Why Is Data Warehousing Important?

Wondering if data warehousing is right for your business? Why is data warehousing critical? Read below to discover everything you need about a data warehouse.

What is a data warehouse?

It’s a powerful way for businesses to store data in a centralized area. Data warehousing is the collection of data from many source systems.

Companies started data warehousing not only for convenience but also for security. It makes it easier for decision-makers to access the data they need. They use this to make economic business decisions where it benefits the company.


How Does Data Warehousing Work?

A data warehouse architecture comprises three levels: the bottom, middle, and top tiers.

The bottom line is a database where you store data. The middle level is analytics, where you interpret information. Finally, the top level is the front-end client.

In this tier, you analyze reports and use data mining tools to present results.

The data warehouse gathers and sorts data. It groups data into tables and columns depending on its type and format.

Store any vital information of your business in a data warehouse. For example, you can keep sales, financial performance, and other business-related activities.


The Importance of Data Warehousing

Data warehousing is vital to a business. It helps them store essential data from their past to current activities.

1. Accessible Data to Boost Efficiency

A business’s data serves as the foundation of its products and services. Therefore, a business needs to access data right away. A data warehouse allows you to access essential files from different sources simultaneously.

You’re able to review and study information about your business right away. It decreases the hassle of collecting files from many sources. With this, you can make fast and rightful decisions for your business.

Data warehousing helps you retrieve historical data, too. You can track and access your business’ performance from previous times.

Besides those, you won’t need to ask for aid from your IT experts to retrieve data. The data warehouse prepares your files following a proper format. This helps in boosting work efficiency.


2. Ensures Data Quality and Consistency

A data warehouse collects information from many sources. It converts different data into a uniform format, following the data analytics requirements. Data warehousing ensures production standards and quality information.

Different departments can generate consistent results. Thus, producing more accurate data can be used as the basis for decision-making. It decreases the risk of misinterpretation of the information.

Uniformed data makes it easier for decision-makers to interpret and exchange opinions. It lessens the number of stored data in the system. The basic data warehouse eliminates the repetition in information.


3. Retrieving Historical Data

Historical data and files are essential in a business. It allows you and other stakeholders to review past activities of your organization. You can get ideas from this information to improve your business.

Keep historical data of your inventories, sales, and properties in a data warehouse. It enables you to retrieve these files when you need to review them.

For example, you need to study the past buying behaviors of your customers. You can get this data in your data warehouse right away. This allows you to perform a quick review and generate a new idea for your business.

The data warehouse lists all key performance indicators surrounding this past data. It offers a new approach to lessen expenses, change marketing, and increase sales.


4. Helps in Decision-Making

Organizations use business intelligence tools and systems for their data. It’s the process of gathering, keeping, and interpreting historical and current data. The aim is to boost strategic decision-making and provide a competitive advantage.

Now, why is data warehousing important?

Data warehousing collects data from multiple sources and speeds up accessing this type of data. The data warehouse stores facts and statistics of current and past activities.

BI and data warehousing produce tools, procedures, and systems to manage that big data. It turns sources into uniform information that you can use. It also helps in making marketing strategies, sales, and more.

Stakeholders need the current and historical files to come up with a decision. It allows them to make a reliable and accurate interpretation of the information. With the help of BI and the data warehouse, they can retrieve the data immediately.


5. Generates Revenue

Using a data warehouse is more of an investment for a business. It helps the organization generate more revenue and lessen costs.

Data warehouse creates standard and quality data. The business utilizes its retrieved historical information to compare with its current documents. They then come up with a functional decision to improve their business.

A better decision strengthens the company, resulting in producing high revenue. It prevents them from spending more, too. It allows them to see things they must do and not to do in growing the business.


6. Secure Data

Data warehousing allows access to information for all departments. However, you can limit the accessibility of this information for safety reasons. There are several ways you can protect your data from unauthorized personnel.

You can apply the slave read-only, encrypt columns, and create custom user groups. A slave read-only blocks SQL codes from manipulating data. This puts the data warehouse in reading default.

Encryption is another excellent method for protecting sensitive information. It presents data you only allow to be visible to others.

You use the custom business user groups to include or exclude a column of data for people to access. You can give row-level permission to access sensitive data. However, regulate who can see other rows and information.


Answering the Question: Why Is Data Warehousing Important?

Now you know why is data warehousing important. A data warehouse is a storage for all business-related information of an organization. It aims to keep historical data you can later access to help make business decisions.

Are you looking to invest in a data warehouse for your business? You can reach us here if you have more questions about data warehousing!

Related Articles to Help Grow Your Knowledge

Features and Benefits of Microsoft 365
Features and Benefits of Microsoft 365

Microsoft 365 or Microsoft Office 365 has all the apps that help you reach your business or educational goals. Learn more about the features and benefits of Microsoft 365 that will help you achieve those goals efficiently. This guide will also help those who have...

Automating Your Tasks with Teams and Power Automate
Automating Your Tasks with Teams and Power Automate

Microsoft Teams is a collaboration platform that combines all the tools your team needs to be productive. MS Teams is an ideal platform to enhance productivity and help you accomplish more things. With its powerful chat features, you can easily stay in touch with your...

Do You Need Power Automate Dataverse Integration?
Do You Need Power Automate Dataverse Integration?

Part of the Microsoft Power Platform, Power Automate (formerly known as Microsoft Flow) is a must-have tool for any business. Power Automate can help you increase business productivity by automating routine processes and tasks, freeing your employees to focus on...