Why Business Organizations Rely On Entity Relationship Diagram?

• By Daniel Chris
• 03-01-2020
• Technology

As a business you’d have surely heard and read about ER diagram or Entity Relationship Diagram. They are also known as ED Model. By the dictionary definition they show the relationship between different entity sets that are stored in a database. But that’s just the theoretical definition of an ER diagram and on the practical side of it businesses find several uses of these diagrams. For instance an ecommerce site can use to this to project its future sale to a customer based on the current relationship or an insurance company can find out the likely renewal rate for its plans using the diagrams.

The fact that these diagrams offer a blueprint underpinning the business architecture they are very useful in a competitive business environment. The management team in organizations can implement important business decisions based on facts and information looking at these diagrams instead of doing so based on assumptions. Let us now take you through some of the reasons why businesses rely on Entity Relationship Diagram and how they put it to practical use.

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The first and the foremost reason for organizations relying on ER diagram is the fact that they offer visual representation of important information. As you already know human brain tends to better read charts and visuals as compared to data or a long report of texts and numbers. A quick glance trough these diagrams are enough for the management team to identify the broad trends in their business and the market factors that would impact sales and revenue in the future. There is no need for the team to dig through tons of data to get an overview of the market when they have ER diagrams.

Data Management

Based on the type of business you run and the size of your organization and customer base you’d be generating data from dozens of different sources. From sales data to demand forecast from your vendors and the customer support services offered, at every touch point your business is gathering data that has answers to the future of your business and its growth. Entity Relationship Diagram is beneficial in managing data from different sources effectively. Taking data from different sources your design team can create accurate designs representing the information as per the requirements of your organization.

Team Collaboration

The easy representation of data and trends in entity relationship diagrams improves collaboration within the organization. There is effective flow of information in the charts and tables used in these models and this allows better communication from the team leaders to their members and between different teams within the same organization. The symbols are easy to read and boxes in different shapes help concerned teams to develop better understanding of the information. This allows quicker decision making among different teams helping the business cause.

There are several online tools that help you create these diagrams and it is important for you to choose one that offers you the most user-friendly UI and facilitates team collaboration. The tool you choose should also allow for easy revision of the data and let you export these diagrams in different formats for both online and offline usage.