Data Warehousing Pros and Cons

by Olga BelokurskayaApril 25, 2009

First, let’s remember what a data warehouse is, and why it may be useful for a business.

In fact, it is a repository of an organization’s data which is electronically stored, and it is designed to facilitate reporting and analysis. The broader meaning of data warehouse focuses not only on data storage, but the means to retrieve and analyze data, to extract, transform, and load data, and to manage the data dictionary are also considered essential components of a data warehousing system.

Data warehousing architecture (Image credit)

Today, data warehousing is a popular approach and is frequently used as a business model. However, not every system is applicable to every business setting. So when thinking about implementing the strategy, one should consider pros and cons of data warehousing.

Among the major benefits of data warehousing is enhanced access to data and information and easy reporting and analysis. Besides:

  • Data retrieval is faster within data warehouses.
  • Prior to loading data into the data warehouse, inconsistencies are identified and resolved.
  • Data warehouses can work in conjunction with and, hence, enhance the value of operational business applications, such as, for example, CRM systems.

And here are some cons:

  • Preparation is very frequently time consuming for effort is needed to create a cohesive, compatible system of data collection, storage, and retrieval. Moreover, because data must be extracted, transformed and loaded into the warehouse, there is an element of latency in data warehouse data.
  • Compatibility with existing systems. The use of data warehousing technology may require a company to modify the database system already in place. This could really be the foremost concern of businesses when adapting the model given the cost of the computer systems and software needed.
  • Security flaws that data warehousing technology may contain. If the database contains sensitive information, its use may be restricted to a limited group of people and precautions will be required to insure that access is not compromised. Limited data access situations can also effect the overall utilization of the data strategy.
  • Over their life, data warehouses can have high costs. The data warehouse is usually not static, it gets outdated and needs regular maintenance, which may be quite costly.

So, before any implementations, one should make sure that data warehousing will be a good fit for the business and be prepared to commit to the level of work required to get the system in place. However, once a data warehouse starts working, most companies are glad to have their “corporate memory.”