A data warehouse is a type of data management system that is designed to enable and support business intelligence (BI) activities, especially analytics. It is a central repository of information that can be analyzed to make more informed decisions. Data warehouses are solely intended to perform queries and analysis and often contain large amounts of historical data. The data within a data warehouse is usually derived from a wide range of sources such as application log files and transaction applications.
Data warehousing involves collecting and managing data from varied sources to provide meaningful business insights. The main source of the data is cleansed, transformed, catalogued, and made available for use by managers and other business professionals for data mining, online analytical processing, market research, and decision support. The means to retrieve and analyze data, to extract, transform, and load data, and to manage the data dictionary are also considered essential components of a data warehousing system.
A data warehouse centralizes and consolidates large amounts of data from multiple sources. Its analytical capabilities allow organizations to derive valuable business insights from their data to improve decision-making. Over time, it builds a historical record that can be invaluable to data scientists and business analysts. Because of these capabilities, a data warehouse can be considered an organization’s “single source of truth” .
The cleaned-up data is then converted from a database format to a warehouse format. Once stored in the warehouse, the data goes through sorting, consolidating, and summarizing, so that it will be easier to use. Data warehousing makes data mining possible. Data mining is looking for patterns in the data that may lead to higher sales and profits.
In summary, a data warehouse is a central repository of integrated data that is designed to enable and support business intelligence activities, especially analytics. It is a system used for reporting and data analysis and is considered a core component of business intelligence.
