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A fresh new look at EDW T
he ability to capture and turn data into useful business
intelligence
in one consolidated enterprise data warehousecan dramatically
increase a companys competitiveness and efficiency by enabling it to realize
its goals through sound decision-making. Key strategic initiatives such as
customer relationship management, supply chain management, business performance
management, business analytics and enterprise resource management all require
a
single view
of corporate data.
You cant accomplish most of the major strategic initiatives out there without
an enterprise data warehouse, says Hugh Watson, professor of MIS and a C. Herman
and Mary Virginia Chair of Business Administration at the University of Georgia. It
provides the required decision support infrastructure to compete in the marketplace.
Examples abound of companies that took commanding leads within their respective
industries through enterprise data warehouse
strategies.
Wal-Mart imple-
mented a data warehouse years ahead of its competitors to reduce overhead, improve
delivery mechanisms and understand its business from top to bottom, explains
Dan Linstedt, chief technology officer for Core Integration Partners. Harrahs
Entertainment Inc. also beat its competition by establishing a unified brand identity
across its properties based on the
knowledge
of customers gleaned from
its enterprise data warehouse.
But as Wal-Mart, Harrahs and other
successful
companies know, success is
not just a matter of having a single view and the right data analysis tools. There must
also be communication and cooperation among all areas of the business. A data ware-
housing project is something that has to be viewed from both an IT perspective and a
business perspective, says Richard D. Hackathorn, president of Bolder Technology,
Inc. It has to be a
partnership
among the people who understand the
technology and the people who understand the business.
No matter which side of that equation you fall on, you must be able to understand the
companys strategic goals and overall vision in order to effectively manage any decision-
making process. To illuminate the many issues facing todays companies and provide sound
advice on the topic of enterprise data warehousing, Teradata Magazine contributing writer
Joe McKendrick interviewed several industry
thought leaders
. What emerged
from those discussions were 10 sound reasons for adopting an enterprise data warehouse
strategy. Some might surprise you; others will sound familiar. Either way, our list is sure
to enlighten you. Read on.
A fresh new look at EDW
10 reasons why you need an enterprise data warehouse Wh
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Get a single view of the business
M
ANY COMPANIES SIMPLY DON T HAVE A TRULY CONSISTENT VIEW
of their businesss basic
data points, including who their customers are, what channels are most effective for
reaching customers, whats going on in the supply chain and what is the overall
profitability of key products. Thanks to the widespread advance of technology
in all phases of production and administration, companies often have all the data
to answer these questions. However, decision makers often are unable to sort,
analyze or extract any value from the information right under their noses.
Ive dealt with companies that actually cannot compute the profitability
of products they sell, says Herb Edelstein, president of Two Crows Consulting.
Thats because some work is done in one country, shipped to another country
and sold in another. Each business unit has different markups for overhead and
different pricing methods. Add to that such factors as differing currencies and
fluctuating rates, and its clear how a fragmented view of the business can hamper
a companys ability to realize its long-term goals.
Data fragmentation and inconsistency also take their toll in areas beyond profitability
analysis, such as the ability to track product movement between various types of systems.
A manufacturer generated 16 widgets yesterday, but inventory only accounts for 14 today.
What happened there? Did you lose two of them between the manufacturing floor and
the warehouse for shipping? asks William McKnight of McKnight Associates, Inc. Those
operations are probably managed by two different application systems that are generating
numbers valid from each point of view, but certainly not from
the enterprise point of view.
Enterprise data warehouses provide a
consolidated repository for the storage of data
from multiple source systems across the enter-
prise. Regional sales managers see the same
numbers as the finance department. The
call center sees the same customer records
as the stores. Youre not going to have dif-
ferent versions of customer data, different
versions of product information or different
versions of sales figures, says McKnight.
This notion of a single view of the business
is a nebulous concept, but it drives ROI in that
you are more efficient as an organization.
To some industry experts, an organization using an
enterprise data warehouse is similar to a well-synchronized
symphony orchestra. Everyone gets the same sheet of music, says Claudia M. Imhoff,
president of Intelligent Solutions, Inc. If we have a particular calculation that is enterprise-
wide, then everyone looking at it is going to get the exact same number. As with all great
1
1
1
This notion of a
single view of the
business is a nebulous
concept, but it drives
ROI in that you are
more efficient as an
organization.
William McKnight
McKnight Associates, Inc. music, each musician may interpret his or her part of the score differently, Imhoff adds.
But the final result is still based on the same original source. I can look at a piece of
Mozarts music and put my own expression or spin on it. Likewise, I can take numbers
from an enterprise data warehouse and apply my own filters, calculations and unique
characteristics to it. My results may differ from someone elses, but at least we started
from the same set of numbers, and we know how we differ.
Many experts see the ability to capture a single view of the business as the most impor-
tant benefit of an enterprise data warehouse, outweighing all other advantages. Staying
alive in your industry is a huge motivation, says Linstedt. If a business doesnt have an
enterprise data warehouse then they dont have a complete view of their business and
how competitive they are compared to other companies in their market.
Colin White, president of BI Research, says, You have to tie the information in
the warehouse to business goals, and then assign people to manage that process.
Thats where the management piece comes in. Its not only measuring performance.
Its analyzing it. Thats only possible if there is a consolidated version of all relevant
data from which to evaluate progress.
Enjoy faster, better decision-making
A
TYPICAL EXECUTIVE REQUIRES QUICK DATA ACCESS
to make dozens of strategic
decisions every day. However, data might not be available because its locked
up in an application system or residing in another departments format.
Worse yet, the decision maker might not know if the necessary data is
even available, and that will certainly hinder his or her ability to lead the
organization in the right direction.
Distributed data will slow down access to critical information, says
Larissa Moss, president of Method Focus, Inc. With multiple data marts
or data distributed across support systems, it takes a while to find the right
data and use it correctly.
Enterprise data warehouses can help move data to the right decision makers faster
than distributed data management systems. The speed and the quality of decision-
making is what really counts, Moss adds. Thats what differentiates one company
from another. Thats really where your competitive advantage is.
Indeed, as Swiss health insurer CSS Versicherung found, the ability to make decisions
quickly makes all the difference. Before implementing a data warehouse, the company
was unable to calculate premiums thanks to a slew of disparate systems and sluggish
processing. In the insurance business, if you cant calculate a premium, you dont get
the customer. Consolidating all the necessary information into one central repository
reduced the process to mere hours and increased customer retention rates, helping the
company maintain its position as Switzerlands leading health insurance provider.
Another advantage for companies turning to enterprise data warehouses is that the
same copy of data can be reused across applications and end-user groups. You dont have
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Enterprise data warehouses allow the same copy of data
to be reused across applications and end-user groups. Wh
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to build a new database every time you have a new requirement, Moss says. Data in
an enterprise data warehouse is stored at an atomic levela very low, decomposed
and detailed levelso it can be used any way that you want, she says.
Summary data is often misleading or even flawed, but detailed data leads to accurate
results and higher quality decisions. Better insight into a co