Data Warehouse versus Database: What is the difference?
Essentially, a database is - without getting too technical - a collection of structured data stored electronically in a computer system. For an ERP, this could be within the physical server or if it’s on the cloud, within a data center owned by the ERP vendor.
Each database is controlled by a database management system (DBMS). When referring to data, the DBMS, and any other applications used within the system as a whole, it is known as a database system. Most people will just call it a database.
Nowadays the most common way a database presents itself is through rows and columns in a series of tables, which makes managing data a more efficient process. It records real-time information about one particular part of your business. At its foundation, its main job is to process the daily transactions your company makes.
The true definition of a database has become blurry over the years as the systems evolved. From the first known database in the 1960s to present day, the development of the software has allowed data within a database to be flexible in such a way it’s become revolutionary.
Many people still consider a spreadsheet as a database (and they’re not wrong). Spreadsheets such as Excel or Google Sheets are designed to store data; however, like plastic they’re for single users. They have limitations in how much information can be manipulated. Whereas a database is precisely the opposite, it can handle a massive volume of queries and be wielded by multiple users.
One of the key features of how an ERP functions is through its common database. For example, NetSuite has a core database that allows its users to centralize information from all the organization’s departments.
Through this functionality, a business can avoid all manual data entry and the need to merge separate databases from different applications. NetSuite’s database automatically manages the core operational data, to present it in a clear, concise manner. Having a common database enables all decision-makers to have an inclusive view of the company.
The most common data warehouses are:
| ||A virtual data warehouse: separate databases that are queried together to effectively access data within one place. |
| ||A data mart model: data is aggregated into a specific business area, such as sales or finance. |
| ||An enterprise data warehouse: this is the heart of a company’s information system, which consolidates data from all business departments.|
The big question that is often asked when it comes to deciding what direction to take is: why? Why have a data warehouse when it’s clear that a database is also an adaptable platform. A major reason is to create superior reports of your data in order to make even more accurate decisions based on past analytical data for business development.
For those who use an ERP system, such as NetSuite, the need is even greater. NetSuite is a software intended to run the day-to-day operations. Their database will deliver operational reports focused on your core business activities.
The issue becomes apparent when users need to visualize all relevant information. NetSuite’s data limitations then lead decision-makers to do their more strategic and complex reporting outside the ERP platform.
An application like a data warehouse will integrate to your NetSuite system and provide you with augmented views and tables to better analyze your pertinent data. The benefits of a cloud data warehouse are significant and once implemented there is no going back, you’ll see.
What are the benefits of a Data Warehouse?
How a data warehouse can benefit an organization lies within its scalability, flexibility, and accessibility, but those are just a few.