Group 4 Research Paper & Slides
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Group 4 Research Paper & Slides
Group 4 Research Paper & Slides
Lauren Wiley, Stella Richards, Urenwa Nwokiwu
University of Maryland Global Campus
ISAS 640 9040 Decision Support Systems and Expert Systems (2238)
Tonya Miller
October 31, 2023
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Group 4 Research Paper & Slides
Introduction
Data warehousing can be used by all sizes of organizations and organizations in different industries. Advancements in data warehousing have made it available to organizations who would consider this technology a capital expense or lack of funds to support the technology. Data warehousing provides many advantages for organizations regardless of their size since the cloud allows small and medium organizations to use this technology and not have to invest a lot of resources in supporting it since cloud-based data warehousing is a viable option for them. However, there are disadvantages to using data warehousing, such as vendor lock-in and a limited amount of data that can be stored. There are two types of data warehouses that an organization can decide to use, which are physical data warehousing and cloud-based data warehousing. These two types of data warehousing have their advantages and disadvantages. Depending on the needs, size, or overall industry risk, some industries may benefit from physical data warehousing over cloud-based data warehousing, and others may require the reverse. In addition, for some organizations, the advantages of cloud-based data warehousing outweigh the disadvantages of physical data warehousing, and other organizations still require physical data warehousing due to the nature of the industry or prefer to own their data warehouse
software and infrastructure outright. Physical data warehousing will not become obsolete due to some organizations operating in industries where the cloud is a liability, dealing with confidential
data, or having trade secrets.
Advantages of data warehousing
The advantages of data warehousing include saving time, improving data quality, storing historical data, and data security. Data warehousing saves time by consolidating the data from the repository, which supports decision-making, provides data quickly, meets deadlines,
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Group 4 Research Paper & Slides
decisions can be made quickly and effectively, and results can be provided easily to relevant stakeholders (Fatima 2023; Fivetran, 2023). When an organization uses data warehousing, it can
improve the data quality by cleaning the data, which involves removing inaccurate and duplicated data, resulting in consistent and reliable data that can be used to create reports, make informed business decisions, reduce costs of data management, and gain business insights. In addition, data warehouses can be used to store historical data to track and forecast long-term trends, identify periodic trends, make predictions, regression analysis, make informed decisions based on current or future trends, and identify opportunities that can improve business growth. Another advantage of data warehousing is that it can increase data security by encrypting data, data is stored in one centralized location rather than on different platforms, users can have their access restricted based on permissions, and sensitive data can be restricted to only allow users from certain departments.
Disadvantages of data warehousing
The disadvantages of data warehousing are vendor lock-in, storage costs, and limited amount of data that can be stored. Vendor lock-in is a challenge since the organization may potentially lose access to its data if the organization doesn't keep paying the subscription, may not own the software outright (only if the software is subscription-based or being leased to the organization in accordance with the vendor's terms and conditions), long-term economic dependencies on the vendor, the data warehouse files may be proprietary (e.g., vendor A's file is a .dxn whereas vendor B file is a .xed file) and are not compatible with another vendor's data warehouse, lose features that were part of a lower tier and moved to a more expensive tier (e.g., Feature A was part of Silver but was moved to Diamond and Feature B was moved to Gold; thus the organization has pay $1000 a month for Platinum or $600 a month for Gold rather than $200
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a month for Silver that the features were a part of), data files become locked behind a paywall if the subscription lapses, and cancellation fees if the organization decides to drop the vendor before the trial period ends. Storage costs are a disadvantage of data warehousing since an organization has to be able to store all of the past and current data that can be in the terabytes or, have to buy more infrastructure to store new data when the current storage space for files fills up,
upgrade to a new subscription that allows unlimited storage space or to a higher tier that allows more data to be stored, and storing data can get expensive for organizations if renting storage from a vendor or relying on the organization's own infrastructure. Data warehouses can limit the
amount of data that an organization can store; thus, organizations have to limit what type of data is stored and collected based on the reporting requirements rather than what may be needed in the future due to storage costs, limitations of the infrastructure storage space, and software analysis limitations (Faction, 2021).
Advantages of physical data warehousing A data warehouse consolidates business data from internal applications, databases, and SaaS platforms and serves as a single repository to which an organization can reference to make informed decisions. A data warehouse is the best solution for business intelligence and analytical
reporting because transactional databases are unsuitable for analytical processing. Data warehouses offload analytical processing from transactional databases and enable faster processing through the use of columnar data stores, allowing users to quickly access only data elements related (Stitch, n.d.).
