Business today moves at a different pace than it did in the past. Today’s professionals and C-suite executives have tools at their disposal that the most prophetic minds couldn’t have dreamt up half a century ago. This is advantageous to those who understand the nuances of modern technology; but stifling for people who aren’t with the times. Companies that don’t adapt to the shifting tides of the new economy will be left behind. This why your business should be familiar with the term data warehouse.
What Is a Data Warehouse?
A data warehouse acts much like a typical warehouse. Instead of holding an organization’s inventory, a data warehouse stores information. The idea of the data warehouse came from IBM in the late 1980s. However, today’s data warehouse isn’t only available to tech companies. Any business that’s interested in safely keeping large quantities of sensitive needs to take interest in data warehousing.
What Information Goes Into a Data Warehouse?
The answer to this question largely depends on the business. At a minimum, a company should want to enter information from its transactions and operations into a data warehouse. These are two areas that can yield some of the most important insights for a business. For example, a company could make inventory or pricing decisions based on revelations from this sort of data. It really makes sense to enter any quantifiable business applications into the data warehouse, as more integrated raw info inherently leads to better decisions.
How Can Your Business Use Data Warehousing?
There are actually many practical reasons why businesses should consider utilizing a data warehouse. Business intelligence is the most obvious of these applications. The more a business puts into a data warehouse, the more it will be able to get out of it. In the past, managers and owners had rudimentary data available to them; but many decisions still needed to be made based on guesswork. Today, the best executives know that they’re not omniscient, and can’t make the best decisions on their own. Business intelligence gained from data warehousing lets objectivity take the place of gut feelings.
Combine Data Sets More Easily
Large corporations or enterprises usually run on a variety of software platforms. Different departments or regional offices often have their own methods of analytics tracking. Both of these conditions can cause major issues for companies trying to implement a strategy based on accurate reporting. By immediately sending all relevant information to a data warehouse, however, business owners can save a lot of time, money and effort putting together a data-driven strategy. Data warehouses also allow key players to compare numbers from otherwise separate entities—allowing for insights that otherwise could have been overlooked.
Combining data sets like this comes with another distinct advantage: Long-term patterns are more easily identifiable if all information is stored in one place. This can be useful in tracking business performance over certain time periods. It can also help executives and managers see trends forming, which is invaluable for building a future plan.
Data Warehouses Pay for Themselves
Making money has to be part of the end goal of any successful business. Data warehouses can help companies make more and spend less. Most businesses that correctly utilize a data warehouse will see a healthy return on investment (ROI). In fact, a study from the International Data Corporation found that 63 percent of observed businesses took two years or less to pay back the investment in data warehousing with profit growth or cost cutting in other areas. This shows the potential upside of using a data warehouse to make more informed decisions.
It’s understandable that business owners might be hesitant to start using a data warehouse. The technology can seem unnecessary or confusing to senior level executives who are used to doing things their own ways. However, the power of data-driven business decisions makes the investment worthwhile.