Database Development 261

Lesson 8 – Data Warehouses

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OBJECTIVES
• Understand the desperate need for
strategic information
• Recognize the information crisis at
every enterprise
• Distinguish between operational and
informational systems
• Clearly see why data warehousing is
the viable solution
• Understand business intelligence for
an enterprise

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 BI, in the context of
the data warehouse
• Business Intelligence (BI), in the
context of the data warehouse,
is the ability of an enterprise to
study past behaviours and
actions in order to
• understand where the
organization has been,
• determine its current
situation,
• and predict or change what
will happen in the future.

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Strategic Information
• Companies are desperate for strategic information to counter fiercer
competition, extend market share, and improve profitability.
• In spite of tons of data accumulated by enterprises over the past decades,
every enterprise is caught in the middle of an information crisis.
• Information needed for strategic decision making is not readily available.
• All the past attempts by IT to provide strategic information have been
failures.
• This was mainly because IT has been trying to provide strategic information
from operational systems.

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NEED FOR DATA WAREHOUSING
• Informational systems are different from the traditional operational systems.
• Operational systems are not designed for strategic information.
• We need a new type of computing environment to provide strategic information.
• The data warehouse promises to be this new computing environment. Data
warehousing is the viable solution.
• There is a compelling need for data warehousing in every enterprise.
• The challenges faced in early data warehouse implementations led the
movement towards maturity.
• The notion of business intelligence for an enterprise has evolved as an umbrella
concept embracing data warehousing and analytics to transform data into
information and information into knowledge.

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Operational Systems
• Applications such as order processing, general ledger, inventory, human
resources, payroll, in-patient billing, checking accounts, insurance claims,
and so on are important systems that run businesses.
• They process orders, maintain inventory, keep the accounting books,
service the clients, receive payments, and process claims.
• Without these computer systems, no modern business can survive.
• These applications gather, store, and process all the data needed to
successfully perform the daily routine operations.
• They provide online information and produce a variety of reports to
monitor and run the business.

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Data Warehousing Introduction
• In the 1990s, as businesses grew more complex, corporations spread
globally, and competition became fiercer, business executives became
desperate for information to stay competitive and improve the
bottom line.
• The operational computer systems did provide information to run the
day-to-day operations but what the executives needed were different
kinds of information that could be used readily to make strategic
decisions.

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Data Warehousing Introduction
• Data warehousing is a new paradigm specifically intended to provide
vital strategic information.
• In the 1990s, organizations began to achieve competitive advantage
by building data warehouse systems.

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Strategic Areas for Warehousing

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ESCALATING NEED FOR STRATEGIC INFORMATION
• The executives and managers who are responsible for keeping the
enterprise competitive need information to make proper decisions.
• They need information to formulate the business strategies, establish
goals, set objectives, and monitor results.

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Characteristics
of Strategic
Information

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Quick Concept • Discuss the five characteristics of strategic
information.
Check

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OPERATIONAL VERSUS DECISION-SUPPORT SYSTEMS
• Operational systems are online transaction processing (OLTP)
systems.
• These are the systems that are used to run the day-to-day core
business of the company.
• Decision-support systems are not meant to run the core business
processes.
• They are used to watch how the business runs, and then make
strategic decisions to improve the business
• Decision-support systems are developed to provide strategic
information.

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OPERATIONAL VERSUS
DECISION-SUPPORT SYSTEMS
• Decision-support systems are developed
to get strategic information out of the
database, as opposed to OLTP systems
Get the data in Get the information out
that are designed to put the data into the
database. Take an order Show me the top-selling
Process a claim products
• Decision-support systems are developed
to provide strategic information. Make a shipment Show me the problem regions

Generate an invoice Tell me why (drill down)

Receive cash Let me see other data (drill

across)
Reserve an airline seat
Show the highest margins
Alert me when a district sells
below target

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OPERATIONAL VERSUS • To provide strategic information we need to build
DECISION-SUPPORT informational systems that are different from the
SYSTEMS operational systems

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DATA WAREHOUSING—THE ONLY VIABLE SOLUTION
• The type of information needed
for strategic decision making is
different from that available
from operational systems.
• We need a new type of system
environment for the purpose of
providing strategic information
for analysis, discerning trends,
and monitoring performance.

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Features of the Data Warehouse
• Database designed for analytical tasks
• Data from multiple applications
• Easy to use and conducive to long interactive sessions by users
• Read-intensive data usage
• Direct interaction with the system by the users without IT assistance
• Content updated periodically and stable
• Content to include current and historical data
• Ability for users to run queries and get results online
• Ability for users to initiate reports

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Processing Requirements in the Data Warehouse
Environment
1. Running of simple queries and reports against current and historical
data.
2. Ability to perform “what if” analysis in many different ways.
3. Ability to query, step back, analyze, and then continue the process
to any desired length.
4. Ability to spot historical trends and apply them in future interactive
processes.

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Strategic Information from the Data Warehouse
• The data warehouse environment, is kept separate from the system
environment that supports the routine day-to-day operations.
• It essentially has become the source of strategic information for the
enterprise to enable strategic decision making.
• The data warehouse has proved to be the only viable solution.

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Overview of
the Data
Warehouse

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Business Dimensions
• At a high level of interpretation, the data warehouse contains critical
metrics of the business processes stored along business dimensions.
• E.g., a data warehouse might contain units of sales, by product, day, customer
group, sales district, sales region, and promotion.
• The product, day, customer group, sales district, sales region, and promotion
are business dimensions.

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DATA WAREHOUSE DEFINED
• The data warehouse is an informational environment that:
➢Provides an integrated and total view of the enterprise.
➢Makes the enterprise’s current and historical information easily available for
strategic decision making.
➢Makes decision-support transactions possible without hindering operational
systems.
➢Renders the organization’s information consistent.
➢Presents a flexible and interactive source of strategic information.

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A Concept for Information Delivery

Data warehousing is simple concept: Take all the data you already have in the organization,
clean and transform it, and then provide useful
strategic information.

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An Environment, Not a Product
• A data warehouse is not a single software or hardware product you
purchase to provide strategic information.
• It is, a computing environment where users can find strategic
information,
• An environment where users are put directly in touch with the data
they need to make better decisions.
• It is a user-centric environment

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Characteristics
• An ideal environment for data analysis and decision support
• Fluid, flexible, and interactive
• 100% user-driven
• Very responsive and conducive to the ask–answer–ask again pattern
• Provides the ability to discover answers to complex, unpredictable
questions

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A Blend of Many Technologies
• Take all the data from the operational systems.
• Where necessary, include relevant data from outside, such as industry
benchmark indicators.
• Integrate all the data from the various sources.
• Remove inconsistencies and transform the data.
• Store the data in formats suitable for easy access for decision making.

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A Blend of Many
Technologies
• Involves different functions: data
extraction, the function of loading the
data, transforming the data, storing the
data, and providing user interfaces.

• Different technologies are, therefore,

needed to support these functions.

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 • What types of processing take place in a
Quick Concept data warehouse? Describe.
• Why is data integration required in a data
Check warehouse, more so there than in an
operational application?

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References
• Ponniah, P., 2004. Data warehousing fundamentals: a
comprehensive guide for IT professionals. John Wiley & Sons.
• Ponniah, P., 2011. Data warehousing fundamentals for IT
professionals. John Wiley & Sons.
• Sarka, D., Lah, M. and Jerkic, G., 2012. Training Kit (Exam 70-
463): Implementing a Data Warehouse with Microsoft SQL
Server 2012. Microsoft Press.

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