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What Is a Data Warehouse and Why Should You Use One?

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What is a data warehouse?

A data warehouse is a centralized and organized repository of large amounts of data, allowing businesses to efficiently analyze and make informed decisions based on their information.

Analytics can be a time-consuming process. First you must gather the data you need, and then you organize it into coherent formats before you can start analyzing it. Don’t you wish there was an easier way to get high-quality insights from your data in less time?

Thankfully, there is. When you use a data management system, you can store and organize all your data in one central location, and use that data for your analytics. And the best type of data platform to use for analytics is a data warehouse.

But what is a data warehouse, and how can it benefit you?

Below, we’ll cover several points on this topic, including:

Keep reading to learn more.

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What is a data warehouse?

A data warehouse is a digital platform designed to store and organize information from across your business.

More specifically, data warehouses are intended to help with business intelligence (BI) functions, primarily analytics. They exist to hold data you can analyze and use to improve your business processes.

For that reason, all data stored in these warehouses is optimized for analytics.

Data warehouses vs. databases

It’s easy to assume that a data warehouse is the same thing as a standard company database — after all, the two sound similar in concept. And if we define a database as a system for storing business information, data warehouses count as a type of database.

That said, when people refer to a database, they’re talking about a data lake — that is, a database intended purely for storage and centralization. Data lakes don’t reorganize or reformat the data — they simply gather and store it.

Here are a few of the biggest differences between data warehouses and regular databases:

Database/data lake Data warehouse
Purpose Transactional Analytical
Data capture Direct from original data sources Pulled in from multiple databases
Data format Unformatted Reformatted and optimized for analytics
Data quality Non-curated (no particular organization of the data) Highly curated to arrange the data in the most relevant way

What are data marts?

You may have also heard of data marts, which are very similar to data warehouses. Data marts are smaller and more specific versions of data warehouses.

So, while a warehouse might encompass all the data across a business, a data mart focuses specifically on marketing data or sales data. The only significant difference is in scope or specificity.

You could also create a data warehouse by joining together several data marts from across your company.

Benefits of a data warehouse

Wondering why you need data warehouses for your company? Here are some of the biggest benefits that come with having one!

1. Centralization

The first major benefit of data warehouses is that they centralize all your company analytics data in one place. Without any data management system, you’re forced to visit each data source individually and manually bring your data together.

With a data warehouse, though, that’s not an issue. All your data is already compiled in one location, meaning that if you want to analyze it, all you need to do is open the warehouse and start looking at the information there.

2. History and reliability

Another advantage of using data warehouses is that they allow you to produce more reliable analytics. That’s because the longer you have a data warehouse, the more information it gathers, and the more accurate your analytics will be.

It comes down to sample size. Let’s say the data in your warehouse indicates that your customers want more of a particular feature. If you’re pulling that data from 10 customers, that’s not nearly as reliable as if you’re pulling it from 1000 customers.

Over long periods of time, the historical data builds up in your warehouse. As that happens, the analytics shift to reflect that larger sample size, providing more accurate results.

3. Quantity and quality

It’s not uncommon for people to debate when quantity is better than quality — and vice versa. Fortunately, you don’t have to worry about that with a data warehouse, because the data it contains includes both.

Data warehouses often have more data than ordinary databases. That’s because data warehouses pull data from multiple databases, meaning it gives you a lot of information to work to inform your business decisions.

Furthermore, that data is high-quality. Data warehouses carefully curate the data they pull in, reformatting and organizing that data in a way that is perfectly optimized for analytics.

4. Faster analytics

Finally, your data warehouse will significantly increase how quickly you perform your analytics. Ordinarily, analytics can be very time-consuming — you must spend time gathering, organizing, and activating the data before you begin the analysis.

But with a data warehouse, the gathering and organizing is already done for you. All you must do is pull it up and start analyzing. Consequently, you’ll get your results faster, allowing you to quickly apply those insights to your business going forward.

In short, using a data warehouse enables you to progress your business at a faster rate than you normally would, all without ever sacrificing the quality of your processes.

Learn how we increased traffic by over 40%, and conversions by over 100% for an ecommerce client.

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WebFX can help you get the most from your marketing data

Looking for some help with your marketing analytics? WebFX has you covered! We’ve been analyzing and reoptimizing marketing results for decades, earning us over 1,100 testimonials from our clients that speak to the quality of our services.

With our marketing analytics services, you’ll get help using your data warehouse and any other analytics platforms you may use to uncover new insights about your campaigns. We’ll also make sure to keep you in the loop about everything we do.

To get started with us, just call 888-601-5359 or contact us online today!

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