DFD: data flow diagram

Not everybody who has worked in the software development cycle has heard of what a Data Flow Diagram is, or what it does. So, for example, somebody who makes applications such as Windows or Office or PhotoShop may not need to know what a DFD is. However, for a team that is designing an application for a bank or for a shopping application that involves a lot of data, it is essential to map the data flow. Hence, a Data Flow Diagram (DFD) is an essential component for the design of a large number of software applications, and if you don't do the DFD well, then the system may not end up having been designed well, and may end up being less efficient than it was supposed to be.
So, what is a DFD ? A brief definition and description:
DFDs were first used in the software engineering field as a notation for studying systems design issues. A data-flow diagram (DFD) is a graphical representation of the "flow" of data through an information system. DFDs show the flow of data from external entities into the system, showed how the data moved from one process to another, as well as its logical storage. A data-flow diagram can also be used for the visualization of data processing (structured design).
Data flow diagrams can be used to provide a clear representation of any business function. The technique starts with an overall picture of the business and continues by analyzing each of the functional areas of interest. This analysis can be carried out to precisely the level of detail required, leading to a data flow diagram that is strong in illustrating the relationship of processes, data stores and external entities in business information system.
Complicated information systems have lots of data flows which can be presented in a form of a data flow diagram. Without such data flow diagram you just can't visualize all data flows and won't be able to analyze and improve the whole system. Data flow diagrams represent data flows in a clear visual way as arrows between blocks which represent parts and processes of the system. Identifying the existing business processes, using a technique like data flow diagrams, is an essential precursor to business process re-engineering, migration to new technology, or refinement of an existing business process.
Sounds complicated, so the next few posts will detail the steps to making a data flow diagram, what are the benefits for this diagram, and some tools that will help in generating a data flow diagram.