Today, more industries wonder if they still need a data warehouse and if it is worth their investment. They also want to check whether or not alternatives are available.
What’s more, many industry experts and IT suppliers of data virtualization tools, data discovery tools, and data warehouse appliances believe that data warehousing will be obsolete.
However, data warehousing still serves as the heart of business intelligence organization and helps you fulfill various company goals.
Here are five specific reasons you need a data warehouse for your organization.
1. Data Warehouses Help You Make Sense of Your Data
A significant portion of what enables data accessibility and ease of use is its manner of storage.
The way data is stored should be technically compatible with your systems. Data formats should also make sense.
Whether you’ve set up a single-screen business intelligence (BI) dashboard or work from several systems, your data still becomes inaccessible and burdensome to use if you have no data warehouse in place.
You won’t get the answers you’re searching for, such as the reasons for why your content isn’t converting, if this happens.
A data warehouse serves more than merely holding your data. It stores raw data that developers have managed in a way that makes sense for your company.
The data warehouse gathers data from multiple sources, including your business applications, then standardizes and sorts them in a manner that’s understandable and easily accessible for your reporting systems.
Once the data warehouse integrates the data into your system, it presents these records in user-intuitive formats — be it a spreadsheet, single-screen BI dashboard, or others.
The mere implementation of your BI software without data warehouse usage is not a guarantee that your data will be timely, dependable, and quick to find. You need to organize, restructure, and rename your raw data to make it logical for your users.
2. Data Warehouses Integrate Multiple Data Sources
Another reason you need data warehouses is their ability to integrate multiple data sources across your organization.
If you set up your data warehouse correctly, it can receive real-time information and give you an overview needed for analyzing and tracking reports and making better decisions.
That probably sounds like something your BI software can offer even without a data warehousing system.
However, with a warehouse, you don’t need to test or rewrite reports when your solution requires an update.
Your data remains as safe and structured as when you set them up initially — even if you revamp your CRM, accounting, Human Resource or HR software, and other apps. That’s because you already established your warehouse in that manner.
Data warehousing systems also iron out data formatting issues that come with integrating data from various sources.
Data systems often release data in several different formats. For example, dates can be in words, numerical form starting with the year (e.g., 20170811), with or without periods, dashes, or right forward slashes between month-day-year figures, etc.
Data warehouses can extract those details, merge, and convert them into quickly retrievable and consumable formats.
Additionally, data warehouses can store all historical data in a centralized, easily accessible place (end-user applications can’t do that due to memory limits and other restrictions).
Data warehousing systems can track changes and give you a complete record of them, including additions and deletions.
3. Data Warehouses Enhance Efficiency
A data warehousing system can boost your team’s efficiency because of the way it stores and retrieves data.
Data warehouses can turn production data, such as those from powerful product analytics tools, from a high-speed data entry model to one that supports high-speed retrieval.
For one, data consistency makes retrieval much quicker for your end users — as mentioned in the example of the formats of dates.
Warehouses can tag and categorize data to help users find their needed information without IT assistance, saving an enormous amount of time and resources.
Data warehouses also optimize your efficiency because of faster data retrieval.
Generating reports directly against operational systems can result in performance issues. However, that won’t be a problem when using data warehouses since they store information separately from the program you use to produce reports.
Additionally, data warehouses streamline historical information searches because the datasets are in one place only with readable formats. This results in quicker report generation.
When picking a warehouse system for your company, though, note that these tools vary in their performance and efficiency — that is, the speed of giving your desired data upon querying it. Caching, ingestion, tuning, etc., are other performance aspects to consider.
For instance, if you compare Redshift vs BigQuery, the latter has a cost-based query optimization type, while the former has limited cost-based optimization capacities.
In terms of tuning, BigQuery lets you buy or serve flex slots only, and Redshift has a limited choice of node types.
List your business requirements and your ideal warehouse platform’s features and capabilities. Doing so guides you in choosing the best system for your company.
4. Data Warehouses Drill Down and Obtain Additional Insights
Data warehousing systems sit between your BI solution and your company-used source applications.
Although warehouses exist to keep massive data volumes in a consolidated location, they also clean and classify data properly.
Setting up data warehouses creates an ideal opportunity to absorb some of your data, i.e., develop metadata for further insight.
These metadata enable you to drill down into details about your data and, in turn, help users glean additional insights or uncover hidden ones.
That is where the “magic” happens: seemingly unrelated information, once merged, reveals business trends crucial for decision making, such as optimizing your resources to purchase articles online for your marketing initiatives.
You can liken metadata to DNA, serving as the genetic makeup of your datasets. Without metadata or your data warehouse, you can’t perform data mining and obtain valuable information.
5. Data Warehouses Increase Information Security
Using data warehouses empowers you to transmit and keep data in one location, which often lives on its server.
That means four sources back your data:
# The original source
# Its backup
# Your data warehousing system, and
# The backup for the warehouse.
A data warehousing system also simplifies sharing particular files with specific users and restricting access. You can control your provision of information only to people with relevant assignments, plus the actions that they can do with it.
By enabling you to do those things, data warehouses help you protect your business data and strengthen your cybersecurity.
Invest in High-Quality Data Warehouses Now
Include data warehouses in your data management arsenal to get maximum value from your collected and stored information. Doing so can help you learn how to apply game-changing insights for customer engagement, stronger competitive edge, etc.
So, start looking for the best warehouse platform that matches your business requirements, and invest in one as soon as possible. You won’t regret it.
