Understanding Data Management and Database Management

Data is invaluable to companies because it helps them develop strategies that make their operations more efficient and satisfy their customers.

Data management and database management are two important business concepts that help companies gather insights from their data to make informed decisions that will improve their revenue and profit. 

Companies might seamlessly manage their data initially but as they grow, their data grows too and it may become challenging to manage and extract valuable insights from it. However, they can outsource their data entry and data administration tasks to third-party companies with experts who can manage their data efficiently and gather the necessary insights on their behalf.

Data management and database management sound similar and have similar objectives, but they are slightly different. In this article, we will explore the concepts of data management and database management, and delve into their importance.

What is Data Management?

Company Data - Illustration

Data management is the act of collecting, analyzing, organizing, storing, and managing data to improve decision-making and make a business more productive. Most companies generate lots of data, which can individually be useless, but with proper data management, managers and business leaders can make sense of them and use the insight to gain a competitive advantage.

To make sense of the data collected, businesses have to develop sound data management strategies. These strategies usually include the following activities:

  1. Data collection, processing, validation, and storage.
  2. Analysis of structured and unstructured data obtained from different sources.
  3. Ensuring data availability.
  4. Data backup and recovery.
  5. Controlling how employees access and use data.
  6. Securing data and ensuring it stays private.

What is Database Management?

Database management is the act of defining, manipulating, retrieving, and managing the data stored in a database. Companies store a lot of data in their databases, including customer personal information, employee records, inventory data, logistics data, sales data, and customer reviews. They need to be managed properly to be easily used as intended.

Data stored in databases is usually categorized and structured so that it can easily be searched, updated, and managed. Database administrators use database management systems for this because a database can contain hundreds of thousands of elements, and it is almost impossible to extract valuable insights from them manually.

Here are some tasks that are part of the database management process:

  1. Monitoring application performance as data grows.
  2. Planning for increased data storage.
  3. Creating data backups and disaster recovery solutions.
  4. Replicating, partitioning, masking, and archiving data.

Importance of Data Management

Insights from big data tell companies what their customers want and inspire them to change or improve their business models, making them more competitive. For example, businesses can use social media comments, advertising metrics, consumer behavior on websites, and sales figures to determine the products they should invest resources in to maximize profit.

Companies can also use advanced tools like sensors and IoT devices to gather real-time in-house data to learn how to make their internal processes faster.

Data management can also fuel digital transformation. For a company to integrate artificial intelligence (AI) into their operations, they need to train the system on large datasets in a process called machine learning. Companies can use the AI systems they have trained to automate their routine processes, reducing their workforce, saving recruitment costs, and increasing efficiency.

Furthermore, data management helps companies keep sensitive data secure, thereby making them compliant with data protection laws. Governments have laws that mandate companies to safeguard their customer’s data and can issue hefty fines if there are data leaks that affect customers.

Importance of Database Management

Companies with a business model that depends on their ability to store and retrieve large volumes of data quickly need database management. This applies to airlines, telecom companies, financial institutions, schools, streaming platforms, HR firms, marketing companies, manufacturing industries, and technology companies. They use database management systems to make their data easily accessible and retrievable. 

Database management is necessary because businesses store so much data that if not managed properly can leave them unsecured and not readily available when needed. It can also lead to poor software performance because some applications need to retrieve data from the database to operate optimally.

See also: How to Best Use Your Database: Strategies for Data-Driven Success

What is a Database Management System?

A database management system (DBMS) is a software tool that allows businesses to organize, edit, manipulate, and manage the files in their database.

This tool does not eliminate the need for database administrators. Those professionals ensure databases run as intended. They also control the user permissions for the database and use DBMS to perform the database management tasks mentioned above.


Data management and database management are essential business concepts that help companies make sense of their data and use them for their operations.

If done properly, they can help companies with their business intelligence and make them outperform their competitors. Businesses can also gain insights from their data that will address customers’ pain points and improve their mode of operation.

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Bret Mulvey

Bret is a seasoned computer programmer with a profound passion for mathematics and physics. His professional journey is marked by extensive experience in developing complex software solutions, where he skillfully integrates his love for analytical sciences to solve challenging problems.