Benefits of a Data Warehouse

(Taken from “Building the Data Warehouse, by W.H.Inmon, p65)

In most cases, the real benefits of the data warehouse are not known or even anticipated before construction begins because the warehouse is used differently than other data and systems built by information systems. Unlike most information processing, the data warehouse exists in a realm of “Give me what I say I want, then I can tell you what I really want.” The DSS analyst really cannot determine the possibilities and potentials of the data warehouse, nor how and why it will be used, until the first iteration of the data warehouse is available. The analyst operates in a mode of discovery, which cannot commence until the data warehouse is running in its first iteration. Only then can the DSS analyst start to unlock the potential of DSS processing.” (DSS – Decision Support System).

A true data warehouse spans the entire organization structure across all business units and allows reporting across the business as a whole. As yet the RMDatamart is simply the first data-mart with a structure in place to facilitate cross business reporting when subsequent data-marts are created. (Common Bus)

As the above quote mentions, the value from the warehouse, and by implication the ROI, cannot be realised until the DSS analyst has started the process of mining the data base to discover the nuggets of Gold that are lying within.

Literally the analyst starts a process of discovery, where exciting information is discovered, in-efficiencies are exposed, hidden-value is brought to light, and the difficult questions are not always answered straight away- they often simply trigger more questions!

There are several good reasons why the costs of a data warehouse are significantly different from the cost of a standard system: (i) the truly enormous volume of data that enters the data warehouse, (ii) the cost of maintaining the interface between the operational system and the data warehouse, (iii) the fact that the warehouse is never done.

Therefore although the true benefit and value in a DW is in the nuggets that are found, the opportunities that are discovered and the in-efficiencies that are exposed , one of the quickest ways to start a return on investment calculation is to look at the cost of generating reports from the legacy system.

The reason is straightforward, every time you wish to generate a report from the legacy system the costs incurred are the same, (finding a source system specialist whom understands how the data is stored, finding the data for the report, accessing the data, integrating the data, merging the data, building the report, all of which incurs expenditure).

However once a DW is built, the initial cost is offset by the cost of every single new report that is created by the analyst, that historically he couldn’t create. The cost of the reduction in payroll alone can help determine this, and the benefits of getting to the data in a timely, consistent manner can soon add up.