It can be challenging to make use of data if you have multiple databases across your business. Suppose you have a customer database, purchase history database, and customer rewards database. In order to answer questions that require data from each database, you will likely have to export the purchase history and customer rewards data, then merge with your customer database. This may work fine for a one-off scenario, but for every time you want to run the same queries, you will need to run the export/merge process again.
The solution to analyzing data from multiple databases is to create a data warehouse. A data warehouse is a database that is optimized for storing massive amounts of data and quickly retrieving data. The data warehouse would be a new database that is continuously updated from your other databases. Using the example above, you would continue to maintain your customer database, purchase history database, and customer rewards database, with the addition of a data warehouse that contains data from the other three databases.
Another benefit to having a data warehouse is the ability to maintain historical data. Having a historical perspective into your data can be extremely valuable over time. Continuing our example, imagine asking the question “How well did quarter 2 sales go for the last three years with x promotion compared to the current quarter 2 sales with y promotion?” Incorporating a data warehouse enables deep insight into your data over time.
If you have disparate databases and want to analyze data from a single data source, a data warehouse will allow up-to-date merging of all your data without affecting the operations of existing systems.