If your business needs to store massive amounts of data, data warehousing offers an excellent and efficient solution. Not only does data warehousing make it easier to access your data, it better prepares you to make high-level decisions based on that data. In this article, Daniel Calugar looks at what a data warehouse is, why it can be necessary, and how it should be set up.
What Is a Data Warehouse?
A data warehouse is almost exactly what it sounds like. The term describes a vast repository of information that flows in from several sources relating to business operations (usually marketing and sales). By creating this repository, a business gains greater insight into how that business functions and performs.
The Necessity of Data Warehouses
By gathering significant sums of empirical data, a business can create a history of information to analyze. You can use patterns, trends, and behaviors to make critical decisions without relying on instinct or guesswork. This strategy can result in improved or streamlined processes, reduced risk, and improved financial management.
Further, with a consolidated repository of critical information, a business can more confidently forecast. You can use your marketing tools more precisely, and you can better identify key performance indicators. The result is better performance across the board.
How to Set Up a Data Warehouse
There are several ways to set up a data warehouse, but you’ll need to know and understand a few basic commonalities between them. The three fundamental components are storage method, software, and management.
This is where your data will live. You’ll have two primary options: Cloud storage and server storage. Cloud storage tends to fall between Amazon S3 or Microsoft Azure, and you’re safe to pick either one. Internal server storage requires a physical server in-office, either Microsoft SQL or Oracle.
If your business doesn’t have space available in the office, or there’s no room in the budget for the hardware, cloud services are a perfectly viable solution. If you’re more comfortable with direct access and support for your data, go with in-house space.
Software refers to the applications required to manage and analyze the data you’re staring in your data warehouse. Typically, the software is split between two main categories: centralization software and visualization software. While some software packages both together, it’s typically better in the long run to have separate applications that focus on each.
Centralization software is what you’ll need to gather and consolidate data from the several sources you’ve selected. Visualization software takes that data and presents it so that it is easily digestible for quicker and more efficient analysis.
You’ll need a team to help build and maintain your data warehouse and interpret the information within. If you don’t already have these positions established, this means hiring an Information Systems Manager, Backend Developer, Database Architect, and Data Analyst. That being said, if you’ve decided to go with cloud services like Amazon S3, they will likely provide the required expertise.