What is a Data Warehouse – Definition, Example & Benefits

By |2021-07-13T07:26:07+00:00June 3rd, 2019|

Business Intelligence (BI) may not tell you what to do about your business or what will happen if you follow a certain direction. But, it provides a way for you to analyze data to recognize trends and derive actionable insights. However, to operationalize business intelligence and develop a data-driven culture, businesses must simplify access to accurate, unified, and real-time data. And this is where data warehousing comes in.

In this article, we’ll begin by sharing the data warehouse definition with examples and then explain its key benefits for businesses.

You will learn:

  • Definition of a data warehouse
  • Benefits of having a data warehouse
  • Examples of a data warehouse
  • Types of data warehouses used in enterprises

Data Warehouse Definition: What is Data Warehousing?

Data Warehouse Definition:

Data Warehousing is the process of collecting, organizing, and managing data from disparate data sources to provide meaningful business insights and forecasts to respective users.

A data warehouse  (DWH) is defined as a central repository of data stored from an extensive range of sources within and beyond the enterprise. Data warehouse a technology that combines structured, unstructured, and semi-structured data from single or multiple sources in order to deliver a unified view of data to analysts and business users for improved BI. Therefore, it is used for analytical and business reporting purposes, which helps in keeping past records, analyze data to optimize business operations.

It is also important to differentiate between a database and a data warehouse as often people often confuse the two. While a database is merely a conventional technique to store data, the latter is a type of database that’s specially intended for data analysis. It stores everything in a single location from numerous external databanks.

Data warehouse explained

Data Warehouse Definition and Explanation (Source: Monitis Blog)

Data Warehouse Examples Explained

Data Warehouse has numerous real-world applications in the corporate world. Here are a few examples of how data warehousing is used across various industries.

In retail:

For the retail industry, a good example would be a retail data warehouse that incorporates customer information from the cash registers, mailing lists, websites, and feedback cards. Similarly, another relevant example of the application of a data warehouse is the healthcare sector that uses it to access the patient’s reports, share important data with insurance providers, predict outcomes, etc.

In healthcare:

Data warehousing in healthcare would be used to record patient information from different units of the medical unit. This would include patient personal information, financial transactions with the hospital, and insurance data. All this is consolidated in the data warehouse and connected through the database schema.

In construction:

Similarly, in construction, the construction firms require data of every purchase made during the construction timeline. This purchase needs to be attributed to a source so to make financial decisions. The same goes for the wages of contractual employees.

All this data will be recorded in a data warehouse and later used for business visualizations to estimate the overall spending of the company on a single construction site. 

In finance:

Banks, insurance firms, trading firms, and others related to the finance sector need accurate data at all times. This is only possible when the data in the databases is validated properly and appropriately connected with other tables in the database.

These are just some examples of how data warehousing is used widely in different industries and for varying purposes. Since a data warehouse is just an organized store of data, it can serve many purposes for the end-user.

Types of Enterprise Data Warehouses (DWH)?

There are three main types of data warehouse (DWH) mainly used in enterprise systems. These are the enterprise data warehouse, operational or functional data store, and unit-specific data mart or data lake:

  1. Enterprise Data Warehouse (EDW): As a centralized data warehouse, EDW provides a holistic approach to organize and present data.
  2.  Operational Data Store (ODS): ODS is a data store for neither the OLTP nor data warehouse can support a business’s reporting requirements.
  3.  Data Mart: A data mart is designed for departmental data, such as sales, finance, and supply chain.

Data Warehouse Benefits For Organizations

Now that we are aware of how a data warehouse works, it is time to know the benefits of a data warehouse and how exactly it can help your business grow and scale. Whether you own a digital marketing agency or have a traditional brick and mortar setup, data warehousing can yield several benefits for your business.

Below are 7 key benefits of data warehousing for your business:

1. Data Warehousing Saves Time

In the modern fast-paced world of cut-throat competition, your capacity as a business to swiftly make refined decisions is essential to outpace your opponents.

A data warehouse provides you access to all your required data in a matter of minutes. So, you and your employees don’t have to dread an approaching deadline. All you need to do is use your data warehouse to acquire data within seconds. And most data warehouse building solutions allow you to do that without using a complex query or machine learning.

With data warehousing, your business won’t have to rely on the 24/7 availability of a technical expert to troubleshoot problems associated with retrieving information. This way, you can save plenty of time.

2. Data Warehousing Improves Data Quality

The refined quality of data helps guarantee that your company’s policies are based on precise information about your corporate exertions.

