Why Data warehousing?

As I started my job as a Data warehousing professional at Capgemini, the question "Why Data Warehousing ?" always lurked in my mind. To preface my article, Data warehousing is the process of gathering business data from transaction system and building a dedicated system to analyze those data to understand and enhance the business.

But given my limited knowledge of how big companies take complex business decisions , I always questioned the use of a dedicated database to analyse data which can be done in conventional databases. As I was reading more about the usage of data warehousing I found an interesting article "Why you need a Datawarehouse" by David Andrews. As he mentions the concept of data warehousing is deceptively simple. Data is extracted periodically from the applications that support business processes and copied onto special dedicated computers. There it can be validated, reformatted, reorganized,summarized, restructured, and supplemented with data from other sources. The resulting datawarehouse becomes the main source of information for report generation, analysis, and presentation through ad hoc reports, portals, and dashboards.

Business Intelligence can be defined as The process, technologies, and tools needed to turn data into information, information into knowledge, and knowledge into plans that drive profitable business action. Business intelligenceencompasses data warehousing, business analytic tools, and content/ knowledge management. As I understand there are two sets of people in the Industry those are for and against the use of Data warehousing as an effective measure for Business Intelligence.

But David have taken a very beautiful case study to show that Data warehouse have shown commendable profitability and adaptability for companies BI environment in a long run. The "Direct Access" method though seems simple and less cumbersome have shown its shortcomings and disadvantages in a longer run. The direct access method fails mainly because of following reasons

1.Priority always needs to be given to transaction processing. Reporting and analysis functions tend to perform poorly when run on the hardware that handles transactions.

2.There is a risk that BI users might misuse or corrupt the transaction data.

3.There are many ways in which BI users can inadvertently slow the performance of applications.

4.Tables are structured to optimize data entry and validation performance, making them hard to use for retrieval and analysis.

So I got my answer to the poignant question " Why Data Warehousing " from this insightfull article by David Andrews. He finally concludes that "Trying to manage a complex business in a highly challenging economic environment without a BIsolution based on a data warehouse is fraught with risk. Would you set out to sea today in bad weather on a large ship without radar, GPS and a satellite radio?"

You can read the complete article here:

http://datalyticstechnologies.com/wp-content/uploads/2014/01/2013-03-Why-You-Need-a-Data-Warehouse.pdf