To put it simply, a data warehouse is a database of an organisation’s multiple databases. The elaborate further, a data warehouse is a consolidation of data based on different subject matters over a period of time pulled together from different internal and external sources and department’s within an organisation for the purpose of analysis, discovery, reporting, and, finally, decision-making. The role and importance of data warehousing has increased rapidly with technological advancements, and as more and more enterprises focus on operating on the basis of insights derived from data-driven business strategies that favour an integrated, holistic approach to data. In some ways, a data warehouse enables decision-makers to arrive at a single version of truth that informs the business objectives and every activity undertaken by every department in service of those objectives.
As we careen towards an intensely competitive world with sky-high expectations of customers from their products and services, thanks to massive leaps in the field of technological innovations, businesses are facing heat to not just make the right and lucrative financial decisions, but to make them in record time. This can be made possible only when the right kind of data warehouse is implemented. While every organisation may have different goals and needs from their warehouse, generally speaking, data warehouses provide the following benefits to enterprises.
Speeds up response time
Since data warehouses pull different data sets from different sources on a variety of subjects and then standardise it into a single set that can then be distributed across departments, decision-makers are able to take strategic, fact-based decisions that are compatible with each other at a much faster pace, instead of each department taking a siloed approach to data and sometimes working at cross purposes. Another major way in which data helps businesses is by allowing them to regroup and redesign business processes and operations, if after analysis they find that their cross-purposes with the business strategy, which can often be the case when departments are using different, unrelated, or outdated data sets to base their decisions on.
Faster and more flexible reporting
While on the one hand data warehousing makes it possible to collect, consolidate and create reports in real time, on the other, it creates a repository of historical information on all the variables that affect profitability. This faster and flexible data reporting mechanism makes it possible for organisation’s to routinely undertake comparative and competitive analysis to gauge the efficacy of the services being provided by them, level of customer satisfaction, slow-moving products or non-performant assets, areas for improvement, find errors before they can cost the company a major loss in terms of money or reputation, identify market trends, and introduce product lines that are in line with emerging customer needs and far ahead of the competition. All these in turn improve the bottom line of the enterprise.
When the process of collection, analysis and consolidation of data is simplified, and the subsequent data set is made easily accessible to all, it can result in significant savings for the company due to reduced operational and IT costs. Automating the process with the help of data warehousing tools reduces the organisation’s dependency on staff dedicated to reporting and maintaining the IT infrastructure, especially when the data warehouse is cloud-based, not on-premise. Another way it reduces costs is by helping the management to make decision to drop non-performing products without wasting too much time.