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Do you need multiple databases? 02/19/2010

Posted by TBoehm30 in Database.
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Should you setup multiple databases for the company? No matter what your desire, you will always wind up with multiple databases. Whether they are backup databases, training databases or development databases, they will be needed.

The answer, however, is NO. You do not need multiple production databases for your company.

Using multiple database has its allure because it allows you to separate your data. You might have internal security issues which require separation of data and access. You might have reporting requirements which demand information to be segregated. You might have data issues which cannot exist on the same database. The easy, quick, answer is multiple databases.

There are too many problems with creating multiple databases. Let’s walk through an example that demonstrates the problems with the easy solution. You work at a company that wants a new ERP system for its 3 subsidiaries (it could be any database software – CRM, accounting, manufacturing, etc.). You want to make sure that each subsidiary doesn’t see any data from any of the others. You don’t want them poaching customers, or gathering data about the entire company.

You need a system that will work the same for everyone, but protect your security as well. You want to roll up accounting into corporate from the subsidiaries and have visibility from the top down. Multiple databases sounds ideal for that purpose.

Your company plans on creating or buying more subsidiaries in the future. Your plan for each new subsidiary is simple: Bring up a new database. As an added incentive, your subsidiaries use similar IDs for their data and would have to make significant culture changes if all their IDs had to change. [Think about a customer Id. If they don’t share data, then each of the 3 subsidiaries need a different Id for the same customer.]

Talk to the software vendor. Do you need to purchase extra licenses because of the extra instances of the software? Will they charge more for upgrades when it is not a single project? Will you have to replicate all customizations 3 or 4 times? Will you need extra hardware to handle the different databases? Can they exist on the same server or even the same instance of the database server?

Next look at your needs at corporate. You want visibility from the top which means logging into multiple databases. Are your executives savvy enough to handle that? Will they get confused logging into multiple databases? Is your IT staff savvy enough to handle the extra load? They will have to support all of them – that might mean simple password requests on 4 systems, or data inconsistencies from corporate reports.

Finally, look to the future. Could you combine your purchasing department to get better volume discounts for shared suppliers? How would you do that on multiple databases? How about centralizing the sales department? Could that be done with the setup you’ve chosen? The same goes for most of the functions that could be centralized, but are not today.

How do you solve these problems? Yes, there is extra work in that. You’ve got to setup security around each subsidiary so they don’t see other’s data. You’ve got to figure out a scheme for setting up IDs such as customer IDs and Supplier IDs that won’t conflict and won’t cause too much disruption. You’ve got to create a plan to bring up new subsidiaries within the existing system.

Again, talk to the vendor. You are going to save money on the software by only going with a single integrated system. You should need fewer licenses, and less expensive hardware. Your single database will be able to consolidate corporate data quickly and effectively.

Your IT department will be relieved from all the extra work. They will only need to support one system. They will only need to create 1 set of reports; even if they have extra security around them. They will have one system to have problems with and solve. There will never be integration problems between the systems. They’ll never have incompatible parameters, or global indicators that don’t match.

Talk to your executives and find out what information they need at their fingertips. Can you create real-time dashboards across multiple databases? Can you provide real-time reports on cash, inventory value, A/R, A/P, etc.? Do they need to export data from the system, and would that work if it was exporting from multiple systems?

The bottom line is that a single database makes sense for a single company. Don’t let the easy answer to tough questions change your outlook. It might take more work to set it up, but in the long run, it’s worth it. As we all know by now, it’s a global world out there and Technology makes it happen.

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Comments»

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2. Salman-ul-haq - 07/16/2010

We have two separate legal entities under one group. Should we go for one database or two database instances while using an ERP system. What is the best practice?

Please reply.

Thanks

tboehm30 - 07/16/2010

Salman:
I’ve seen both methods used. You should talk to your software vendor for their suggestions.

It will depend on how much consolidation you need. Do the 2 companies share anything? The same collections department, the same purchasing, etc. Will you need one set of accounting numbers now, or in the future? How much are the 2 companies split? Should they see each other’s customer and pricing lists?

Then, it depends on how the software handles multiple databases. You may be paying twice for everything.

You should gather up your requirements on what you need to have split, and what you need shared. Then sit down with an expert on the specific software you are using or expect to use. If you haven’t bought anything yet, then add this to your RFP.

Good luck.


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