With data warehousing, you can transform data from multiple sources into a shared arrangement. This way you can ensure the reliability and quality of your corporate data. This way, you can identify and remove replica data, inadequately recorded data, and misinformation.

Implementing a data quality management program can be both costly and exceptionally laborious for your company. You can easily use a data warehouse to eliminate a number of these annoyances while saving money which will eventually justify your decision to invest in a data warehousing system.

After all, poor data quality is a burden for your business and can decline the overall efficiency of your plans.

3. Data Warehousing Improves Business Intelligence

You can use a data warehouse to gather, assimilate, and derive data from any source all through your business undertakings. As a result, your BI will improve by leaps and bounds, owing to the capability of effortlessly consolidating data from distinct sources.

Let’s face it: cross-referencing numerous databanks can be tough, and at times, unmanageable. But, with a data warehouse in place, everyone on your team can have an integrated understanding of all the relevant information in a timely manner.

A data warehouse allows your sales and marketing teams to track and identify which of your targets are dynamic and have accounts on social networking websites. So, if you’re running a promotion that targets females in their mid-twenties working in the beauty industry, your team can fetch profiles of your target audience using your data warehouse within seconds. They won’t even have to cross-reference worksheets and databanks.

4. Data Warehousing Leads to Data Standardization and Consistency

Another important benefit of using a data warehouse is the standardization of big data. Your business can benefit from a data storage or data mart in a similar arrangement. As data warehousing stores data from diverse sources, such as a transactional system, in a consistent fashion, each source will generate outcomes that are synchronized with other sources. This guarantees improved quality and homogeneity of data. Consequently, you and your team can feel assured that your data is correct, which will result in more cognizant corporate decisions.

5. Data Warehousing Enhances Return on Investment (ROI)

According to a report by the International Data Corporation (IDC), using a data warehouse generates an average 5-year ROI of 112 percent with an average payback period of 1.6 years.

A data warehouse empowers you to increase your overall ROI by harnessing the value and acumen implanted within numerous databanks. As you increasingly make use of the information consolidated and systematized within the data warehouse, you achieve more out of your investment.

Thus, a data warehouse allows you to elucidate, enumerate, and validate the efficiency of your initiatives to higher management in terms of improved ROI.

6. Data Warehousing for Historical Data

As a data warehouse allows you to store large volumes of historical data from operational systems, you can easily investigate different time phases and inclinations that can be ground-breaking for your company. With the right and real-time data in your hands, you can make superior corporate decisions concerning your business strategies.

Predicting the results of your business processes is a significant aspect of being a resourceful business person. It can be challenging to forecast the future without a tangible understanding of your historical achievements and letdowns.

For example, suppose you own a fashion brand and you plan to launch a promotional campaign for your new clothing line. With the help of your data warehouse, you can access and analyze historical data from your previous campaigns in order to identify which approach worked the best, and how you might emulate it in upcoming promotions.

You can’t expect to store and analyze such comprehensive past data in any conventional databank. Thus, using a data warehouse gives you an advantage in your business procedures.

7. Data Warehousing Increases Data Security

Did you know that data-related complications cost a large number of businesses more than a whopping five million dollars every year?

But, with data warehousing, you can save yourself from the hassle of additional data security.

As a business that deals with customer information regularly, your first and foremost priority is to protect your existing and prospective consumers’ information. To evade all future nuisances, you take all the indispensable actions to escape data breaches. With a data warehouse, you can keep all your data sources consolidated and appropriately protected. This will significantly decrease the threat of a data breach.

A data warehouse allows improved security by offering cutting-edge safety characteristics erected into its set-up. Consumer information is a valuable resource for any company. But once safety becomes a problem, this information becomes your main burden.

Bottom-line

These are just a few advantages that data warehousing has to offer for your business. If a data warehouse is implemented and designed appropriately, it can offer a wide range of benefits to your company. It provides you with improved business intelligence, robust decision support, superior business practices, and effective analytics processing.

How Astera Data Warehouse Builder Can Help?

It may seem like a huge investment today, but in the future, a data warehouse can help you reap maximum profits in terms of money, resources, and improved business performance.

Looking to create your own data warehouse from scratch? Astera data warehousing solution can help easily automate the process of building an enterprise data warehouse. It expedites

  • Transforming and integrating disparate data
  • Modeling of schema structure
  • Delivers a high-performance data warehouse
  • Through a unified and intuitive platform

Take advantage of this data warehousing solution and create an agile data ecosystem today. Get in touch today or try our product Astera Data Warehouse Builder.