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What is the true value of data warehousing?

Henry Ford is attributed to have said, "You can have any color car that you want, as long as it is black."

What is the true Value of Data Warehousing? One must always ask this question, whether you are starting out in the development process or have had one for years. In my opinion, data warehousing can provide a great deal to any organization that wishes to use it to its fullest extent. The issue is how well are you using it? I believe that most data warehouses are still being used mostly for reporting purposes and not maximizing the real promise of the data warehouse: providing strategic analysis.

There are many issues that we need to address when determining the value of data warehousing. The one I would like to address in this article is the concept of false trends. False trends are when your analysis provides for a trend that, in fact, is not a real trend. The best example is described this way. Assume that you and I are working for Ford Motor Company in the early days of automobiles and we are looking to see if the color of cars makes a different in the buying patterns of our customers. So we took the transaction systems and built a data warehouse and then asked the question "What color automobiles make up the largest percentage of sales?" using our Business Intelligence tool. What do you think the results would be? Remember what Henry Ford is attributed to have said. Correct! The answer would be that 100% of all automobiles where sold as black colored cars. Based on this information, should we produce cars with any color other than black? If we trust our transaction systems, then the answer is yes. However, I am not convinced. Is this a true trend or a false trend? While it is true that 100% of all transactions sold black colored cars, I am not convinced (at least knowing what we know today!) that this is a true trend.

This example shows a big problem with the data warehouse. It can only show you data that you received from your transaction system and other external systems. Finding trends may be easy, but are they real trends. As an organization, we need to take the next step to determine whether this is a true trend or a false trend. The issue at hand is trying to determine whether this transaction is what I call a WALLET SHOT or a FACE SHOT.

A WALLET SHOT is a financial transaction that has no idea of whether the purchase was one that was wanted or one that was needed at the moment. Going back to our example, the fact that every person bought a black colored car is a WALLET SHOT. If there were some way to determine what the purchasers happiness level was, that would be a FACE SHOT. Most (if not all) transactions captured today contain WALLET SHOTS. This is why we must not take for granted that all trends found within the transaction system are true trends. Many can be false trends. Somehow, we need to be able to capture the FACE SHOT. Yes, indeed, I know that this is not easy. If everything in computing were easy, there would be no problems to solve.

One "value" of the data warehouse at the moment is the ability to determine trends. However, there must still be research done to determine whether the trend is a True Trend or a False Trend.

About the Author

Chuck Kelley is president and founder of Excellence In Data, Inc. and an internationally known expert in database technology. He has more than 20 years of experience in designing and implementing operational/production systems and data warehouses. Kelley has worked in some facet of the design and implementation phase of more than 35 data warehouses and data marts. He also teaches seminars, co-authored a book with W. H. Inmon on data warehousing and has been published in many trade magazines on database technology, data warehousing and enterprise data strategies. Please feel free to email him at with comments (negative or positive) about this column or ideas for future columns.

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