What is a Data Warehouse and what are the business benefits of having one?

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When I’ve worked with customers on the best way to deliver their business intelligence requirements, the conversation normally starts around the outcome they want – normally things like visual dashboards to be able to see and interrogate their data to understand what has happened over time – but quickly the conversation shifts to what needs to happen with their data to make that end goal possible. Depending on how complex a business is, and how much data might be in play, this is normally the point when the idea of a Data Warehouse emerges.

Data Warehouse is a name that conjures up an image of a massive amount of data being stored in one place – all tidied away on miles of shelving. There is a bit of truth in that analogy, but it doesn’t tell anywhere near the whole story and it certainly doesn’t help to understand how data warehousing can be so beneficial to your business.

A data warehouse is indeed a big repository of data stored in one place but it’s what then happens to that data that makes a warehouse valuable. A data warehouse pulls raw data in from your different systems and spreadsheets, joins data together from those systems, transforms it and models it into a form that is designed to make business intelligence and reporting simple, and then makes it available to people building reports and dashboards.

In reality, it’s less a Data Warehouse and more of a Data Refinery – taking in raw materials and transforming them into something truly useful and valuable. Mathematician Clive Humby might well have had this image in mind when he famously declared “Data is the new oil” back in 2006.

That’s hugely simplified but hopefully captures the essence of what a Data Warehouse does without getting bogged down in how it does it.

Now we’ve talked briefly about what a Data Warehouse is, here are 5 big benefits to your business of actually having one:

1) Efficiency
A good data warehouse automatically pulls together data from across your business and joins it together which massively reduces the manual effort most businesses put in every day, week, or month to get data out of systems and turn it into meaningful reports.

2) Insight Over Time
A good Data Warehouse captures the changing states of pieces of data in snapshots over time so you can go back and see the exact state of things at any point. This helps to understand trends in your data and starts to open the door to more advanced analytics, including being able to start using historic data to predict what might happen next.

3) Single Version of the Truth
Everyone reports from the same curated set of data. This stops people arguing over who’s figures are correct and wasting huge amounts of time and effort to often recreate the same queries and reports. As a result there is usually much greater trust and confidence in business intelligence.

4) Data Quality
You can do a lot to automatically clean up your data on the way through a Data Warehouse so that some of the quality issues that can cause havoc in reports get fixed and people in your business don’t get misleading data that erodes confidence and can cause the wrong decisions to be made.

5) Data Security
Rather than having to give people access to whole screens full of highly sensitive data in your source systems in order for them to produce reports, a warehouse will aggregate data so users only see high level figures and numbers rather than all of the raw data that goes to make those numbers up. For example, your Board might want to see how much sickness absence there has been in the business this quarter, but they shouldn’t need to see who took that time off and why.

Building a data warehouse can be a daunting prospect but there is a huge amount of value to be had from it, and the work can be broken down into manageable blocks that deliver value quickly. It won’t be the right fit for every organisation, and there are other tools available to suit different scenarios, but it can be a hugely powerful tool to drive good insight and decision making.

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