Introduction to Data

Warehousing
Definition and importance of data warehousing
Data warehousing architecture
Differences between operational databases and data warehouses
Definition and Importance of Data Warehousing
Objective: To understand the concept of data warehousing and its
significance in modern data management.
Definition of Data Warehousing:
• A data warehouse is a centralized repository that stores integrated
data from multiple sources for analysis and reporting.
• It is designed to support decision-making processes by providing a
comprehensive view of organizational data.
Importance of Data Warehousing:
• Facilitates business intelligence and analytics: Data warehouses enable
organizations to analyze historical data trends, identify patterns, and make
informed decisions.
• Improved data quality and consistency: By integrating data from disparate
sources, data warehouses help maintain consistency and accuracy in
reporting.
• Enhanced decision-making: Access to timely and reliable data empowers
decision-makers at all levels of the organization.
• Competitive advantage: Organizations with effective data warehousing
strategies can gain insights into market trends, customer behavior, and
operational performance, giving them a competitive edge.
Data Warehousing Architecture
• Objective: To familiarize students with the architecture of a typical
data warehouse system.
Components of Data Warehousing Architecture:
• Data Sources: Operational databases, external data feeds, flat files, etc.
• ETL (Extract, Transform, Load) Process: Extracting data from source
systems, transforming it to fit the data warehouse schema, and loading
it into the warehouse.
• Data Warehouse Database: The central repository where integrated
data is stored for analysis.
• Data Mart: A subset of the data warehouse focused on a specific
business area or department.
• Business Intelligence Tools: Reporting, analytics, and visualization tools
used to extract insights from the data.
Examples:
Data Sources:
• Example: An online retailer gathers customer orders, inventory data, and website traffic logs.
ETL Process:
• Example: Data is extracted from the retailer's databases, transformed to fit a standard format, and
loaded into the warehouse.
Data Warehouse Database:
• Example: The retailer's central data warehouse stores integrated customer, inventory, and sales data.
Data Mart:
• Example: Within the warehouse, a sales data mart focuses specifically on revenue and product sales
trends.
Business Intelligence Tools:
• Example: The retailer uses tools like Tableau to create visual reports on sales performance and
customer behavior.
Types of Data Warehousing Architectures:
• Inmon vs. Kimball: Inmon advocates for building a centralized data
warehouse, while Kimball favors a dimensional approach with data
marts.
• Federated Data Warehouse: Combines data from multiple data
warehouses or data marts without physically integrating them.
Significance:
• The debate between Inmon and Kimball represents two contrasting
approaches to data warehousing architecture. Understanding the
differences between them is crucial for organizations when designing
their data management strategies.
Difference:
• Inmon's Centralized Data Warehouse Approach:
• Significance: Inmon's approach emphasizes building a centralized
data warehouse as the single source of truth for the entire
organization. Data is integrated at the enterprise level, providing a
consistent and unified view of organizational data.
• Example: Imagine a large retail corporation with multiple
departments such as sales, marketing, and finance. Inmon's approach
would involve consolidating data from all these departments into a
centralized data warehouse. This allows analysts and decision-makers
to access comprehensive and integrated data for cross-functional
analysis and reporting.
Kimball's Dimensional Approach with Data Marts:
• Significance: Kimball's approach focuses on creating data marts, which are
smaller, specialized data warehouses tailored to specific business areas or
departments. Each data mart is designed using a dimensional modeling
technique, such as star schema or snowflake schema, optimized for querying
and analysis.
• Example: Continuing with the example of the retail corporation, under
Kimball's approach, separate data marts would be created for each
department, such as sales data mart, marketing data mart, and finance data
mart. Each data mart contains only the relevant data for its respective
department, organized in a dimensional model. This approach offers
flexibility and agility, allowing departments to have autonomy over their
data while still benefiting from centralized governance and standards.
Example:
• Federated Data Warehouse Explanation:
• In a federated data warehouse setup, imagine your company has
separate data warehouses for different regions or departments.
Instead of merging them into one big warehouse, the federated
approach lets you query them individually but seamlessly.
• For example, if you want to analyze sales globally, the system
automatically gathers and presents data from each warehouse, giving
you a unified view without physically integrating them. This simplifies
management while providing comprehensive insights for decision-
making.
Differences Between Operational Databases
and Data Warehouses
• Objective: To differentiate between operational databases and data
warehouses and understand their respective roles.
Operational Databases:
• Designed for transactional processing and day-to-day
operations.
• Optimized for read and write operations, focusing on data
integrity and concurrency.
• Schema is normalized to minimize redundancy and ensure
data consistency.
• Examples include OLTP (Online Transaction Processing)
databases used in banking, e-commerce, etc.
Data Warehouses:
• Optimized for analytical processing and decision support.
• Schema is denormalized for faster query performance and easier
analysis.
• Historical data is retained for trend analysis and forecasting.
• Examples include data warehouses used for business intelligence,
reporting, and data analysis
Conclusion:
• Data warehousing plays a crucial role in modern data
management, enabling organizations to harness the power
of data for strategic decision-making. Understanding the
fundamentals of data warehousing, including its architecture
and differences from operational databases, is essential for
anyone working with data in today's digital landscape.