Why Data Warehouse

Introduction

Chances are that you have heard of data warehousing but are a little fuzzy on exactly how it works and whether your organization needs it. It is also highly likely that once you fully understand exactly what a data warehouse can do, you will decide that one is needed.

Data warehouses are widely used within the largest and most complex businesses in the world. Use with in moderately large organizations, even those with more than 1,000 employees remains surprisingly low at the moment. We are confident that use of this technology will grow dramatically in the next few years.

In challenging times good decision-making becomes critical. The best decisions are made when all the relevant data available is taken into consideration. The best possible source for that data is a well-designed data warehouse.

The concept of data warehousing is deceptively simple. Data is extracted periodically from the applications that support business processes and copied onto special dedicated computers. There it can be validated, reformatted, reorganized, summarized, restructured, and supplemented with data from other sources. The resulting data warehouse becomes the main source of information for report generation, analysis, and presentation through ad hoc reports, portals, and dashboards.

Building data warehouses used to be difficult. Many early adopters found it to be costly, time consuming, and resource intensive. Over the years, it has earned a reputation for being risky. This is especially true for those who have tried to build data warehouses themselves without the help of real experts.

Fortunately, it is usually no longer necessary to custom build your own data warehouse. The heavy lifting has already been done by others. Prebuilt solutions are now available that dramatically reduce the effort and risk. As a result, the time has come for organizations to develop a thorough understanding of data warehousing. The goal of this paper is to take the mystery out of this subject and present the case for data warehousing in simple business terms. What you will learn is likely to pleasantly surprise you.

The Business Case for Business Intelligence

Managing a business has never been easy. Trying economic conditions make it even harder. The challenge is to do more with less and to make better decisions than competitors. Having immediate access to current, actionable information can make a huge difference. It is the reason why spending on Business Intelligence (BI) solutions has continued to grow during a severe economic downturn.

Executives cannot afford to make decisions based on financial statements that compare last month’s results to a budget created up to a year ago. They need information that helps them quickly answer the basic questions: What still works? What continues to sell? How can cash be conserved? What costs can be cut without causing long-term harm?

Business intelligence systems provide the ability to answer these critical questions by turning the massive amount of data from operational systems into a format that is current, actionable, and easy to understand. They provide information that is decision ready. They allow you to analyze current and long-term trends, alert you instantly to opportunities and problems, and give you continuous feedback on the effectiveness of your decisions.

BI is not a new idea. The largest and best-managed organizations in the world have been making use of it for more than a decade. Along the way, the giants that pioneered BI made an important discovery – the path to true business intelligence passes through a data warehouse.

The Connection between Data Warehousing and Business Intelligence