1. Data Warehouse Concepts Ppt

Download Presentation PowerPoint Slideshow about 'CHAPTER 1: The Compelling Need for Data Warehousing' - hateya An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. As an information technology professional, you have worked on computer applications as an analyst, programmer, designer, developer, database administrator, or project manager. You have been involved in the design, implementation, and maintenance of systems that support day-to-day business operations. Depending on the industries you have worked in, you must have been involved in applications such as order processing, general ledger, inventory, in-patient billing, checking accounts, insurance claims, and so on. These applications are important systems that run businesses. They process orders, maintain inventory, keep the accounting books, service the clients, receive payments, and process claims.

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Without these computer systems, no modern business can survive. Companies started building and using these systems in the 1960s and have become completely dependent on them. As an enterprise grows larger, hundreds of computer applications are needed to support the various business processes. These applications are effective in what they are designed to do.

They gather, store, and process all the data needed to successfully perform the daily operations. They provide online information and produce a variety of reports to monitor and run the business. Spread globally, and competition became fiercer, business executives became desperate for information to stay competitive and improve the bottom line. 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. They wanted to know where to build the next warehouse, which product lines to expand, and which markets they should strengthen.

The operational systems, important as they were, could not provide strategic information. Businesses, therefore, were compelled to turn to new ways of getting strategic information. Data warehousing is a new paradigm specifically intended to provide vital strategic information. Who needs strategic information in an enterprise?. What exactly do we mean by strategic information?. 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. For making decisions about objectives, executives and managers need information for the following purposes:. To get in-depth knowledge of their company’s operations. Learn about the key business factors and how these affect one another. Monitor how the business factors change over time. Compare their company’s performance relative to the competition and to industry benchmarks. Customers’ needs and preferences.

Emerging technologies. Sales and marketing results.

Quality levels of products and services. Think of all the various computer applications in your company. Think of all the databases and the quantities of data that support the operations of your company. How many Years worth of customer data is saved and available? Where is all this data?

On one platform? In legacy systems? In client/server applications?. We are faced with two startling facts:.

Organizations have lots of data. Informationtechnology resources and systems are not effective at turning all that data into useful strategic information. Organizations, why can’t our executives and managers use this data for making strategic decisions? Lots and lots of information exists. Why then do we talk about an information crisis?

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. Incompatible structures and systems. Your order processing system might have been developed earlier and is running on an old mainframe. Your later credit assignment and verification system might be on a client/server platform and the data for this application might be in relational tables. The data in a corporation resides in various disparate systems, multiple platforms, and diverse structures. The more technology your company has used in the past, the more disparate the data of your company will be.

But, for proper decision making on overall corporate strategies and objectives, we need information integrated from all systems. 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. Trends of a single product over the period of a month, a quarter, or a year.

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.

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. These have made computing faster, cheaper, and widely available. But what is their relevance to the escalating need for strategic information? 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. Analysts, executives, and managers use strategic information interactively to analyze and spot business trends. 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.

This stage was an attempt by IT to 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.

Small Applications. In this stage, IT formalized the extract process. 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.

Corporations created what were called information centers. The information center typically was a place where users 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. Decision-Support Systems. In this stage, 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 decision-support systems 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.

Every one of the past attempts at providing strategic information to decision makers was unsatisfactory. Figure 1-4 depicts the inadequate attempts by IT to provide strategic information. 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. What is a basic reason for the failure of all the previous attempts by IT to provide strategic information? The fundamental reason for the inability to provide strategic information is that we have been trying all along to provide strategic information from the operational systems. These operational systems such as order processing, inventory control, claims processing, outpatient billing, and so on are not designed or intended to provide strategic information. If we need the ability to provide strategic information, we must get the information from altogether different types of systems.

Only specially designed decision support systems or informational systems can provide strategic information. Let us understand why. 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 so called bread-and-butter systems. Operational systems make the wheels of business turn (see Figure 1-5). 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. Get the data in Figure 1-5 Operational systems. 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 (see Figure 1-6).

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. Get the information out Figure 1-6 Decision-support systems.

Data Warehouse Concepts Ppt

We now realize that we do need different types of decision support systems to provide strategic information. The type of information needed for strategic decision making is different from that available from operational systems. We need a new type of system environment for the purpose of providing strategic information for analysis, discerning trends, and monitoring performance. Let us examine the desirable features and processing requirements of this new type of system environment. Let us also consider the advantages of this type of system environment designed for strategic information.

This new system environment that users desperately need to obtain strategic information happens to be the new paradigm of data warehousing. Enterprises that are building data warehouses are actually building this new system environment. This new environment is kept separate from the system environment supporting the day-to-day operations. The data warehouse essentially holds the business intelligence for the enterprise to enable strategic decision making. The data warehouse is the only viable solution. We have clearly seen that solutions based on the data extracted from operational systems are all totally unsatisfactory.

Figure 1-8 shows the nature of business intelligence at the data warehouse. Contains critical measurements of the business processes stored along business dimensions. For example, a data warehouse might contain units of sales, by product, day, customer group, sales district, sales region, and promotion. Here the business dimensions are product, day, customer group, sales district, sales region, and promotion. From where does the data warehouse get its data? The data is derived from the operational systems that support the basic business processes of the organization.

In between the operational systems and the data warehouse, there is a data staging area. In this staging area, the operational data is cleansed and transformed into a form suitable for placement in the data warehouse for easy retrieval. We have reached the strong conclusion that data warehousing is the only viable solution for providing strategic information. We arrived at this conclusion based on the functions of the new system environment called the data warehouse. So, let us try to come up with a functional definition of the data warehouse. 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.

In the final analysis, data warehousing is a simple concept. It is born out of the need for strategic information and is the result of the search for a new way to provide such information. The methods of the last two decades using the operational computing environment, were unsatisfactory. The new concept is not to generate fresh data, but to make use of the large volumes of existing data and to transform it into forms suitable for providing strategic information. The data warehouse exists to answer questions users have about the business, the performanceof the various operations, the business trends, and about what can be done to improve the business.

The data warehouse exists to provide business users with direct access to data, to provide a single unified version of the performance indicators, to record the past accurately, and to provide the ability to view the data from many different perspectives. In short, the data warehouse is there to support decisional processes. 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. A data warehouse is not a single software or hardware product you purchase to provide strategic information. It is, rather, a computing environment where users can find strategic information, an environment where users are put directly in touch with the data they need to make better decisions.

It is a user-centric environment. Let us summarize the characteristics of this new computing environment called the data warehouse:. 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.

Let us reexamine the basic concept of data warehousing. The basic concept of data warehousing is:. Take all the data from the operational systems. Where necessary, include relevant data from outside, such as industry benchmark indicators.

Integrate all the data from the various sources. Remove inconsistencies and transform the data. Store the data in formats suitable for easy access for decision making Although a simple concept, it involves different functions: data extraction, the function of loading the data, transforming the data, storing the data, and providing user interfaces. Companies are desperate for strategic information to counter fiercer competition, extend market share, and improve profitability. In spite of tons of data accumulated by enterprises over the past decades, every enterprise is caught in the middle of an information crisis.

Information needed for strategic decision making is not readily available. All the past attempts by IT to provide strategic information have been failures.

This was mainly because IT has been trying to provide strategic information from operationalsystems. Informational systems are different from the traditional operational systems. Operational systems are not designed for strategic information.

We need a new type of computing environment to provide strategic information. The data warehouse promises to be this new computing environment. Data warehousing is the viable solution.

There is a compelling need for data warehousing for every enterprise.