The Benefits Of Having A Data Warehouse
Since the advent of the Internet and the explosion of digital marketing, the potential for creating and using data has grown exponentially. In the 1990s, Bill Inmon published a book called “Building the Data Warehouse,” which introduced the modern concept of data warehouses. According to the book, “Data warehouses provided a much-needed strategy for organizations to collect, store, and analyze vast amounts of data. As businesses expand both brick-and-mortar and online activities, the field of data warehousing has become increasingly important.” Data warehouses provide an easy way to peruse vast stockpiles of information in order to discover pertinent facts about customers or products, which in turn can lead to more informed business decisions. For example, if you wanted to analyze a specific department, such as “sales” or “marketing,” you could do so with information extracted from the data warehouse.
A 2010 Forbes Insights study found that “data-related problems cost the majority of companies more than $5 million annually,” and costs 20 percent of companies more than $20 million annually. Utilizing a data warehouse can help ensure that the data being analyzed is accurate and consistent.
Because assembling a data warehouse can be an expensive undertaking, large corporations and companies are the primary warehouse customers. However, small businesses can gain many important benefits from creating their own data warehouse as well.
First, data warehouses can save companies’ valuable time by storing important information in the same location. Rather than keeping data in several different places (such as inside CRM programs, social media accounts, and Excel spreadsheets), business owners can store data in one centralized location. As a result, they can harness this centralized data to enhance strategic decisions, without having to aggregate different sources. Data warehouses can also save money as business owners and executives can search the data without extensive assistance from the IT department.
Second, companies can benefit from storing their data in the same format. Since data from different departments is standardized, each department will create results that are in sync with other departments. This ensures data quality and uniformity. As a result, business owners and executives can feel confident that their data is accurate, which will lead to more informed business decisions.
Third, data warehouses can improve business intelligence. Because the data warehouse combines information from various parts of the business, owners and executives can feel confident that their decisions are being made based on comprehensive information. Data warehouses can provide a full picture of a company’s marketing and financial plan, inventory management, and sales history. This allows key players to make decisions that are based on facts rather than intuition.
Forbes magazine stated, “While it’s true that data warehouses have been around for years, their value keeps growing because they represent a company’s crown jewels—prized data on customers and business performance.” For example, health care providers use information gleaned from data warehouses to streamline patient care and improve service. Marketing teams can use information collected in the data warehouse to make sure they are targeting the right demographics. Executives can use the data to streamline operations or reevaluate products.
Companies who want to create a data warehouse can start by figuring out what their business objectives are and how having a data warehouse will contribute to these goals. Next, they should choose a database management system for their data warehouse. Then, they need to construct a data model and plan the data transformation. Afterwards, businesses need to begin testing the plan to see what needs to be tweaked or changed.
WIRED magazine stated that Google spent years working to successfully master sophisticated data warehouses. Writer Steven noted, “Google knows exactly what it needs inside its rigorously controlled data centers—speed, power, and good connections—and saves money by not buying unnecessary extras. No graphic cards, for instance, since these machines never power a screen.” Small businesses should consider their business objectives and needs in order to create a data warehouse that’s right for them.
Data warehouses not only save time and energy through stockpiling data in one centralized location; they also guarantee that the information provided will be more accurate and reliable than data gleaned from other sources. Businesses that are serious about utilizing technology to their advantage should consider creating their data warehouse.
By Keith Cawley