What is a Transactional System & Database?

Transactional systems are databases that record a company’s daily transactions. The three major transactional databases include CRM (customer relationship management), HRM (human resources management), and ERP (enterprise resource planning). For instance, a sales transaction would be recorded and stored as a piece of data in the CRM database.

Transactional systems are not considered optimal for business intelligence. This is for a variety of reasons, including the fact that a) data is not optimized for reporting and analysis and b) querying directly against these databases may slow down the system and prevent the databases from recording transactions in real time.

In some cases, companies use an ETL tool to collect data from their transactional databases, transform them to be optimized for BI, and load them into a data warehouse or other data mart. The main downside of this approach is that a data warehouse is a complex and expensive architecture, which is why many other companies opt to report directly against their transactional databases.