Some people think you only need a data warehouse if you have huge amounts of data.
That used to be true. It's not anymore.
These days, any business that uses Salesforce, Shopify, Twitter, an online accounting tool, and other online systems is generating more than enough data to need a data warehouse. And because the cost and effort of the modern ELT data warehouse is a fraction of what old-school data warehouses cost, it's now a smart, affordable investment for businesses of all sizes.
Quick Recap: What is a Data Warehouse?
A data warehouse is a central repository for all your company’s data.
A modern data warehouse can store data from multiple sources, such as your company’s social media accounts, loyalty programs, CRM and ERP software, and even industrial sensors or consumer wearables. This data becomes queryable in real-time, allowing unprecedented access to insights, trends and patterns.
Lately, data warehouses have been moving to the cloud, resulting solutions that are:
- Easily scalable
- More cost effective
- Quicker to get up and running
- Optimized for analytics
- Less resource-intensive
To find out more, check out this Data Warehouse Tutorial or find out more about Data Warehouse Concepts.
Why You Need a Data Warehouse
When you combine a well-designed data warehouse with a BI tool, you get a lot of bang for your buck. Aside from making your data more accessible, a data warehouse makes it possible for you to:
1. Identify and Take Advantage of Macro Trends
A data warehouse makes it easy to see the bigger picture and figure out the next steps for your business. For example, it can help you:
- Identify key new product lines
- Discover which geographic markets make most sense to target for expansion
- Find out which products sell best at certain locations
- Optimize your logistics fleet
2. Reveal Patterns in Huge Amounts of Data
Often the sheer volume of information generated by your business can make it almost impossible to draw meaningful conclusions from your data. But if you consolidate your data into a data warehouse and analyze it using a BI tool, you'll be able to uncover patterns you can use to help your business thrive.
3. Find Dependencies and Correlations
If you know, for example, that two products are often purchased at the same time, you may be able to increase sales by merchandising or bundling them together. In the past, you'd have to make this decision based on “gut feel” or anecdotal evidence. With a data warehouse, you can use hard data to drive your decisions, taking full advantage of patterns, cycles and correlations you discover to increase your business's bottom line.
4. Allow Many Users to Simultaneously Query Relevant Information
Your marketing department might want to understand the sales spikes that are occurring during the new campaign they’re running, while your engineering team wants insights into the efficiency of their new engine design. With a data warehouse, multiple queries can take place simultaneously, in real-time—and without becoming a drain on your production databases.
5. Make It Easy to Access Data Across Your Company
By standardizing your data—i.e., ensuring that all of your company's data conforms to a common format—you can uncover new insights by cross-referencing data across your organization. For example, now you can lay loyalty program results over help-desk inquiries and figure out ways to preempt bottlenecks and identify opportunities.
You don't need to be a big company to obtain these benefits from a data warehouse. If your business generates large amounts of data—which is true of any business with a PoS system, an accounting system, a social media strategy, etc.—and you're interested in analyzing this data holistically, then a data warehouse is for you.
Bonus: 6. Create a Single Source of Truth for Your Entire Team
Data warehouses don't just just provide access, they also serve as a single source of truth (SSOT) for your data. This puts an end to questions like "Are we pulling spend numbers from Hubspot or straight from LinkedIn Ads?" by ensuring that business users are all starting from the same data.
Pulling the same old Excel reports—and taking days to do it—just doesn't cut it anymore. Replace those error-prone spreadsheets with a data warehouse and you'll save a lot of time, tons of hassle, and find new insights in a flash.
