Why DWH (Data Warehouse) Drives Corporate Growth: How to Effectively Utilize Your Own Data

Amid growing attention on data utilization in business, the DWH (Data Warehouse) market is projected for rapid growth. We explain what DWH enables, its characteristics, and the benefits it brings to corporate growth. Furthermore, as many companies advance their use of customer data, we examine how to organize and utilize your company's data, along with practical use cases.

What is DWH, essential for corporate growth?

DWH (Data Warehouse) literally translates to "data warehouse or storage facility."It refers to a database that aggregates and stores the vast amounts of data accumulated daily in business operations in a chronological manner. The data sources collected by a DWH include, for example, "core systems" such as production management and sales management systems; "strategic systems" like Marketing Automation (MA), Sales Force Automation (SFA), and Customer Relationship Management (CRM) tools; and website access logs.

The difference from a data lake is that it is designed for "analysis."

Data lakes are also well-known for storing big data. However, the key difference is that a DWH is not merely a storage place; its purpose is analysis. Therefore, while a data lake typically stores collected data in its original format, a DWH organizes data to enable efficient analysis. Furthermore, data extracted from a DWH or similar storage, customized into a more usable form for specific purposes or applications, is called a "data mart."

The Globally Expanding DWH Market

According to growth projections for the DWH market released in August 2021 by the American research firm Report Ocean, the global DWH market size is expected to grow at an average annual rate of 10.7%, reaching $51.18 billion by 2028, up from $21.18 billion in 2019.Market growth is being driven by the rapid increase in data handled across various fields in recent years and the rising demand for more advanced analytics.

As of 2019, large enterprises dominated the DWH market. This is likely because larger companies possess greater volumes of data, leading to a surge in their adoption of DWH systems for management and analysis.Regionally, North America holds the largest share. This is largely due to the early adoption of advanced technologies among end-users in the region. However, the increasing adoption of digital technologies in the Asia-Pacific region is expected to intensify DWH utilization in these areas going forward.

DWHs are implemented across various industries and organizations, including manufacturing, telecommunications services, distribution/retail, and transportation. One sector where demand is particularly high is finance. Financial institutions like banks and securities firms often handle highly specialized data and require rapid data verification and analysis in response to economic trends, making DWH-based data management highly effective.

DWH supports swift and appropriate decision-making

While demand for DWH is expected to grow significantly, what specific benefits does it offer companies, and how does it contribute to business growth?

Benefit 1: Efficient data processing enables swift decision-making

A DWH consolidates data in one location, organizing and storing it in an easily analyzable format. This eliminates the hassle of retrieving necessary data from individual systems or departments, enabling efficient data collection. Furthermore, it allows for high-speed processing of large volumes of data and smooth data searches. This facilitates swift, data-driven decision-making and strategic planning.

Benefit 2: Storing historical data enables more accurate analysis

Another significant advantage of a DWH is its ability to store data chronologically, including historical records. Even when data is modified, past versions are preserved without being deleted or overwritten. This allows verification of both old and new customer information when details change. It prevents data loss due to recording errors and can be beneficial for customer behavior analysis by capturing the fact that a change occurred.

Benefit 3: Analyze long-term customer trends using chronologically organized data

Another benefit is the ease of analyzing long-term customer trends, as data is stored chronologically and can be viewed organized by day, week, month, etc. Understanding how customer behavior changes over time allows you to connect these patterns to future purchase predictions. This facilitates more efficient marketing strategies and sales activities.

Centralized Information and Long-Term Analysis via DWH: The Key to Corporate Growth

So, how is DWH actually utilized in business scenarios? For example, e-commerce sites accumulate vast amounts of data daily, including customer purchase histories, browsing histories, favorite item counts, and vendor activity. Managing and analyzing this data via DWH enables tailored product recommendations aligned with customer needs and the delivery of effective advertising.

Additionally, DWH is utilized by airlines to improve seat occupancy rates. By accumulating historical data on customer reservations and ticket issuance, cancellation patterns can be analyzed. Controlling factors like reservation acceptance numbers and discount timing based on this data reduces empty seats. This approach is also applicable to movie theaters and theme parks, where seat occupancy significantly impacts revenue.

Thus, DWH proves effective when handling vast customer datasets or requiring long-term data analysis, and its adoption is growing among Japanese companies.Furthermore, recent trends show a growing need not only to utilize internally held data within the company but also to share it with business partners or leverage open data provided by third parties. Services addressing these needs are emerging, suggesting that corporate data utilization will expand more broadly and diversely as companies leverage various services.

Data analysis is now indispensable for companies aiming for sustainable growth. A DWH centralizes the vast amounts of business data accumulated daily and stores it in an easily analyzable format, enabling the effective utilization of diverse data across operations. If you are looking to efficiently analyze your company's data or are facing challenges managing and utilizing massive amounts of data, why not consider a DWH as one option?