, well, physical. A physical schema will be presented describing how the data will be stored within the database.

Most likely, a finalized design will be introduced that specifies the relationships between entities, primary and foreign keys that maintain said entities, as well as the properties included in the DBMS (database management system).

Data modeling is an essential part of any new data project. Companies who are interested in moving forward with their data strategies, such as implementing business intelligence, need to truly understand data requirements as well as the importance of solid data modeling.

Our team of BI experts have extensive experience in both business intelligence, data warehousing, and data modeling in order to get your project off the ground.

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About Victoria Sapsford

Victoria Sapsford is a self-described wordsmith, on a mission to discover the meaning of life through words. She’s also the current Marketing Specialist at GURUS Solutions, where she spends her days strategizing marketing campaigns and writing content about tech, ERP, and everything in between.

With degrees in Applied Languages and Fashion, it was in 2020 when her love of B2B marketing led her to make the switch to the ever-growing tech industry. It didn’t take long before she felt right at home, and now she can’t stop writing about ERP, NetSuite, and Business Intelligence.

Hailing from South Africa, she moved to Montreal from BC a few years ago after spending some time abroad. It didn’t take long before she fell in love and has been here ever since. If you can’t find her, she’ll most likely be at the airport, attempting her feat of becoming a citizen of the world. 

Still curious about NetSuite ERP and everything related? Take a peek at her other blogs below.

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