Building the Data Warehouse

Chapter 15. Cost-Justification and Return on Investment for a Data Warehouse

The question "Am I getting my money's worth?" inevitably arises during the building of a data warehouse. The infrastructure surrounding a data warehouse is not inexpensive. The first time a data warehouse is built in an organization, no one knows for sure what to expect. Because of these reasons, it is absolutely normal for an organization to question whether they should be doing a data warehouse.

Copying the Competition

A quick and simple way to justify a data warehouse is to point out how many other data warehouses have been built in the industry. In many ways, building a data warehouse is merely a reaction to remaining competitive in the marketplace. The argument, "Well, company ABC, our competitor, has a data warehouse so we need one, too," is a surprisingly powerful argument. And it is true that built and used properly, a data warehouse leads to greater market share, increased revenue, and increased profitability.

But sometimes management wants more in the way of a cost justification. Management wants to see in black and white exactly why it is building a data warehouse.

The Macro Level of Cost-Justification

One way to approach the justification of building a data warehouse is at the macro level. Another way to approach the justification of building a data warehouse is at the micro level. Figure 15-1 shows these two perspectives.

The macro level refers to a discussion at a high level. Typical of such discussions ...