By looking past their corporate boundaries, some of today's most aggressive IT managers are bringing the benefits of big time data warehousing to their mid- sized companies.
The data warehouse is without a doubt today's most advanced repository of enterprise-critical information. Modern data warehouses are built to accept data from financial, manufacturing, point of sale and other core business applications and then to restructure that data to support highly efficient query and reporting access. Managers now use increasingly specialized software tools to analyze warehoused data by time, location, activity, industrial code or other business dimensions.
For years the powerful benefits of data warehousing have been largely unavailable to middle-tier companies, a niche defined as those with revenues of less than $1 billion a year. The high cost of hardware, software and people (both to design and build the warehouse and to run it on a day-to-day basis) made this advanced information technology prohibitively expensive for most small- to mid-sized companies.
But now thanks to the emergence of the virtual private network (VPN) and a new generation of Web-enabled database tools middle- tier companies can reap the powerful benefits of the corporate data warehouse. These new technologies make it possible for middle-tier companies to outsource their data warehouses to highly specialized, Web-driven service providers.
By routing enterprise data and reporting through a VPN, this outsourcing approach leverages the convenience and economies of the World Wide Web. It makes optimum use of the distributed computing environment including advanced authorization, authentication and encryption technologies. It allows managers to utilize exception based and/or trend analysis reporting to determine exactly what information they want and in what form that data should be presented. This data could be highly summarized to support strategic decision making (EIS) or very detailed to support tactical decisions at the knowledge-worker level.
A Web-enabled VPN can also incorporate next generation broadcast technologies used to deliver event-triggered messages directly to corporate decision-makers. The Web connectivity itself dramatically reduces the cost of a WAN, allowing a qualified user with high-speed Internet access and a Web browser to access and query the data warehouse from any point on the globe.
But perhaps most importantly, this Web-driven outsourcing strategy opens the world of data warehousing and business intelligence to the middle- tier companies of the world for the first time. And those capabilities are available to companies worldwide right now.
Consider an example where specialists designed and implemented a VPN-based data warehouse for a major nationwide grocery broker. The company's data is housed at the outsourcing service provider's office, and sales and marketing data is sent via the Internet from various brokerage offices around the country. The data is then combined with purchased point-of-sale analytical data and loaded instantly into the company's highly secure, fault-tolerant data warehouse. Managers at the company then use browser-based ad hoc query reporting and decision support tools to do slice-and-dice analysis and reporting over the Internet.
It's real and it's working, and just about any middle-tier company can benefit from this newly created data warehouse outsourcing space.
While it would take an internal team six months or more to plan, implement and launch a sophisticated data warehouse, a focused and specialized team can deliver results in as little as 90 days. And while a typical home-grown system might cost anywhere from $750,000 to $3 million to launch and operate, by outsourcing this IT service, mid-market companies can gain all the benefits of data warehousing for costs that might average just $250,000 for development and $180,000 in annual fees.
Middle-tier companies also benefit from the extensive e-business, VPN and data warehousing experience available only from a dedicated outsourcing group. By calling on a reliable outsourcing provider, companies gain the economies of shared development and infrastructure costs while avoiding a large investment in IT hardware and software.
The outsourcing of data warehousing services is a classic win/win business strategy and is particularly attractive to middle-tier companies that could not otherwise afford the cost of this advanced technology. By looking beyond their corporate borders, IT managers can give their mid-sized firms the benefits of a "big time" computing environment.
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