In last month’s column, while highlighting the narrowing gap between business intelligence (BI) and customer relationship management (CRM), I discussed the fact that three of the CRM top 10 catchphrases (predictive analytics, customer valuation, personalization) happen to be BI capabilities. In the context of my discussion of the need for both operational CRM systems and data warehousing applications to bring these capabilities to fruition, I mentioned a white paper found on a popular CRM Web site that espouses the theory that world class analytics can be had without a data warehouse.

Naturally, this white paper caught my attention, and I took a closer look. The paper turned out to be authored by a vendor selling a type of access tool that incorporates a server-based middleware application with advertised robust query, reporting and dashboard capabilities. With these capabilities, a data warehouse that stores and optimizes (for reporting) a copy of the data from multiple operational sources is deemed no longer necessary. Nor does one have to invest in a costly data warehouse or central data mart, extract, transform and load (ETL) technology or expensive storage hardware. What’s more, adjustments to reporting information or the integration of new sources can be made without the complexity of costly data warehouse projects, giving almost immediate access to information. I realized that, although the conclusions drawn by the authors are at best misguided, the paper highlighted some common misconceptions about the data warehouse and about the requirements for sophisticated analytics - misconceptions that are likely to be present in many organizations new to data warehousing. Given that there are severe consequences to falling prey to these misconceptions, they merit refutation.

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