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What is a Data Warehouse?

A data warehouse stores… data. But its technology is much more sophisticated than its name. A data warehouse allows you to consolidate data from several sources (i.e. other software systems) and then perform queries and analyses.

Let’s say, for example, you want to determine the profitability of a new product line in Q3 of 2011. You would need to pull manufacturing cost information from your enterprise resource planning (ERP) software, distribution and transportation costs from your supply chain management system, and finally, marketing campaign costs from your marketing software system. You would then need to compare this with revenue data from your accounting system. All this data would be extracted from these operational systems and then aggregated and organized in a data warehouse. Users would then run queries from the data warehouse, or more accurately, from data marts which are considered to be the access layer.

Example of a Data Warehouse

A data warehouse is organized in a way that is optimized for complex analysis of data from multiple systems, whereas the underlying operational systems are optimized to handle a high volume of transactions specific to their function.

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