Does Your Business Need a Data Warehouse?

Business Intelligence, Software Development

With businesses the world over beginning to understand the value of data and the knowledge and insights that can come from data analysis, more and more choose to capitalize on the opportunities that it offers up. A data warehouse is exactly what it says on the label– a repository of data, generally collected from a wide range of disparate sources, which has been transformed and structured in a way that makes it as easy as possible to analyze and generate insights. The question of whether your organization needs a data warehouse will depend on a variety of factors. Let’s take a look at five of the most significant.

  1. How disparate is your data? Bringing in data from a wide variety of sources can prove to be a real headache for businesses. You may need to make sense of data from different databases, spreadsheets, legacy systems and transactional systems, all of which will be structured in a different way. To manually gather together this data is incredibly laborious, even for a small organization. A data warehouse can serve to make this process automatic, drawing in only the most relevant data from these disparate sources

  2. How volatile is your data? Volatile data – i.e. data which isn’t consistently structured – is difficult to gain insight from. Data pulled from from multiple sources will inevitably be structured differently – for example, the data pulled from an Excel spreadsheet is very different to the data found in your business’s database. This can result in separate systems representing the same information in different ways, or apparently identical information between various systems meaning very different things. In order to make sense of it all you need to transform this disparate data into something more uniform, while keeping it correct and relevant. The ETL (Extract, Transform and Load) process of a data warehouse will allow you to do so efficiently and effectively.

  3. Will your business benefit from self-service reporting? Self-service reporting offers up the sort of instant insights that can give an organization true agility, especially when the people creating the reports have deep understanding of the data and the business. The key is to provide access to the appropriate data you so that users can quickly and easily create reports that answer pressing questions, allowing people running the business to make important business decisions quickly and confidently. If you feel as though you’d benefit from the ability to create custom reports on the fly – reports that are outside the capabilities of your present data strategy, or that would require a serious amount of data remodeling – a well-designed data warehouse will help your team generate them.

  4. Does your current data strategy result in inefficiency? If you haven’t really given much thought to data previously, and have just begun the process of deciding whether a data warehouse is worth the investment, you may feel that you don’t currently even have a data strategy. But this isn’t the case. Your data strategy encompasses almost any interaction you have with data, and if data is unstructured and manually pulled from a variety of disparate sources chances are your current arrangement isn’t particularly efficient. If you’ve got large amounts of data and need insights from it in order for your business to function or grow, investment in a data warehouse will make the whole process far more efficient. Data warehousing features such as data transformation and cleansing, aggregations and materialized views are all designed to result in faster performance.

  5. Will your business benefit from data mining? While the four points above all revolve around a business’s need to easily inspect the data and generate reports, a well-designed data warehouse will also allow your organization to ‘data mine’. Data mining is the process of identifying hidden patterns within the data, gaining the sort of insight that gets much of its value from how difficult it is to recognize. Imagine picking up on market trends before any of your competitors, or identifying two products that could be grouped together to maximize profits.

The question of whether or not your organization needs a data warehouse is a complicated one, and the answer will generally be subjective. If you already deal in large amounts of disparate and volatile data then it should be a simple ‘yes’, but for smaller and less data-dependent organizations the water begins to get muddied. If you only handle small amounts of data, and it is generally well structured on the front end, you could certainly get by without a data warehouse. But it must be remembered that you’ll also be forgoing the potential insights that a data warehouse can bring. One thing is for sure – very rarely does a data warehouse prove to be a bad investment.


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