Software company should set up the testing environment meanwhile gathering test data. The test data environment should allow enough resources, to contain and process all the test data specially if it is done by utilizing full copy of production data. The test data can be gathered in different formats and from different databases which are geographically separated. If the data is extracted directly from live environment, it is highly possible that the extracted data include confidential data with it. This may not be possible to avoid but, can be handled by following the best test data management procedures such that test data privatizing procedures (also known as test data masking). It is recommended to collect good combination of test data that can represent various scenarios of live environment. This assures that the software is tested on every possible concerns.
Unusable and unreliable test data is a major concern for many software testing teams. Collected test data may include duplicate data that may or may not be possible to identify straightaway. For example a personal name may have saved by using initials at one database but in other it is recorded as full name. Concerns like that delay the software testing phase significantly. These are few reasons why many software companies use tools for software testing processes. The tools can be but not limited to profile test data, identify duplicate test data and remove, detect confidential test data and privatize, manage testing environment, automate creation of test data, test cases etc. Benefits of using these tools like DataHotSpot (to analyze the data security, to do data profile so on), DataView (to have effective test data management, handle test data bookings, test data governance etc), EcoSystem (for environment realization, planning & coordination, lean service management, reporting, automation of processes etc) can save time, costs and efforts. Overall, the use of automation tools boost quality of software testing phase which results high quality software product.
Source : http://enov8.jimdo.com/2014/04/22/the-best-practices-to-manage-test-data-and-software-testing-phase/