Wednesday, July 30, 2008

A Big Revolution in both the IT and business world: Data Warehouse

There is more than one company who has surely reaped the benefit from utilizing data warehousing. Thus it shouldn't be a big endeavor to find out some organizations that has been benefited by using data warehouse. I found out several companies that has achieved great success via Data Warehousing. In the next few paragraphs I am going to elaborate on the success that data warehousing resulted in, at those companies.

The first example can be that of Victoria's Secret. This company analyzes the status of every individual product by customer, by day, for each order that they get through their bricks-and-mortar stores as well as orders that they get through their website victoriassecret.com. The data warehouse that they have then enables Victoria's Secret to improve their prediction on any particular customer. It also enables the company to stay abreast of each order's profit equation. To measure the revenue of each order, Victoria's Secret starts with the merchandise price and subtracts shipping, handling, and related taxes, as well as special service charges, such as shipping upgrades and gift wrapping. This process means that the retailer can measure the profitability of every customer, order, catalog and product.

The next example can be that of Sears, Roebuck and Company, the largest department store chain and the third-largest retailer in the United States. Sears has 18 data centers, one in each 10 geographical regions as well as one each for marketing, finance and other departments. Frequent mismatches between accounting and sales figures and information scattered among numerous databases forced users to query multiple systems, even when they needed an answer to a simple query. Furthermore, there were errors when calculations were based on data from several sources. To solve these problems, Sears constructed a single sales information data warehouse. This replaced the 18 old databases which were packed with redundant, conflicting, and sometimes obsolete data. As has been the result, the data warehouse enabled Sears to monitor sales by item per store to create a sharp local market focus. Eventually, the sales and market share improved. Response times to queries have dropped from days to minutes for typical requests. Overall the strategic impact of the data warehouse implemented by Sears has been the fact that it offered Sears’s employees a tool for making better decisions. And at the end of the day, Sears retailing profits have climbed more than 20 percent annually. Kudos to the successful implementation and utilization of data warehouse.

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