Advantages of physical data warehousing include centralized data, improved data quality,
enhanced data security, and better performance. Physical data warehouses store all data in one place, making it easier for users to access and analyze data. Since all data is stored in a single
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location, it's easier to maintain and improve data quality. Physical data warehouses often have robust security measures in place to protect sensitive data. Physical data warehouses are often optimized for performance, allowing for faster data retrieval and analysis. (Foot, 2022).
Disadvantages of physical data warehousing
Disadvantages of physical data warehousing are high costs, limited scalability, maintenance, data latency, and risk of data loss. Physical data warehouses can be expensive to set up and maintain. They require significant investment in hardware, software, and personnel. Physical data warehouses have a finite amount of storage space. As a business grows, it may need to invest in additional hardware to accommodate increasing amounts of data.
Physical data warehouses require regular maintenance to ensure they continue to operate efficiently. This can be time-consuming and costly. Since data must be extracted, transformed, and loaded (ETL) into the warehouse, there can be a delay (latency) in data availability. In case of any physical damage like fire, flood, or any other disaster, there is a risk of losing all the data stored in the warehouse (Foot, 2022). When should physical data warehousing be used
Organizations that deal with sensitive and/or confidential data or have trade secrets that are in a high-stakes industries where corporate espionage is prevalent, such as biotechnology, chemical, and IT, should rely on physical data warehousing rather than cloud data warehousing. This is due to data security concerns, organizations wanting to own the data warehouse outright, potential data ownership issues that can arise with cloud data warehouses, and not wanting to be forced to update the system due to incompatibility with legacy software (e.g., Windows XP or older versions of Linux), and certain updates to the system may break commonly used functions that can make the data warehouse system unusable (e.g., the update fixed function A but broke
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function C). Also, when physical data warehouse vendors are involved in a data breach, the only
sensitive information involved is the company credit card and products purchased since the physical data warehouse is not connected to the vendor's server and the data warehouses are off-
line. Large organizations would be using physical data warehousing since they have the resources to own the data warehouses outright, have the IT team and administrative team to support physical data warehouse systems, investing in more storage is not a capital expense or cash sinkhole, wanting to own the products outright, and issues with data warehouse can be easily fixed by the IT team who can troubleshoot and fix the issue. In addition, organizations may want to use on-premises due to off-line accessibility since they have frequent internet outages or poor internet connections, require full control of the system, and need physical access to the infrastructure.
Cloud data warehouse
This technology allows data to be stored and queried from the cloud. Cloud data storage software is essentially technology that allows you to store and query data in the cloud. This can be a great choice if you're looking to reduce your need for on-premises hardware or want to take advantage of the scalability and flexibility of the cloud. When evaluating your cloud data warehouse, you should consider the following aspects of your data: Volume – How much data do you need to store?
Diversity – How diverse is your data?
Location – Where is your data located?
Processing – How much data needs to be processed?
Query – How often should you query your data?
Cost – How much does it cost to use a cloud data warehouse?
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Advantages of cloud data warehousing Scalability and flexibility is one of the key benefits of a cloud data warehouse is the ability to scale resources on demand. This flexibility is important for businesses facing fluctuations in data volumes, and it enables seamless cloud data warehouse modernization as new technologies emerge (Data Sleek, 2023).
Advantage #1: low total cost of ownership Cloud-based data warehouses are preferred by organizations due to the low costs. On-
premises data warehouses can require expensive hardware, time-consuming upgrades, consistent maintenance, and outage management (Talend, n.d.). When business collect and store large amount of data, maintaining on-premises data warehouses can get expensive. Thus, increased costs can result due to being unable to unbundle on-premises data warehouses and infrastructure a business expansion can result in significantly increased costs (Data Sleek, 2023). On-premises data warehouses can require significant amounts of resources for major events that can occur that would require storing or analyzing large amounts of data. Cloud data warehouses, on the other hand, allow data warehouse teams to purchase as little or as much computing power and storage as needed (Talend, n.d.). Additionally, cloud data warehouses do not require additional infrastructure, hardware, and networks set up by the organization.
