Data Warehouse

Data warehouses serve as a central repository for storing and analysing information to make
better informed decisions. An organization's data warehouse receives data from a variety of
sources, typically on a regular basis, including transactional systems, relational databases,
and other sources. A data warehouse is a centralized storage system that allows for the
storing, analysing, and interpreting of data in order to facilitate better decision-making.
Transactional systems, relational databases, and other sources provide data into data
warehouses on a regular basis.

A data warehouse is a type of data management system that is designed to enable and

support business intelligence (BI) activities, especially analytics. Data warehouses are solely
intended to perform queries and analysis and often contain large amounts of historical data.
The data within a data warehouse is usually derived from a wide range of sources such as
application log files and transaction applications.

A data warehouse centralizes and consolidates large amounts of data from multiple sources.
Its analytical capabilities allow organizations to derive valuable business insights from their
data to improve decision-making. Over time, it builds a historical record that can be
invaluable to data scientists and business analysts. Because of these capabilities, a data
warehouse can be considered an organization’s “single source of truth.”

A typical data warehouse often includes the following elements:

 A relational database to store and manage data

 An extraction, loading, and transformation (ELT) solution for preparing the data for
analysis
 Statistical analysis, reporting, and data mining capabilities
 Client analysis tools for visualizing and presenting data to business users

Key Characteristics of Data Warehouse

The main characteristics of a data warehouse are as follows:

 Subject-Oriented

A data warehouse is subject-oriented since it provides topic-wise information rather than the
overall processes of a business. Such subjects may be sales, promotion, inventory, etc. For
example, if you want to analyse your company’s sales data, you need to build a data
warehouse that concentrates on sales. Such a warehouse would provide valuable information
like ‘who was your best customer last year?’ or ‘who is likely to be your best customer in the
coming year?’

 Integrated
A data warehouse is developed by integrating data from varied sources into a consistent
format. The data must be stored in the warehouse in a consistent and universally acceptable
manner in terms of naming, format, and coding. This facilitates effective data analysis.

 Non-Volatile

Data once entered into a data warehouse must remain unchanged. All data is read-only.
Previous data is not erased when current data is entered. This helps you to analyse what has
happened and when. 

 Time-Variant

The data stored in a data warehouse is documented with an element of time, either explicitly
or implicitly. An example of time variance in Data Warehouse is exhibited in the Primary
Key, which must have an element of time like the day, week, or month.

How Data Warehouse Works

Data Warehousing integrates data and information collected from various sources into one
comprehensive database. For example, a data warehouse might combine customer
information from an organization’s point-of-sale systems, its mailing lists, website, and
comment cards. It might also incorporate confidential information about employees, salary
information, etc. Businesses use such components of data warehouse to analyze customers. 

Data mining is one of the features of a data warehouse that involves looking for meaningful
data patterns in vast volumes of data and devising innovative strategies for increased sales
and profits.  

Types of Data Warehousing

There are mainly three types of data warehousing, which are as follows:

 Enterprise Data Warehouse: Enterprise data warehouse is a centralized warehouse

that offers decision-making support to different departments across an enterprise. It
provides a unified approach for organizing as well as representing data. With this
warehouse at your end, you gain the ability to classify the data as per the subject and
grant the level of access to different departments accordingly.
 Operational Data Store: Popularly known as ODS, Operational Data Store is used
when an organization’s reporting needs are not satisfied by a data warehouse or an
OLTP system. In ODS, a data warehouse can be refreshed in real-time, making it best
for routine activities like storing employees’ records.
 Data Mart: As part of a data warehouse, Data Mart is particularly designed for a
specific business line like finance, accounts, sales, purchases, or inventory. The
warehouse allows you to collect data directly from the sources.
Data Warehouse Example

Let us look at some examples of how companies use data warehouse as an integral part of
their day-to-day operations.

Investment and Insurance companies use data warehouses to primarily analyse customer and
market trends and allied data patterns. In sub-sectors like Forex and stock markets, data
warehouse plays a significant role because a single point difference can result in huge losses
across the board.  

Retail chains use data warehouses for marketing and distribution, so they can track items,
examine pricing policies and analyse buying trends of customers. They use data warehouse
models for business intelligence and forecasting needs. 

Healthcare companies, on the other hand, use data warehouse concepts to generate treatment
reports, share data with insurance companies and in research and medical units. Healthcare
systems depend heavily upon enterprise data warehouses because they need the latest,
updated treatment information to save lives.