Data Warehouses

FPT University
Hanoi 2010
Lecture 1: Introduction to Data
Warehouse and Data
Warehousing
Overview
 Escalating Need for Strategic Information
 Failures of Past Decision-Support Systems
 Operational Versus Decision-Support Systems
 Data Warehousing—The Only Viable Solution
 Data Warehouse Defined
Escalating Need for Strategic
Information (1)
 In 1960s, companies started using
computer systems to support business
operations:
 process orders,
 maintain inventory,
 keep the accounting books,
 service the clients,
 receive payments, and process claims.
Escalating Need for Strategic
Information (2)
 Nowadays, businesses get more complex.
 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
readily used to make strategic decisions ->
new type of getting strategic information
Escalating Need for Strategic
Information (3)
 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.
 The next figure shows a sample of strategic
areas where data warehousing is already
producing results in different industries.
Strategic information (1)
 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.
 The types of information needed to make decisions in
the formulation and execution of business strategies and
objectives are broad-based and encompass the entire
organization. We may combine all these types of
essential information into one group and call it strategic
information
Strategic information (2)
 Strategic information is not for running the
day-to-day operations of the business.
 It is not intended to produce an invoice, make
a shipment, settle a claim, or post a
withdrawal from a bank account.
 Strategic information is far more important for
the continued health and survival of the
corporation.
 Critical business decisions depend on the
availability of proper strategic information in
an enterprise.
Strategic information (3)
Information Crisis (1)
 We are faced with two unexpected facts:
 (1) organizations have lots of data;
 (2) information technology resources and
systems are not effective at turning all that
data into useful strategic information.
 Over the past two decades, companies
have accumulated tons and tons of data
about their operations. Mountains of data
exist. Information is said to double every
18 months.
Information Crisis (2)
 Most companies are faced with an
information crisis not because of lack of
sufficient data, but because the available
data is not readily usable for strategic
decision making.
 These large quantities of data are very
useful and good for running the business
operations, but hardly amenable for use in
making decisions about business
strategies and objectives.
Information Crisis (3)
 Data needed for strategic decision making must be in a
format suitable for analyzing trends.
 Executives and managers need to look at trends over
time and steer their companies in the proper direction.
 The tons of available operational data cannot be readily
used to spot trends.
 Operational data is event-driven. You get snapshots of
transactions that happen at specific times.
 You have data about units of sale of a single product in a
specific order on a given date to a certain customer.
 In the operational systems, you do not readily have the
trends of a single product over the period of a month, a
quarter, or a year.
Information Crisis (4)
 For strategic decision making, executives and
managers must be able to review data from
different business viewpoints.
 For example, they must be able to review sales
quantities by product, salesperson, district,
region, and customer groups. Can you think of
operational data being readily available for such
analysis?
 Operational data is not directly suitable for
review from different viewpoints.
Technology Trends
 Providing strategic information requires
collection of large volumes of corporate
data and storing it in suitable formats.
 Technology advances in data storage
and reduction in storage costs readily
accommodate data storage needs for
strategic decision-support systems
Technology Trends
Opportunities and Risks related
to strategic information???
 Examples
 Significant improvements in health care programs are
realized, resulting in a 22% decrease in emergency
room visits, 29% decrease in hospital admissions for
asthmatic children, …
 At one of the top five U.S. retailers, strategic
information combined with Web-enabled analysis tools
enables merchants to keep the right products in front of
the right people at the right place at the right time
FAILURES OF PAST DECISION-
SUPPORT SYSTEMS
 History of Decision-Support
Systems
 Ad Hoc Reports (as occasion requires). This was the
earliest stage. Users, especially from Marketing and
Finance, would send requests to IT for special reports.
IT would write special programs, typically one for each
request, and produce the ad hoc reports.
 Special Extract Programs. Anticipate somewhat the
types of reports that would be requested from time to
time. IT would write a suite of programs and run the
programs periodically to extract data from the various
applications. IT would create and keep the extract files
to fulfill any requests for special reports. For any
reports that could not be run off the extracted files, IT
would write individual special programs.
 History of Decision-Support
Systems
 Small Applications. IT would create simple applications
based on the extracted files. The users could stipulate the
parameters for each special report. The report printing
programs would print the information based on user-specific
parameters. Some advanced applications would also allow
users to view information through online screens.
