Data Warehouses Can Become Treasure Troves.

One of the biggest challenges businesses face today is unlocking the value in their data warehouses. One key is using data mining for marketing purposes. But there are other ways data warehousing can transform mountains of data into timely, comprehensive information that can be easily accessed, analyzed and formatted.

A new study -- due out this quarter -- from Financial Executives Research Foundation, Data Warehouses: More Than Just Mining by Barbara J. Bashein and M. Lynne Markus, finds four distinct uses for data warehouses: management reporting/decision support; systems and organizational integration; data mining; and new data products.

One need common to most firms, including those in the study (ALARIS Medical Systems, Kraft Foods, MSC.Software and Cardinal Health), is a good technological environment for management reporting and decision support. For example, MSC.Software (a provider of products and services for engineers) and Cardinal Health wanted to improve their routine management reporting, but for different reasons. MSC.Software wanted to beef up reporting and forecasting revenues from multi-year software leases. Cardinal Health needed to tell its customers how much they were buying. Without integrated sales and inventory tracking systems, these companies couldn't adequately answer their customers' questions. Through data warehousing, they reduced inefficiencies in the production and distribution of these reports.

Many organizations also suffer from a lack of integration in their core processing systems. At Kraft Foods, for example, different product divisions had developed their own systems to perform similar tasks. As a result, the company's information about a customer, for instance, was spread across dozens of incompatible systems. Data warehousing consolidated them.

Yours, Mine and Ours

Data mining, widely viewed as the rationale for data warehousing, most often is developed for internal use. For example, Cardinal Health found it had a huge amount of data it wasn't fully utilizing. Once the company made better strategic use of the information in its data warehouse, it found new sources of revenue. Through data warehousing, it also could deliver new data products developed inhouse to external customers.

Data warehousing recommendations aren't "one-size-fits-all." Companies vary by industry, size, competitive environment, IT sophistication and resources; each will have unique reasons for using the technology. Likewise, implementation will generate company-specific issues. Therefore, the authors advise companies to benchmark their approach against other firms with similar circumstances and goals.

Mary Ann N. Cashman is a freelance writer and editor.