Importance and Benefits Of Data Warehousing

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Sep 26, 2014
Importance and Benefits Of Data Warehousing
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Why Data Warehouse?

Implementing data warehouse could help a company avoid various challenges. In an era of intense competition, it isn’t sufficient to just take decisions alone. It must be taken on time because if you run out of time, you will witness your competitors getting ahead of you in the marathon.

Let’s assume that a  super market chain has not implemented a data warehouse and eventually the supermarket finds it very difficult to analyze what products are sold, what is not selling, when does the sale go up, what is the age group of customers who are buying a particular  product and several other queries. This is the first step of attracting challenges because a decision has to be made as to whether, a particular product is a hit among 18-25 age group or not? In case it is analyzed that the selling value has subsided, steps have to be taken to analyze the issue surrounding it.

Talking about the strategic value given to a company, let’s take an example of procurement. Every company procures certain products from a supplier like laptops, desktops etc. Before making a purchase, the company contacts the supplier in order to negotiate about the price and inquiring about the terms. How sure is the company about the supplier adhering to the terms of the contract? After the purchase is made, the supplier always gives an invoice. If the invoice shows that the discount hasn’t been given as agreed, and doesn’t match the terms of the contract, then the two could discuss on the same.

Hence, the sole reason for a company to have a data warehouse is to have the extra edge. It is gained by taking smarter decisions in a smarter manner. This is possible if executives responsible for such decisions have this data at their disposal. There was a time when fact-based decisions and experience-based decisions were much more prevalent. Moving away from that we have entered into an area, where fact-based decisions have gained importance in our lives.

There are certain questions asked to a manager or executive and he has to answer this to get an extra edge over his competitors. These questions may not be needed to run a business but are needed for the survival and growth of the business.

  • How to increase the market share of the company by 5%?
  • Which product is not doing well in the market?
  • Which agent needs help with selling policies?
  • What is the quality of the customer service provided and what improvements are needed?

Why is Data Warehouse Crucial?

What is the quality of the customer service provided? This is one of the questions a manager strives to understand. He breaks it down into smaller questions like how many customer feedback did we receive in the last 6 months?  He files a query on the database to analyze. The database holds every customer feedback that it has received.

The second sub set question is how many customers have given a feedback of excellent, how many averages and how many bad? Then there is another column on comments which will be required for the next question; this will be the comments or improvement areas highlighted by customers. It can be identified as to why these questions are asked. All these three questions combined give a picture of the customer service and what improvements are needed.

He will hit the data warehouse every time to get the results and will consolidate this and arrive at solutions. Another important factor is that data warehouse provides trends. It has the history of data from a series of months and whether the product has been selling in the span of those months. If that trend is spotted, it can be analyzed and a decision can be taken. An operational trend on the other hand is the transactional system.

Advantages

  • Standardizes data across an organisation
  • Smarter decisions for companies – moves towards fact-based decisions.
  • Reduces costs- drops products that are not doing well
  • Increases revenue – works on high selling products.

Got a question for us? Please mention them in the comments section and we will get back to you. 

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2 Comments
  • Umair Amin

    you made it really easy to understand the concept. Thanks <3

  • It has become need of every individual company to implement data-ware house truly as because of the fact that there are both technical and business reasons are there. I completely agree with the mentioned points that why it is so crucial nowadays as it is a time saver, makes big data analysis possible, streamlines data quality and a ton more.
    Thanks

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