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What Is A Data Warehouse And Why Does My Company Need One?

by Kayle Simpson, on April 19, 2016

You've probably heard the term "data warehouse" thrown around a lot online, in industry news, and maybe even by your coworkers. But what does it even mean? If you aren't a data person, delving into that question might be a little overwhelming- there is so much content out there about data warehousing, and a lot of it is jargon-heavy and technical. And even if you make it through that, you still might not know what a data warehouse can do for you on a practical level. We at Arkatechture believe that data is for everyone - and that's why we're going to answer the question: what is a data warehouse, and why does my company need one?

First off, let's tackle the first half of the question. What is a data warehouse? Well, by definition a data warehouse is a relational database designed for query and analysis rather than transactional processes. Basically, it's large database with the sole purpose of providing insight into your company. Databases made for transactional processes, like changing your billing address or using a credit card, are organized differently than databases made for collecting and analyzing. One of the biggest benefits of data warehousing is getting all of your data, including historical data, all in one place.  You may think that your company has all of its data, but there's a good chance that you don't.  For example, can you cross-analyze transaction revenue with operating costs? Additionally, if you have everything in one place, not only do you own all of your data, but you can also access it very easily - without fumbling through Excel, or your data entry tool of choice.

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So why does your business need one of these? Data warehouses are databases that are custom built for providing business intelligence - which is another term you may or may not be familiar with. Business intelligence, or BI, is exactly what it sounds like- extremely valuable information about your company. BI is what lets businesses know what's working, what isn't, where to invest, and where to expand. That's pretty important information, right? You might think you know what's going on in your company, but what if the numbers tell a different story? How can you make sound business decisions, like who gets a raise and what products to expand on, without business intelligence? Some great examples of BI questions we have asked here at Arkatechture are: Does the weather impact your sales? Do you have an easy way to see company performance over time? If you notice a trend, do you have the ability to quickly figure out what is causing it? - you can answer all of these once you've built a data warehouse! 

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Topics:Data Science