Author: John Blake

Data warehouse?

Data is extracted, transformed from multiple data sources and loaded (ETL) into a separate database, called a data warehouse.

The recent fame of data warehousing technology as a management technique advocated by various data warehousing associations and business groups would seem to entail on the whole positive aspects of using the process as a business model. However, not every system is appropriate for every business setting. Business owners should fully research the pros & cons of data warehousing before attempting to implement the strategy.

Data Warehousing - Why?

Data warehouses tend to have a very high query success as they have complete control over the main areas of data management systems:

Clean Data:

All data warehousing organizations enjoy better end-user access to business information that is related to company affairs. In a today's highly competitive world, the ability to carefully analyze information is key to the company's overall success or failure.

Access to Data:

One of the best advantages to using a data warehouse is that users will be able to access a large amount of information. This information can be used to solve a large number of problems, and it can also be used to increase the profits of a company. The data that is accessed is consistent, relevant and organized in an efficient manner.

Multiple Data:

One powerful feature of data warehouses is that data from different locations can be combined in one location. When data is taken from multiple sources and placed in a centralized location, an organization can analyze it in a way that may allow them to come up with different solutions than they would if they looked at the data separately. Data mining is connected to data warehouses, and neural networks or computer algorithms are responsible. When data is analyzed from multiple sources, patterns and connections can be discovered which would not be found otherwise.

Easy report creation:

With the use of data warehousing technology, business departments will find it easier to create reports of all types, like financial statements, that are highly significant to both day-to-day operations and yearly accounting. If it is not used in any other segment of the business, data warehousing in accounting offers tremendous benefit.

Access and Flexibility:

One of the major benefits of data warehouses are ease of access and flexibility of use for key corporate data. There are, however, downsides to achieving that level of usage.

Data Warehousing - Why Not?

Time Constraint:

The major disadvantages of data warehousing is the time required and the need to create a cohesive, compatible system of data collection, storage, and retrieval. There is long initial implementation time and associated high cost. Before data can be stored within the warehouse, it must be cleaned, loaded, or extracted. This is a process that can take a long period of time.

Data Transfer Issue:

However, there are considerable disadvantages involved in moving data from multiple, often highly disparate, data sources to one data warehouse that translate into long implementation time, high cost, lack of flexibility, dated information, and limited capabilities:

Cost Issues:

Adding new data sources to data warehouse takes time and associated high cost

User Flexibility Issues:

Limited flexibility of use and types of users requires multiple separate data marts for multiple uses and types of users

Data Issues:

Typically, the data in the data warehouse is static and dated. There are no data drill-down capabilities. Typically, cannot actively monitor changes in data

Manipulation Issues:

It is difficult to accommodate changes in data types and ranges, data source schema, indexes and queries

Maintenance Issues:

Any organization that is considering using a data warehouse must decide if the benefits outweigh the costs. Once you have paid for the data warehouse, you will still need to pay for the cost of maintenance over time. The costs involved with this must always be taken into consideration. One of the most common data warehousing issues pertains to the need to regularly extract, clean, and load data into the system. Even though this process is fully automated, it still consumes time as do regular maintenance.

Compatibility Issues:

There are issues with compatibility. For example, a new transaction system may not work with systems that are already being used. Users who will be working with the data warehouse must be trained to use it. If they are not trained properly, they may choose not to work within the data warehouse. If the data warehouse can be accessed via the internet, this could lead to a large number of security problems.

Security issues:

Data warehousing may contain security flaws. If the database contains sensitive information, its use may be restricted to a limited group of people and precautions will be required to insure that access is not compromised. Limited data access situations can also effect the overall utilization of the data strategy.

Final Thoughts:

Data warehouses are a vital tool today, and more companies will begin using them in the future. Companies that use data warehouses need to have detailed information that is related to the transactions that take place within the group. When a company is able to scrutinize detailed information that is related to its own operations, the company can make strategic decisions.

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