Data Warehousing – What is it?
A data warehouse is a central repository of information that can be analysed to make better-informed decisions. Data flows into a data warehouse from transactional systems, relational databases, and other sources, typically on a regular cadence. Business analysts, data scientists, and decision-makers access the data through business intelligence tools, SQL clients, and other analytics applications.
Data and analytics have become indispensable to businesses to stay competitive. Businesses use reports, dashboards, and analytics tools to extract insights from their data, monitor business performance, and support decision making. These reports, dashboards and analytics tools are powered by data warehouses, which store data efficiently to minimize I/O and deliver query results at blazing speeds to hundreds and thousands of users concurrently.
The Purpose of Data Warehousing
Data warehousing is also known as an Enterprise Data Warehouse (EDW), this should be used to provide an all-encompassing view of your organisation from whatever viewpoint you are interested in. The warehouse itself can be a logical design that includes multiple data marts servicing different areas of the business.
The Basic Components of Data Warehousing
A Datawarehouse stores data that is extracted from data stores and external sources. The data records within the warehouse must contain details to make it searchable and useful to business users. Taken together, there are three main components of data warehousing:
- Data sources from operational systems, such as Excel, ERP, CRM or financial applications
- A data staging area where data is cleaned and ordered
- A presentation area where data is warehoused
Data analysis tools, such as business intelligence software, access the data within the warehouse. Data warehouses can also feed data marts, which are decentralized systems in which data from the warehouse is organized and made available to specific business groups, such as sales or inventory teams.
Why Do I Need Data Warehousing?
A data warehouse can be implemented to help avoid any various challenges. In an age of serious competition, it isn’t ideal to make decisions alone, it must be taken on time, if you run out of time you will view your competitors getting ahead.
For example, if said supermarket chain has not implemented a data warehouse eventually the supermarket finds it very difficult to evaluate which products sold, which products did not sell, what is the age group of people buying the product and several other queries. If a product didn’t sell well, it needs to be analysed why that selling value subsided and what steps will need to be taken to analyse the issues surrounding it.
If we are talking about a company’s strategic value, every company solicits certain products from a supplier, before making a purchase the company will contact the supplier to negotiate the price, etc. This brings into question will the supplier adhere to the terms and conditions are given? When your company has made the purchase, the supplier will issue you with an invoice. If the invoice shows that the discount has not been given as agreed, not matching the terms of the contract, then the two could discuss the same.
This is why your business needs data warehousing, when a company executive needs to make decisions, with the data at their disposal, it is important to consider any fact-based decisions given.
Benefits of Data Warehouse
A goal common to all businesses is to make better business decisions than their competitors. Once a data warehouse is implemented into your business intelligence plans, your company can benefit from it in many ways.
- Better Decision Making – Corporate decision makers will no longer have to make important business decisions based on limited data and hunches. Data warehouses store credible facts and statistics, and decision makers will be able to retrieve that information from the data warehouse based on their personal needs. In addition to making strategic decisions, a data warehouse can also assist in marketing segmentation, inventory management, financial management, and sales.
- Quick and Easy Access to Data – Speed is an important factor that sets you above your competitors. Business users can quickly access data from multiple sources from a data warehouse, meaning that precious time won’t be wasted on retrieving data from multiple sources. This allows you to make quick and accurate decisions, with little or no support from your IT department.
- Data Quality and Consistency – Since data warehouses gather information from different sources and convert it into a single and widely used format, departments will produce results that are in line and consistent with each other. When data is standardized, you can have confidence in its accuracy, and accurate data is what makes for strong business decisions.