Data Warehousing and Business Intelligence

For an enterprise to grow, it is necessary to identify its:
1. Competitors
2. Potential customers
3. Customers’ needs

To identify the customers and competitors, it is very important to keep track of Market trends, company’s sales from time to time, and other data pertaining to that enterprise. A data warehouse helps do this. Let us understand what a Data warehouse is.

A Data Warehouse is a database (or a centralized repository) to store large data (generally operational data) of an enterprise that is used frequently by DSS (Decision Support Systems).

The difference between a normal database and a Data warehouse is that:

A normal database stores raw data of small sizes whereas a data warehouse can store data that is sizes of Gigabytes. Legacy and inconsistent data will not help an enterprise make strategic decisions. Data in an ordinary database is not always current, consistent and organized whereas a data warehouse has organized and consistent data.

Consider a Chain of department stores. The sales team tries to retrieve the sales information of a particular brand for a particular duration.

If a normal RDBMS or online transaction system is used by the developer, writing such complex queries would be very difficult and an end user ( here, the sales team) can never understand it since complex joins have to be used.

A Data warehouse is very useful in such case. One can extract data to the detailed level using simple query reports in a data warehouse where the data stored is denormalized, non-volatile, and consistent.

A data warehouse should be kept separately from the Operational data. Operational data is the data that is updated on a daily basis. But the data in a data warehouse is a consolidated data taken from various sources including operational data to have a complete repository of the data pertaining to the enterprise.

How do we analyze this data?

We understood that data warehouse is important to store large data so that the management identifies its competitors. Business of an enterprise grows when right decisions are taken. But how are right decisions made?

Right decisions are taken with the help of information available about the customers, products, sales and so on. So we need systems to present this data available in the data warehouse in a proper format so that right decisions are made.

Business Intelligence tools are used to analyze data. Often BI applications use data gathered from a data warehouse.

Hence, Business intelligence refers to extracting the right data in a proper format at the right time and deliver it to right people.