 Information Centers. In the early 1970s, some major
corporations created what were called information centers.
The information center typically was a place where users
could go to request ad hoc reports or view special
information on screens. These were predetermined reports
or screens. IT personnel were present at these information
centers to help the users to obtain the desired information.
 History of Decision-Support
Systems
 Decision-Support Systems. Companies began to build more
sophisticated systems intended to provide strategic information. Again,
similar to the earlier attempts, these systems were supported by extracted
files. The systems were menu-driven and provided online information and
also the ability to print special reports. Many of such DSSs were for
marketing.
 Executive Information Systems.
 This was an attempt to bring strategic information to the executive desktop.
 The main criteria were simplicity and ease of use.
 The system would display key information every day and provide ability to
request simple, straightforward reports. However, only preprogrammed
screens and reports were available.
 After seeing the total countrywide sales, if the executive wanted to see the
analysis by region, by product, or by another dimension, it was not possible
unless such breakdowns were already preprogrammed.
 This limitation caused frustration and executive information systems did not
last long in many companies.
Inability to Provide Information
 Every one of the past attempts at providing strategic information to
decision makers was unsatisfactory.
 Here are some of the factors relating to the inability to provide
strategic information:
 IT receives too many ad hoc requests, resulting in a large overload.
With limited resources,
 IT is unable to respond to the numerous requests in a timely fashion.
 Requests are not only too numerous, they also keep changing all the
time. The users need more reports to expand and understand the earlier
reports.
 The users find that they get into the spiral of asking for more and more
supplementary reports, so they sometimes adapt by asking for every
possible combination, which only increases the IT load even further.
 The users have to depend on IT to provide the information. They are not
able to access the information themselves interactively.
 The information environment ideally suited for making strategic decision
making has to be very flexible and conducive for analysis. IT has been
unable to provide such an environment.
OPERATIONAL VERSUS
DECISION-SUPPORT SYSTEMS
 Making the Wheels of Business Turn: 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.
 They are the socalled bread-and-butter systems.
 Operational systems make the wheels of business turn. They
support the basic business processes of the company.
 These systems typically get the data into the database.
 Each transaction processes information about a single entity
such as a single order, a single invoice, or a single customer.
OPERATIONAL VERSUS
DECISION-SUPPORT SYSTEMS
 Watching the Wheels of Business Turn: On the other
hand, specially designed and built 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 get strategic
information out of the database, as opposed to OLTP
systems that are designed to put the data into the
database.
 Decision-support systems are developed to provide
strategic information.
 DATA WAREHOUSING—THE
ONLY VIABLE SOLUTION
 A New Type of System Environment
 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
 DATA WAREHOUSING—THE
ONLY VIABLE SOLUTION
 Processing Requirements in the New
Environment: Most of the processing in the new
environment for strategic information will have to be
analytical. There are four levels of analytical
processing requirements:
 Running of simple queries and reports against current and
historical data
 Ability to perform “what if ” analysis is many different ways
 Ability to query, step back, analyze, and then continue the
process to any desired length
 Spot historical trends and apply them for future results
Business Intelligence at the Data
Warehouse
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 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
DATA WAREHOUSE DEFINED
 Data warehousing is really a simple
concept:
 Take all the data you already have in the
organization, clean and transform it, and
then provide useful strategic information.
 What could be simpler than that?
An Environment, Not a Product
 An ideal environment for data analysis and
decision support
 Fluid, flexible, and interactive 100 percent user-
driven
 Very responsive and conducive to the ask–
answer–ask–again pattern
 Provides the ability to discover answers to
complex, unpredictable questions
A Blend of Many Technologies
Practical understanding
 “A data warehouse is simply a single, complete, and
consistent store of data obtained from a variety of
sources and made available to end users in a way they
can understand and use it in a business context” – Barry
Devlin, IBM Consultant
 “A data warehouse is a database of data gathered from
many systems and intended to support management
reporting and decision making” – Michael Corey et al,
CTO of OneWarranty.com
Two-dimensional data warehouse Three-dimensional data warehouse
History
Question
 What do we mean by strategic
information? For a commercial bank,
name five types of strategic objectives.