As your business grows and you need to keep accurate records on a computer beyond what is reasonable to do with a spreadsheet program, you should consider adding database management software.
Karen Stille placed a good comparison of the features of database and spreadsheet software a website, QCISolutions. In summary, she states that:
“As a general rule of thumb, databases should be used for data storage and spreadsheets should be used to analyze data.
“In a nutshell we use a database if...
- the information is a large amount that would become unmanageable in spreadsheet form and is related to a particular subject.
- you want to maintain records for ongoing use.
- the information is subject to many changes (change of address, pricing changes, etc.).
- you want to generate reports based on the information.
Use a spreadsheet if...
- you want to crunch numbers and perform automatic calculations.
- you want to track a simple list of data.
- you want to easily create charts and graphs of your data.
- you want to create "What-if" scenarios.
“In most cases, using the combination of a database to store your business records and a spreadsheet to analyze selected information works best”. (Stille 2009)
Microsoft’s widely-used database management software is called ACCESS, and versions of Microsoft Office that use ACCESS are available for purchase. More information is available on the Microsoft site (Microsoft). On the other hand, open source database management software is also available at no cost to you. You may wish to examine one of the following open source packages to see if one of them meets your needs:
- MySQL (MySQL 2009)
- Zoho Creator (Zoho 2009)
One of the prevailing issues with using open source software rather than software you purchase is the level of support you can expect from the software’s creator. If you pay for software, you have a right to expect excellent documentation and support. If the software is free, sometimes documentation and support do not meet the same standards. Much of the support you get is from the community of users. As of this writing, the worldwide community for ACCESS is much larger, and there are many books written about it. The open source databases are just as useful, but finding information and support can be a more tedious process. However, according to the Gartner Group, a highly-respected technology research company based in the US, open source database management software is becoming more attractive. In a report released in November 2008, they made the following observations:
“During 2008, since our last note about open-source database management systems (DBMSs), we have seen an increase in the interest and use of open-source DBMS engines in a production environment. As this trend continues to gain speed, the cost benefits of using an open-source DBMS is increasing and the risk of using it is decreasing.
- Lower total cost of ownership (TCO), compared to commercial DBMSs, can be realized for non-mission-critical applications.
- There are large third-party software vendors looking to certify open-source DBMSs as a platform for existing applications, including SAP.
- The major open-source DBMS products are now available for installation as a package, without involving the source code, including tools to help support the DBMS environment.
- If the technical capabilities of the staff are strong, use of an open-source DBMS in mission-critical environments is possible now.
- Open-source DBMS engines can be used today for non-mission-critical applications with reduced risk over several years ago.
- Only use an open-source DBMS engine supplied by a vendor who controls or participates in the engineering of the DBMS and always purchase subscription support when used in production environments.
- If open source is part of your overall IS strategy, plan for the use of open-source DBMS engines in mission-critical environments in two to five years.” (Gartner 2008)
- Acquiring software programs designed specifically to meet most needs of a small organization
- In the same way that Office Suites are available which can perform many of the basic information systems tasks of a small organization, there are suites of programs available to perform specific functions like accounting, payroll, customer relationship management, inventory control and the like. Recall that we discussed computer-based accounting systems in considerable detail in Financial and managerial accounting; financing your organization.
- (Enterprise Resource Planning (ERP) systems are the analogous software solutions for large and medium-sized companies.) Examples of small business “suites” include the following:
Microsoft has a site devoted to software suite solutions for small businesses at: http://www.microsoft.com/business/peopleready/
NetSuite NetSuite is in a category of software called “software as a service” (SaaS). In the SaaS model, the software resides on the servers of the software provider rather than on the using the organization’s computer. The advantages of this model are that users never have to worry about software and data backups or software updates. These functions are provided at the software company’s data centers. Some SaaS models charge users by the month, others charge them at a variable rate, based on the number of transactions per month and/or the size of their databases. The downside for some users with SaaS is that the information is not kept “in-house”. Although hosted solutions are considered very secure, some users worry about security and privacy issues. The website, www.2020software.com, compares several small business software suites, and has links to the companies’ sites.
There are a number of open source initiatives for small business software you may wish to investigate. One such example is xTuple. A comprehensive list of options is available at SourceForge. Our previous cautions on the use of open source software products apply here as well.