Advantage #2: improved speed and performance Cloud data warehouses are essential for keeping up with the growing different types and large amounts of data sources. Thus, organizations need to utilize ERP, CRM, social media, support, and marketing data while maintaining speed and performance (Talend, n.d.). On the
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other hand, on-premises data warehouses are unable to match the capabilities of cloud data warehouses.
Cloud data warehouses are very efficient; thus, can process and analyze multiple data streams at once. This can be achieved since cloud data warehouses use multiple servers that can increase the process speed and load times. As a result of using more than 1 server cloud data warehouses can be used by organizations located in different areas without being overloaded; thus, leading to improved productivity and efficiency. In addition, any additional data can be integrated and deployed as needed.
Advantage #3: seamless self-service capabilities for business users
Cloud data warehouses enable stakeholders to make evidence-based decisions quickly by improving the visibility of data, self-service analytics, and ease of running queries. Cloud data warehouse achieve this by pooling its resources which results in creating reports for users, performing ad-hoc queries, make data accessible to users, users can make informed decisions, and IT can focus on more urgent tasks that provide value to the organization.
Advantage #4: more secure data
On-premises data storage can be seen as more secure for some users. However, technological advancements have made cloud more secure and less expensive to maintain, which
can surpass on-premises security protocols that can be prone to human error (Talend, n.d.). Since cloud data is not store in different locations, IT can put controls in place to the protect data through encryption, multi-factor authentication, and make data transfers over the cloud between locations secure.
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Group 4 Research Paper & Slides
Disadvantages of cloud data warehousing The disadvantages of cloud data warehousing are lack of governance, lack of qualified resources, lack of planning support, and lack of automation support. These issues are challenges due to risks of storing and delivering sensitive data in the cloud, staff sometimes don’t know what type of data is stored in the cloud, what rules and policies need to be followed, and responsibilities staff have when handling and storing data in the cloud. In addition, with new technology it requires staff to have new skills such as design, cataloging, development, and maintenance of these new data warehouses which they may not have. Another challenge is vendor not providing support that assists organization in understanding how they can use the data
warehouse to the fullest extent possible and gaining its benefits (Sandwell, 2022). When should cloud-based data warehousing be used
Organizations in low and medium-stakes industries such as grocery stores, hardware stores, construction, and tourism would be better off using cloud-based data warehousing. Also, small and medium organizations should use cloud-based data warehousing. The reasons these industries and organizations should use cloud-based data warehousing are due to lacking the funds or staff to support on-premises data warehousing systems, require faster insights to make informed decisions, need the scalability or unlimited storage to store lots of data (e.g., historic and current data), the data warehouse is continuously updated by the vendor, low cost of ownership, and vendors handle maintenance of infrastructure. Other reasons organizations should use cloud-based data warehousing is due to disaster recovery, can handle multiple streams
of data at once, better security protocols, management can integrate different data sources, and can change subscriptions to meet changing demands and business needs (Talend, n.d.; Naseem, 2023).
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Do the advantages of cloud-based data warehousing outweigh the disadvantages of physical
data warehousing infrastructure?
The advantages of cloud-based data warehousing are being cheaper for organizations, can
be set up quickly, scalability, ease of accessibility, and high availability and disaster recovery. cloud-based data warehousing is often cheaper because you cannot buy and maintain physical servers. The scalability of cloud-based data makes it easier to make it bigger or smaller as organizational needs change. It is accessible anywhere, which is great for remote work. Cloud-
based data warehouses are typically highly available and offer robust disaster recovery capabilities due to its high availability and disaster recovery. The disadvantages of physical data warehousing are that it can be expensive, takes more time to set up, scaling is difficult, and cannot be accessed remotely easily. Physical data warehousing is expensive to buy and maintain the hardware and building. Scalability is a disadvantage since it involves buying and installing more hardware.
Therefore, whether cloud-based is better depends on your needs and budget. For many, the advantages of cloud-based data warehousing outweigh the disadvantages of physical infrastructure. One of the key considerations is the financial aspect. Cloud-based data warehousing typically requires less upfront investment because you're renting resources as needed, which can be more budget-friendly, especially for smaller businesses or startups with limited capital. Furthermore, cloud-based solutions are often lauded for their agility. They allow
companies to swiftly adapt to changing data storage requirements. Whether you need to expand your data capacity to accommodate growth or scale it down during quieter periods, the cloud can
seamlessly adjust, providing a level of flexibility that traditional physical infrastructure struggles to match. Accessibility is another significant factor. Cloud-based data warehousing offers the
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convenience of remote access. This is especially valuable in today's increasingly digital world, where teams might be spread across different locations, and working from home or on the go is the norm. It enables efficient collaboration and data utilization, no matter where your team members are situated.
