Data Warehousing is a technique that is mainly used to collect and manage data from various sources to give the business a meaningful business insight. A data warehouse is specifically designed to support management decisions.
In simple terms, a data warehouse defines a database that is maintained independently from an organization’s operational databases. Data warehouse systems enable the integration of several application systems. They provide data processing by supporting a solid platform of consolidated, historical information for analysis.
The technology of the Data warehouse includes data cleaning, data integration, and online analytical processing (OLAP), that is, analysis techniques with functionalities such as summarization, consolidation, and aggregation as well as the ability to view information from different angles.
The creation of data warehouses includes data cleaning, data integration, and data transformation and can be viewed as an important preprocessing step for data mining.
It provides online analytical processing (OLAP) tools for the interactive analysis of multidimensional data of varied granularities, which facilitates effective data generalization and data mining. There are several data mining functions, including association, classification, prediction, and clustering can be integrated with OLAP operations to boost interactive mining of knowledge at various levels of abstraction.
A data warehouse is a repository of an organization’s electronically saved information. Data warehouses are designed to facilitate reporting and analysis. It provides several advantages to business analysts as follows −
A data warehouse can support a competitive advantage by displaying relevant data from which to measure performance and make critical adjustments to support win over competitors.
A data warehouse can enhance business productivity since it can quickly and efficiently gather information, which accurately describes the organization.
A data warehouse facilitates customer relationship marketing since it provides a consistent view of customers and items across all lines of business, all departments, and all markets.
A data warehouse can bring about cost reduction by tracking trends, designs, and exceptions over long periods constantly and accurately.
A data warehouse supports a common data model for all data of interest, regardless of the data’s source. This makes it simpler to report and analyze data than it would be if multiple data models from disparate sources were used to retrieve data including sales invoices, order receipts, general ledger charges, etc.
Because they are separate from operational systems, data warehouses provide retrieval of data without slowing down operational systems.