Executive Strategies

Document Management Magazine



DATA WAREHOUSE – OVERVIEW "A View From 10,000 Feet"

by Herbert F. Schantz, HLS Associates


Source: A Supplement to Washington Technology, "Data Warehousing", September 24, 1998


A Data Warehouse is a randomly accessible reliable source of data for generating information in a business system. It is also the union of its Constituent Data Marts. Data Marts are logical subsets of the Overall Data Warehouse. Today, there are believed to be about a thousand Data Warehouse installations in the United States actually integrated into the business enterprises.

The objective of a Data Warehouse is to:

    • Serve as the company’s principal source of information for business planning and decision making.
    • Be the central and secure source of all business information;
    • For those who have a "need to know" make information readily available;
    • Index and Store Business Information in a secure, reliable, and randomly retrievable form;

The major output of a Data Warehouse is the vast amount of information that is available for decision making. Decisions are made from information generated from the data in the warehouse. The crux of a Data Warehouse is its integration into automatic management systems that help business executives and planners make viable plans and accurate decisions.

The primary reason for the small number of data warehouses currently installed can be attributed to the perception of the large time and financial resources required to design, build, test, and implement a data warehouse. Experts estimate that between 60 percent and 70 percent of the cost of designing, developing, testing, and installing a data warehouse is: (1) the purification of the data and then (2) the transmission of the data to the respective warehouse for storage and use.

With respect to the U.S. Imaging and Information Technology Markets, 1,000 data warehouse installations is a small percentage of the Total Available Market (TAM) for data warehouses. The Data Warehousing Institute claims that about 3,000 companies are currently implementing data warehousing. This is 3,000 out of a total population (TAM) of more than 20 million businesses in the United States that could use data warehousing. Today, 2,400 (eighty percent) of data warehouse users are small businesses. Thus, there is still a large market for large companies and enterprises to implement data warehouses to centralize and formalize the corporate decision resource. Today, business is getting more and more competitive in the global marketplace. The successful business in the global market will be those companies who are the most productive and have the best information readily available for decision-making. Data Warehouses contribute significantly to helping provide an overall system solution to these needs.

The implementation of a Data Warehouse will most likely effect a reorganization of the business. This is change. And change is resisted. A data warehouse can be a substantial management challenge in any business. It will result in new organizational structures, new responsibilities, and new ways of doing business. CHANGE. Unless the organization is ready and willing to undergo this turbulence, building a data warehouse could be expensive and counter productive. The same truth applies to Workflow and Electronic Document Management Systems relative to a company’s work processes. In both instances the organizations and work processes must change for the benefits of information technology to significantly reduce the operational costs and increase the productivity of the business and the competitiveness of the business in the global market place.


The Future

For those who successfully implement data warehousing, the increases in productivity and cost reduction can be substantial. The key to cost justifying a data warehouse lies in relationship between specific business objectives and the cost of the data to effect these objectives. The availability of accurate and timely information is the justification for substantial changes to a company’s work processes. The use of data warehouses require the movement from traditional automation of existing manual work processes to the new era of networked integrated imaging systems as found in the "Third Wave" environment. These "Third Wave" systems require the use of more information for optimum solutions.

A recent data warehouse forecast was published in July 1998 in a paper titled, "Database Solutions," by Michael Burwen of the Palo Alto Management Group Inc. According to Burwen: "The worldwide market for database solutions expenditures is forecast to grow at an average annual growth rate of 51 percent over the period 1997-2002 to more than $113 billion in 2002. This forecast is consistent with last year’s study that considered only those systems having at least 100 gigabytes of useful data." Thus, we continue to believe that this market sector will become one of the most viable market sectors in the United States Imaging and Information Technology Markets. (Especially in the market segment that relates to high-end, client server platforms and large-scale Electronic Document Management Systems [EDMS]). Without a doubt, the use of Data Warehousing will have a profound effect on EDMS and the way companies do business. Those who use Data Warehousing and do not "Repave the Cow Path" will be the successful enterprises of the future. In the next five years, those enterprises that ignore or delay the implementation of Data Warehousing will be less than fully competitive in the global marketplace. Those who resist change and "Repave and Cow Path" and those who ignore data warehousing will fail.