Since ERDs are of great use for designing a hospital management system, here we are going to walk you through the steps of designing an ER diagram for your hospital management system. Step 1: The first step is to identify the entity sets. The second step is to map out the attributes of the entities. Identify the type of relationship that exists between the entities. Once you have identified all the relationships, it is time to map out the lines. The last step is to combine all the relationships and draw a complete ER diagram.