A few years ago, organizations were using their regular database to run SQL queries for analytics. However, the massive increase of the size and amount of data flowing from various sources has led the traditional database take a backfoot, as it is not able to handle the amount of data and is extremely slow at processing queries.
To address this, modern organizations have turned to data warehousing: a central data storage, aka “single source of truth,” that helps to sort data which stems from various sources like marketing, sales, finance etc. and displays it on a single cumulative dashboard. There are many businesses who hesitate to adopt data warehousing technology, perhaps thinking it might not be useful as a part of their data management strategy, but a data warehouse but can make your operations and data storage smooth, among other benefits. Before diving into what data warehouse does for a business, let us first get into the basic & understand what is a data warehouse?
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What is Data Warehouse?
A data warehouse aka Enterprise Data Warehouse (EDW) acts as an organization’s central repository to support data analysis and reporting of integrated data. It helps to modernize corporate data usage through robust and scalable infrastructure.
Why Does an Organization Need Data Warehouse?
All organizations have different requirements when it comes to maintaining a single repository. Whatsoever they may be, there are a few benefits that data warehouse brings to the table.
- Faster response time- A data warehouse collects various data from a number of sources within an organization e.g., finance, marketing, sales etc. in order to preserve a single source of truth. These data are refined data that can be used by the business to make strategic decisions at a faster pace, instead of using a siloed approach to collect data from each department and creating a fact-based decision, which can be time-consuming.
- Enables data quality and consistencies- as data warehouse gathers data from multiple sources, all the data from respective departments is standardized and is related to all the other departments. As the name suggests, the “single source of truth” automatically enables data quality and consistencies.
- Generates more ROI- in today’s time, data is more important for the organizations to sustain a competitive advantage. So, having a superior quality of data is a key strength for an organization and having a data warehouse, which helps to make various key strategic decisions, is something which is unavoidable and mission critical.
- Offers enhanced business intelligence- The insights gathered from data warehousing improves access to information so that organizations do not make any decisions based on incomplete information. Decisions that might affect strategy and operations can be based on data-driven facts and relevant organizational information. It keeps business leaders better informed about data queries and this they can retrieve information based on their specific needs.
- Provides a competitive edge- It can be the bottom-line benefit of any organization that data warehouse has to offer. It allows businesses to strategize and execute against other competitors more efficiently. Along with quality, speed, historical context, and other benefits provided by a data warehouse. It certainly adds to the bottom line of any business by creating more sales, targeted products, and faster response times. Which can help improve business decision making and offers a key competitive advantage.
- Helps Data Mining- As data warehouses collects data from various sources and consolidate into a single platform. Therefore, it enables users to find out hidden patterns and trends which are beyond simple analysis and tries to figure out future trends leveraging automatic methodologies.
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Do Organizations Need a Data Warehouse?
The need for an integrated insight is by far one of the most crucial drivers for investing in a data warehouse. Considering the above benefits, it is quite evident why is it important for businesses to have a data warehouse. The primary purpose of having a data warehouse is that it offers a substantial increase in competitive strategy by allowing businesses to make smarter, metric-based, well informed decisions Therefore, it seems that it is unlikely for an organization can compete or sustain in today’s market without an advanced data warehouse.