Will physical data warehousing infrastructure become obsolete, or will it still be needed for some organizations (e.g., high-stakes industries where the cloud is a liability)?
Physical data warehousing won't become obsolete because some organizations have special requirements. Imagine banks or government agencies that handle very sensitive information. They may not trust the cloud due to security concerns, and they want full control over their data. In these high-stakes industries, physical data warehousing may still be needed. So, it depends on what you need and how important data security is to your organization. Physical data warehousing will still have a place, especially in industries where trust and control are crucial.
Conclusion
Data warehousing provides many advantages to organizations, such as saving time, improving data quality, storing historical data, and data security. In addition, data warehouses can be used to store historical data to track and forecast long-term trends, identify periodic trends, make predictions, regression analysis, make informed decisions based on current or future trends, and identify opportunities that can improve business growth. Drawbacks of data warehousing include vendor lock-in, storage costs, and the limited amount of data that can be stored. Vendor lock-in is the biggest challenge due to organizations running the risk of losing access to data if a payment lapse is caused by an expired company credit card, data warehouse files may not be compatible with another vendor due to being proprietary (e.g., vendor A's file is
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a .dxn whereas vendor B file is a .xed file), and lose features that were part of a lower tier and moved to a more expensive tier (e.g., Feature A was part of Silver but was moved to Diamond and Feature B was moved to Gold; thus the organization has pay $1000 a month for Platinum or $600 a month for Gold rather than $200 a month for Silver that the features were a part of). Organizations, regardless of their size, can choose between having a physical data warehouse or a cloud-based data warehouse, which have leveled competitive fields for smaller organizations who lack the funds, or a physical data warehouse would be a sunk cost or capital expense. Advantages of data warehousing include centralized data, improved data quality, enhanced data security, and better performance. The drawbacks of physical data warehousing are high costs, limited scalability, maintenance, data latency, and risk of data loss. Organizations
who would be relying on physical data warehouses are those that deal with sensitive and/or confidential data or trade secrets where corporate espionage is prevalent; thus the industry is considered high stakes. Industries that would rely on physical data warehousing are biotechnology, chemical, and IT due to data security concerns, working with legacy software, and updates run the risk of breaking commonly used functions. In addition, for some organizations, managers prefer physical data warehousing since they have frequent internet outages or poor internet connections, require full control of the system, and need physical access to the infrastructure.
Advantages of cloud data warehousing include scalability, flexibility, low cost of ownership, improved speed and performance, and better security. The drawbacks of using cloud data warehousing include lack of governance, lack of qualified resources, and lack of planning support. Organizations that would use cloud-based data warehousing are slow and medium-
stakes industries such as grocery stores and tourism, as well as small and medium organizations.
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These organizations and industries would use cloud-based data warehousing due to lacking the funds to support on-premises data warehousing, need the scalability or unlimited storage to store lots of data (e.g., historic and current data), the vendor continuously updates the data warehouse, which provides a competitive advantage, and low cost of ownership. The needs and budget of an organization can impact whether or not a cloud-based data warehouse is better than a physical data warehouse. For most organizations, low stakes and medium stakes, a cloud-based data warehouse would be better than a physical data warehouse due to being budget-friendly for startups and smaller businesses, ease of scalability caused by changing data storage requirements, and level of flexibility and accessibility. On the other hand, physical data warehousing won't become obsolete due to organizations having special requirements, handling sensitive information, security concerns, and need full control over their data.
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%20organizations%20of%20all%20sizes
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Kenton, W. (2022, July 12). Industrial espionage: definition, examples, types, legality
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Kodikal, P. (2021, August 16). 5 Limitations of data warehouses in today’s world of infinite data
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Naseem, O. (2023, August 19). What is a cloud data warehouse? 6 benefits of adopting a cloud data warehouse for your organization
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Panoply. (n.d.). Cloud data warehouse vs traditional data warehouse concepts
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cloud/
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Teradata. (n.d.). On-premises vs cloud: Pros and cons
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