Database is a large set of data containing all the information important to an organization(Stephen , 2008). The definition of database specifies the importance of the database.
A business organization maintains a database of their products, employees, customers and anything which is important to their organization. For example,
• employee records
• customer records
• Information about different other businesses to which the business organization is linked.
Without maintaining a sound database an organization cannot function properly.
• The manual procedures will take long time. This will affect the efficiency of the business organization.
• Changing the information which is currently held by the organization will take more.
• The management problems will arise.
• Without sound database it will be difficult to take decisions.
• There will be no control on the business.
• There will be a risk of frauds because no record of transactions will be held.
• It will be difficult to manage the labour and the employees. Without a data base labour turnover cannot be found and business may have to face great loses as the cost will rise due to high labour turnover.
• It will be difficult to root out the problems faced by an organization.
• The organization will be entangled in its internal affairs and will not be able to focus on expanding the business.
• Management will take time in decision making and business might lose to its competitors.
• Senior managers will not be able to provide a reliable long term planning.
• Non routine decisions will be difficult to take and will create problems for middle managers.
• Even business organization’s day to day operational activities will be affected.
• The structure of organization will be rigid. It would be difficult for the business organization to mould itself according to the present situation, they will be facing.
Stephen, H. (2008). Business Driven Technology. McGraw Hill.