Use Data Warehousing to Make Better Business Decisions

Data warehousing and business intelligence (BI) systems have the potential to provide some of the highest ROI of any enterprise system. Most enterprise systems exist to support a business process; BI, on the other hand, exists solely to support better decision-making. By making better decisions, an organization can improve its revenue, lower its costs, and better achieve other corporate goals. When you’re planning a BI system you need to provide both clear facts about the power of BI and the business justification for its cost.

Perception Versus Reality
Although a BI system supports better decision making, it doesn’t guarantee success in business. For example, using BI, a retailer might determine that a given promotion is doing well and generating sales quantities beyond the norm for a given product. Therefore, the leaders might want to order more of the promotional product. However, other aspects of the business must also continue to run well. Accounting must pay the distributor for the product, transportation services must be provided, and operational staff must receive and stock the promotional product. And hopefully, additional customers will come to purchase the product.

Required Investments
To obtain BI a company can employ a variety of different solutions. Detailing all of the common BI solutions is beyond the scope of this article, so I’ll focus on the most valuable (and most common)—the data warehouse.

A company wanting to build a data warehouse  needs several resources. First, the company needs to employ the services of a BI architect, who will provide the overall vision and design for how the data warehousing system will work based upon the company’s unique business requirements. Additional developers will be required to implement the architect's design. A project manager is useful for ensuring the project is kept on track, and a system administrator is needed to keep the system running well once it has been completed. Of course, the company needs to purchase hardware or re-provision it from existing assets for the data warehousing system, and it needs to buy data warehouse software.

Realizing Maximum Value
Even when a company can afford and implements a data warehousing system, it doesn't automatically realize the benefits—several factors need to be taken into consideration. First, the BI architect must design the system to provide accurate, actionable, and timely information. If any of these three attributes aren’t met in the system, the value of the information decreases.

Second, decision-makers in the company must change how they make their decisions from intuition to intuition plus facts in order to reap value from their BI/data warehousing investment. Corporate culture needs to change for a company to be successful in its data warehousing efforts—that's why those implementations should be driven from the top down and not from the IT group.

Last but not least, the BI administrator must track the decisions in the organization that are  made based on the system’s information in order to have data that shows the true value of a BI system for any organization.

Correctly implementing a BI/data warehouse system can lead to improved decision making and add to business success. A significant financial investment is required, and for a long time, only the largest enterprises could afford to build such costly systems. In 2008 however, Microsoft has done a phenomenal job of producing BI software that’s significantly cheaper than its rivals, thus helping to open up BI systems to a larger audience of smaller organizations.