Data Warehouse: Build vs Buy

The data your business generates and captures is among the one of the most important assets available to you and your employees. Unfortunately, the amount of data available is growing exponentially and it can quickly overwhelm many positions. One solution that allows businesses to better manage data is the data warehouse. The only question, is how can you tell when you need one for your business?

The case for getting a BI solution based on a data warehouse has actually become compelling, even for companies battling with layoffs and drastic cost cutting. Without one it is really tough to identify how to rebuild a business model around current levels of need. Trying to run a complex business in a highly competitive economic environment without a BI solution based data warehouse is filled with risk.


Testing pre-built Data Warehouses

We can see a growing number of totally and partly developed data warehouses. When more than one alternative is there, it is important to examine the advantages and disadvantages of each. Certainly the very first issue is whether the applications you use are fully supported including every version, module and release in use. Other requirements to consider consist of:

  • Time to value. For how long does it take to get the warehouse operational?
  • Design and stability of the data design. Absolutely nothing is more vital than this.
  • Quality of metadata. Well-designed metadata that is boosted gradually can be indispensable.
  • Availability of analytics and reports. The very best alternatives include beneficial prebuilt reports, dashboards and analytics.
  • Real time updating. How typically is the data warehouse synchronized?
  • ERP performance. Is the impact of data movement on ERP performance decreased?
  • Which BI tools are supported? Is one you already have or prefer readily available?
  • Performance history. Have others delighted in success with the data warehouse being offered?
  • Service offerings. What type of assistance is supplied and how good is the track record of those offering it?
  • Quality of maintenance and continuous support. Will you be on your very own after preliminary installation? Do improvements begin a regular basis?
  • Technical environment. Which servers, operating systems, databases and other tools are supported?
  • Performance. Design choices can have a big influence on performance and hardware cost.


The value of a data warehouse increases in time. It therefore pays to begin putting one in place as quickly as practical. Those who postpone starting down this path could continue to be at a drawback versus competitors that start sooner. Repayment in regards to business benefits comes quickly in many methods:

  • Difficult cost savings come from things like discovering lost discount rates in payables or that sales people are providing discount rates beyond authorized limits.
  • Real-time consolidation of financial data ends up being practical.
  • Debates stop over which source of data is correct.
  • The IT expenses and staff dedicated to reporting are considerably minimized.


Other reasons why the value of a data warehouse increases over time consist of:

  • Use of BI ends up being more widespread as users discover its value.
  • Users end up being more knowledgeable at drawing out beneficial information with experience.
  • Historical data becomes more valuable as the amount available increases.
  • Extra dashboards, pre-built analytics, and reports end up being available from vendors.
  • Metadata is added over time increasing the usefulness of the underlying data.
  • Software tools that build and access data continuously improve.
  • Additional data sources can be added to the warehouse.


With such an overwhelming list of advantages, it is easy to wonder why every organization does not already have a data warehouse. The only reason is that before the availability of prebuilt warehouses, custom production was an expensive, time-consuming, and expert-intensive process. Thousands of organizations, including the majority of the most successful businesses in the world, have made the investment to create data warehouses. Their pioneering work has made it much easier for those beginning today.

Data warehousing is now readily available to normal companies without the vast IT resources of the giants driven by the availability of prebuilt data warehouse solutions. It should therefore be no surprise that BI is one of the fastest growing segments of the IT industry. For those that do not yet have one, a BI system based on a data warehouse can seem like an unnecessary luxury. Once in place though, a properly built one virtually instantly becomes an important management tool.


Build vs Buy

Three alternatives are offered to acquire a data warehouse:

  • Buy it entirely prebuilt
  • Build it using frameworks
  • Create a custom warehouse


The easiest and most cost effective way to get the data warehouse you need is to buy it. Numerous options are available, especially for the most popular ERP suites including those from SAP and Oracle. The much better pre-built solutions make it possible to have a data warehouse up and running quickly, sometimes in just a few weeks. It is often possible to see a live demonstration using your very own data prior to dedicating to its purchase. When a full pre-built data warehouse solution is not available it is sometimes possible to buy frameworks from which a data warehouse can be created. This approach involves less time, cost, and risk than building your own warehouse.

In theory, frameworks can be customized to your special requirements. However, doing so is not always easy, low-cost, or foolproof. Success is highly dependent on the skills of those doing the customization. Ongoing maintenance and support can be a major headache for those that opt to use structures.

The least attractive option is to create a totally custom data warehouse. Doing so can sound simple– obtain an ETL tool and use it to move data from application databases into a data warehouse. In practice, this option turns out to be far more complicated. A significant percentage of those that have tried to do it themselves have either failed or spent far more money and time than planned.

Many companies have spent more than a million dollars during a year or more without being satisfied with the result. High ongoing maintenance costs never go away in this case. Those exploring the options for obtaining a data warehouse need to be aware that custom creation is sometimes strongly advocated by vendors that hope to generate additional income by doing so. The available prebuilt options should always be examined before aiming to build it yourself or contracting to have it done for you. The bottom line is that good friends do not let pals try to build their own data warehouses when there is no need to do so.

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