Uncover the difference between a database and data warehouse, especially when it comes to scaling your business with an ERP....
Data Warehouse versus Database: What is the difference?
If we single out the definition of data - “facts and statistics collected together for reference or analysis” - it’s rather hard to pinpoint any type of anomaly. Add that exact word to any other noun and you’ve got the basis for a string of definitions that all have completely different meanings.
Across a software like ERP, it’s the same idea. The system will have a database, but if you’re strategic enough, you could also implement an ERP data warehouse, which as you’ll find out, is much healthier for your business growth.
What is a Database?
Essentially, a database is - without getting too technical - a collection of structured data stored electronically in a computer system. For an ERP, this could be within the physical server or if it’s on the cloud, within a data center owned by the ERP vendor.
Each database is controlled by a database management system (DBMS). When referring to data, the DBMS, and any other applications used within the system as a whole, it is known as a database system. Most people will just call it a database.
Nowadays the most common way a database presents itself is through rows and columns in a series of tables, which makes managing data a more efficient process. It records real-time information about one particular part of your business. At its foundation, its main job is to process the daily transactions your company makes.
The true definition of a database has become blurry over the years as the systems evolved. From the first known database in the 1960s to present day, the development of the software has allowed data within a database to be flexible in such a way it’s become revolutionary.
Many people still consider a spreadsheet as a database (and they’re not wrong). Spreadsheets such as Excel or Google Sheets are designed to store data; however, like plastic they’re for single users. They have limitations in how much information can be manipulated. Whereas a database is precisely the opposite, it can handle a massive volume of queries and be wielded by multiple users.
One of the key features of how an ERP functions is through its common database. For example, NetSuite has a core database that allows its users to centralize information from all the organization’s departments.
Through this functionality, a business can avoid all manual data entry and the need to merge separate databases from different applications. NetSuite’s database automatically manages the core operational data, to present it in a clear, concise manner. Having a common database enables all decision-makers to have an inclusive view of the company.
What is a Data Warehouse?
Think of a data warehouse as the child and the database the father. A data warehouse is a specific branch of a database that connects and analyzes business data from multiple sources.
GURUS Product Manager, Neil Stolovitsky, provides us with a prime explanation:
“A Data Warehouse is a system that pulls together data from many different sources within an organization for reporting and analysis. The reports created from complex queries within a data warehouse are then used to make business decisions. A data warehouse stores historical data about your business so that you can analyze and extract insights from it. It does not store current information, nor is it updated in real-time.”
The most common data warehouses are:
||A virtual data warehouse: separate databases that are queried together to effectively access data within one place.|
||A data mart model: data is aggregated into a specific business area, such as sales or finance.|
||An enterprise data warehouse: this is the heart of a company’s information system, which consolidates data from all business departments.|
The big question that is often asked when it comes to deciding what direction to take is: why? Why have a data warehouse when it’s clear that a database is also an adaptable platform. A major reason is to create superior reports of your data in order to make even more accurate decisions based on past analytical data for business development.
For those who use an ERP system, such as NetSuite, the need is even greater. NetSuite is a software intended to run the day-to-day operations. Their database will deliver operational reports focused on your core business activities.
The issue becomes apparent when users need to visualize all relevant information. NetSuite’s data limitations then lead decision-makers to do their more strategic and complex reporting outside the ERP platform.
An application like a data warehouse will integrate to your NetSuite system and provide you with augmented views and tables to better analyze your pertinent data. The benefits of a cloud data warehouse are significant and once implemented there is no going back, you’ll see.
What are the benefits of a Data Warehouse?
How a data warehouse can benefit an organization lies within its scalability, flexibility, and accessibility, but those are just a few.
If someone gave me a spreadsheet that had over 400,000 rows filled to the brim with vital information for my reports, I might just collapse then and there.
A top advantage of a data warehouse is saving time. Within just a few minutes you can have full access to all the required information you need for your specific project or report.
There’s nothing quite like basing a target objective on misinformation. A data warehouse eliminates any potential replicated or inadequate data. By transforming data from an array of systems into a shared warehouse, you ensure reliable and quality data.
This guarantees that all your data will be synchronized with all sources. Consistent, standard data goes a long way when projecting operational outcomes.
Data security will (at least for the foreseeable future) always be at the forefront of any business requirement. No client wants their data to be thrown around like dirty laundry for the world to see. An adequate data warehouse enables consolidation and exceptional security.
Trust me when I say having a secure data warehouse is fundamental, especially when data warehouses store large volumes of historical data. You should bear in mind that this historical data will be crucial to your business growth. Without a data warehouse, there’s a higher chance of someone outside your organization attempting to have access.
If you ever want to forecast strategic decisions, without the historical data you will have no leg to stand on. Therefore, you must have secured data warehouses to keep hold of all this data for future growth.
A Data Warehouse and an ERP together again
Whether you’re a current ERP user or not, there’s nothing that should stop you from implementing a data warehouse. The problem when comparing an ERP vs a data warehouse, is that they’re incomparable. They’re separate entities that may appear incompatible, but once they’re synchronized, they’re majestical.
Picture it: the operating system of an ERP alongside the analytic abilities of a data warehouse. Some would say it’s a match made in heaven.
So, if you’re still asking yourself, “why do I need a data warehouse if an ERP already has a database?” then you should contact us and discover how the GURUS Data Warehouse has adapted to each unique company infrastructure to provide an excellent in-house solution.