The majority of organizations that have implemented or are planning to implement business performance management solutions rely on a data warehouse to support the data integration requirements of their performance management initiatives. This finding comes from a Cutter Consortium survey conducted in January 2008 of 101 end-user organizations based worldwide. The survey was designed to measure the extent that organizations are implementing business performance management and the techniques and tools they are using and the issues they are encountering.
Specifically, when asked, “Does your organization have an existing data warehouse that you are using/plan to use to support the data integration requirements of your business performance management initiative?” survey participants responded as follows:
- “We are using/plan to use our existing data warehouse” (44%)
- “We do not have an existing data warehouse/data integration architecture but plan to develop one ourselves to support our business performance management efforts” (19%)
- “We do not have an existing data warehouse/data integration architecture but plan to buy a packaged business performance management application that includes a data integration architecture” (10%)
- “We do not have an existing data warehouse/data integration architecture and do not foresee having to develop one to support our business performance management efforts” (15%)
- “Don’t know” (12%)
That the overwhelming majority of organizations (i.e., 73%) are using or plan to use some form of data warehouse to support their performance management applications makes sense when you consider that data integration and ensuring data integrity were found to be the third most-difficult issues confronting organizations implementing business performance management initiatives, according to the survey.
This finding is important for several reasons. For one, data integration requirements for business performance management can be daunting because of the number of sources that need to be accessed/integrated in order to feed the performance analytics and KPIs. In addition, over the last several years, some have pushed the idea that the data warehouse is no longer essential for performance management and other BI-related applications. The argument is that the availability of virtual data integration brokers using real-time data capture technologies means it is no longer necessary for organizations to undertake complex (and risky) data warehouse projects.
I have long argued that the data warehouse is still essential for comprehensive BI applications (those spanning multiple departments, business units, and users, etc.). This is because, although virtual data broker technology excels when it comes to capturing and integrating real-time data, questions exist as to how well the technology supports complex data cleansing — especially when the data is drawn from multiple, heterogeneous, distributed sources. Moreover, although virtual data brokers are excellent for displaying real-time information in dashboards, scorecards, and other “œat-a-glance” style applications, they may not be able to present a historical view. Such a view is essential for adding business context to recent developments (e.g., contrasting regional sales or shipments for the current week’s marketing campaign with those from last week, last quarter, last year, and so on). It is for these reasons, among others, that I have always urged organizations to consider data warehousing and virtual data broker/real-time integration tools as compatible rather than mutually exclusive technologies.
In conclusion, the survey’s finding that the overwhelming majority of organizations implementing business performance management applications are relying on a data warehouse to support their efforts tends to throw cold water on the “no need to utilize a data warehouse” argument — at least as far as business performance management is concerned. As a result, I urge organizations that are considering foregoing the use of a data warehouse to carefully reexamine their requirements — especially when it comes to the need to ensure data integrity for performance management applications.
But this is just my opinion. I’d like to hear your view on this matter as well. Does business performance management, done correctly, require a data warehouse?