data warehousing

The Pros and Cons of Data Warehousing

What’s the first thing that comes to mind when you hear the term data warehousing? Perhaps you’re familiar with this technology and what it can do for your business. Or, maybe you’ve overlooked it in the past and want to learn about it so you can change your ways. Either way, we’d love to help.

Data warehousing dates back to the 1980s but has recently grown in popularity as the result of positive changes within the cloud, mobile, and information technology spaces.

With Teradata, Oracle, and AWS (Amazon Redshift) leading the way, there’s no shortage of providers to choose from. However, before you look into a specific vendor, let’s answer the question of, What are the pros and cons of using a data warehouse?

Data warehousing isn’t the right fit for every company. But it could be for yours. After you compare the benefits and challenges of data warehousing, you may find it’s a good fit for you.

Benefits of Data Warehousing

Let’s examine a couple of the top benefits of using a data warehouse.

Better Decision Making

Do you ever struggle to make high-level decisions because you don’t have access to all the data you need?

You’re not alone; a top article in Harvard Business Review noted the following:

Cross-industry studies show that on average, less than half of an organization’s structured data is actively used in making decisions—and less than 1% of its unstructured data is analyzed or used at all.

In some cases, the reason for this is simple: decision-makers simply overlook the importance of the data available to them.

Conversely, it’s just as common to ignore data because you don’t have access to what you need.

This is where data warehousing comes into play.

With the ability to aggregate data from multiple sources, it’s much easier to compare and analyze every last piece of information to make more informed and confident decisions.

Consolidated Data

With some data here, some data there, and some data nowhere to be found, it’s a challenge to know exactly what’s available to you.

This leads to another telling statistic from the same Harvard Business Review article:

80% of analysts’ time is spent simply discovering and preparing data.

Imagine that. Eighty percent of the time we spend on nothing more than discovering and preparing data. This means that only 20 percent of analysts use their time is actually review data.

With data warehousing, every bit of information is under the same roof. Not only does this help save time by cutting back on the discovery and preparation of data, but it also ensures greater quality, more consistency, and a higher level of accuracy.

With the ability to consolidate data from multiple sources, you don’t have to worry about searching in several places to find what you need. It’s exactly where you expect it to be, 100% of the time.

In other words, you can create “one source of truth” that your entire organization can pull from when analyzing, comparing, and reporting data.

Drawbacks of Data Warehousing

Now you see why so many companies, regardless of size and industry, are moving towards data warehousing. But are there any reasons to watch your step? Here are a couple of things to think about:

The Setup Process

You can’t decide on a whim to use a data warehouse. There’s a lot that goes into this decision, such as:

  • Choosing the right provider
  • Deciding which type of data to store
  • Sharing the technology and its uses with your team
  • Finding a solution that fits your budget

Fortunately, once you choose a data warehouse and have a system in place for inputting data, everything will come together. Your job is not done at that point, but it’s much easier.

Confidentiality Concerns

It’s okay to have concerns about confidentiality. In fact, this is a good thing when you take into consideration the fact that hundreds of millions of files are exposed by accidental loss every year.

If you have sensitive data, you must implement a system to ensure that it’s only viewable to employees (and outsiders) who need to see it. The problem with this is simple: by limiting who can see the data you also limit the power of your data warehouse.

You don’t want to share confidential information with the wrong people, but at the same time, you don’t want to reduce the value of your data warehouse. This is where the balancing act begins.

Over to You

As you can see, data warehousing on its own is extremely powerful. However, you can take your data to the next level by combining it with a data reporting platform like Kloudio.

With Kloudio, you can easily connect to your data warehouse for a more efficient way to analyze, track, and report on your data. We offer integrations with top data warehouses like Amazon Redshift, Google BigQuery, and Snowflake. Pair your favorite data warehouse with Kloudio to see your data in a new light. Create a free Kloudio account to get started.

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