System of record

A system of record is the one database a business treats as the official version of something. Orders are in the ERP, deals are in the CRM, and hires are in the applicant tracking system. When two systems disagree about a fact, the system of record is the one that is correct.

Here is how it works in general. For each kind of fact, a company chooses one system to hold it. Every other system that needs that fact either reads it from the system of record or keeps a copy that is updated from it. Changes are made only in the system of record, and then passed on to the copies. So if two places show different values for the same customer or order, the business knows which one is correct. It also means that reports, audits and legal requests use one trusted source.

Without one, the same fact has two values. The invoice goes to the old address while the customer record shows the new one. Two reports add up to different totals, and the meeting turns into an argument about which is right. The system of record is chosen as the system where the fact is created, not the one that is most used. A company has different systems of record for different facts. Copies drift apart if updates fail, so the two are compared from time to time, which is the work described under reconciliation.

Take, for example, a company's customer details. The customer relationship system holds the official address, and a billing system copies it. When a customer moves, the address is changed once in the first system. Consider employee data. The human resources system holds each person's pay and role, and the payroll system reads them; see the employee record as root. For instance, an accounting system is the record of the books, and a tool that shows dashboards only reads from it.

Such systems include ERP suites, CRM, core HR and payroll and enterprise content management. Because they hold the official data, they are slow to change; see installed base. The integration between them is described in business process chains and reconciliation.

How is it different from a data warehouse? A warehouse copies data from many systems to analyse it. A system of record is the place where the data is created and corrected.