Data Warehouse

The 1980s period saw the rise of data warehouses. Businesses realized they can grow exponentially if they use business data to make decisions. Since then, they have strived to collect as much information as they can to form the basis of their decision-making processes.

Now, the idea of data warehousing wasn’t just to store information. It was reinforced to help reveal important business intel that will drive the growth of the organization fast.

A data warehouse is a collection of business information that’s used by any organisation for making decision. Since the implementation of data warehousing, businesses now treat organizational information as assets and for that reason, they’ve taken steps to protect that data.

That may be the reason why some if not all businesses today make their employees sign non-disclosure agreements. This helps them protect their business data that may involve special intelligence that means the life of the business.

Source of information in Data Warehouses

A data warehouse may be physical or virtual. Initially, businesses would have physical rooms with machines or files storing their data. Well, these physical rooms were exposed to security threats like burglary and fire. In case one or both happened, the organization would have lost a lot.

Time has changed things and now big data can be stored on cloud. Cloud storage offers more security and volatility. But it also has challenges as hackers can access the data if there are no proper security mechanisms in place.

That is why you need a competent IT team to secure your data in cloud. Besides, only a few should have access to the information. Proper controls should also be implemented so that you don’t have just a few individuals controlling everything. That can be counterproductive.

The few can choose to collude and turn against the organization. That is why there should be control limits, to protect the data and the organizational limits as well.

One may ask where all the data stored in data warehouses come from. Well, there are several sources providing information. Every day, a business incurs expenses and makes revenues. Whether the amount is actualized monthly, quarterly, semi annually or annually, the business transacts daily.

This can be in form of finances, that is, cash flows, or operations like marketing, sales, among other things. Management insists that all this information should be recorded. Managers insist on detailing of this data. That way, it is possible to provide direction for the organization even when not directly involved in the operations.

Mostly, investors are interested in financial data. But that information is not enough. It must be backed up with additional information for justification.

For instance, if the profit margin increased, something happened with either the sales or expenses. Accountant receivable and payable should be able to explain the differences. The sales team will also be put to task in case there was an increase in sales.

They should explain what happened so that the same can be repeated in future. But, the truth is, an increase in sales may also affect the expense account. That means a relative increase in expenses.

When doing analysis, sustainability has to be factored in. That is why an increase in sales is not final. Analysis has to be done to establish if the profit that was achieved can be done again without affecting the company’s future.

All this information must be documented. It is also important to note that any transaction, whether quantitative or qualitative, will affect more than one department and/or account. For that reason, every department affected must document the same.

The managers are the unifiers and neutralizers. They must check the information to confirm the details are identical. Once confirmed, the information can be saved at the data warehouse.

Most organizations are going concerns. This means the companies plan to be in operation for now and for the future. Well, the future is not promised and we humans have a limited productive life. That is why there must be systems in place for a smooth transition whenever one vacates office and a new team assumes responsibilities.

The new team will be able to see the far the company has come and all that happened in the past. With that information, the culture of the organization will be maintained. All this data is stored in the data warehouse and this shows how important the warehouse can be to an organization.

Myths about Data Warehouses

  • A data warehouse is a database

Well, this is not true. A data warehouse is more than a database. In most cases, databases simply store information for future retrieval. This means you can always come back in future and access the data perhaps to clarify something.

Well, a data warehouse is more than that. It is aggregated information for decision making. We could refer a database as storage of every detailed information. On the other hand, data warehouse is total information including averages and analytics.

Databases are also solely meant for retrieval and record keeping. Data warehouses on the other hand includes sorted information for analytics.

  • A data warehouse is a data lake

The only difference between these two is the organization. A data lake has every detail about the business from all sorts of sources. Before its sorted, that can be referred to as a data lake. After sorting the information in files and folders, it becomes a data warehouse.

  • A data warehouse is similar to data mart

Well, this is another common misconception. The fact is, data marts are sections of a data warehouse. That means a data warehouse is made of data marts.

Benefits of a Data Warehouse

A data warehouse has several benefits. We’ll discuss two. The first benefit is better data. Accuracy and consistency are key in proper record keeping. Data warehouses ensure information is well sourced and recorded. Once that is done, the decisions that follow will see the business grow.

The other benefit is the fast decisions made. A data warehouse stores all the information and analytics that form the basis of business decision making. Therefore, a well-maintained data warehouse will see a business make faster decisions.



Data warehousing will soon become a must have requirement. The data storage mechanisms help businesses make fast decisions because of the available accurate data. Those organizations that have invested in their data warehouses enough will continue to benefit.             

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