Business Intelligence - Overview
The power to change the face of business lies in the hands of innovative companies who use the data they already have to empower their decision-making. Business Intelligence and Data Warehousing offer that empowerment.
Data Warehousing, a component of many Business Intelligence systems, gives companies the power to analyze their existing data in order to make decisions that can enhance their competitive advantage, their understanding of their customer, their product performance, or any other aspect of the business. The actual Data Warehouse is a storage facility for historical data that is in a structure and form that is easily accessible. From this facility, data can be extracted to get holistic view of what is going on within a company, a product line, or even the just one business unit.
The Data Warehouse is part of a process that most commonly begins with company databases that hold transactional data. This data is pulled from these databases, like the inventory database, and put into an “Extraction-Transformation-Loading” System, which cleans the data to make it more user-friendly and parallel. The newly cleaned data is then sent to the Data Warehouse. Often, the user interacts with a data mart, instead of the actual Data Warehouse.
The history of Data Warehouses began with systems that were filled with data that was unused and inaccessible. Data Warehouses evolved to bridge the gap between information that useful and useless. Since then, not only big companies have been using Data Warehouses, but there has been a move for small and medium sized companies to enjoy the benefits of a Data Warehousing system. The banking and financial services industry uses Data Warehousing the most.
The purpose of a Data Warehouse is to solve a specific business problem, like credit card risk management. If solving this problem makes a company more productive, the company becomes more profitable. Like any large business project though, there are many risks that must be acknowledged. They include cost, which can easily enter the millions, finding a software solution that fits specifically fits their needs, and finding someone within the company who can lead the company to successfully use the system. Companies who do not look into using a Data Warehouse also run the risk of losing competitive advantage over companies with Data Warehouses who might be able to derive benefit from their investment.
It is very important before a company implements a Data Warehousing system that they look at certain factors to decide whether their company could benefit from a Data Warehouse, and then look at factors that make a Data Warehouse successful. The criteria to decide if a Data Warehouse would be useful include looking at the companies mission statement and long-term goals, whether they have high intensity and frequency of transactions, if their product is at a mature stage of the product-life-cycle and if they can make their relationship with their supplier tighter. A successful Data Warehouse focuses on a real problem, uses detailed historical data, trusts that data, applies technology to the business, and has a champion within the company.
In conclusion, implementing a Data Warehousing system can be very risky and costly. For this to be a worthwhile project for a company to undertake, the company should be able to define exactly what they want the Data Warehouse to do for them, and to acknowledge the risks and benefits involved. By evaluating the uses and successes or failures of other company’s experiences, a company thinking of implementing a Data Warehousing solution can make an informed decision. A Data Warehouse can be very powerful or it can be a huge drain on a company’s budget. “With the desired data available, managers acquire the power to analyze the variables influencing the market” (Parzinger, “Creating Competitive Advantage...“, 3). Companies must remember that a Data Warehouse could give them the edge over the competition that makes them the next Data Warehousing success story.