At many companies, data warehousing is only now finding renewed corporate interest because earlier initiatives were poorly planned and over budget.

Kevin Strange, vice president and research director for Gartner Research, told participants in the Gartner Symposium/ITxpo 2002 in San Diego that the inability of planners to coordinate business intelligence and customer relationship management initiatives continue to result in high-cost data management failures.

Strange said nearly two-thirds of enterprises implementing data warehouses over the next four years will not have an effective model, which will hamper vendor negotiations and increase costs.

Phased implementation of data warehouses will allow delayed purchases of some portions of the projects, which can be expected to reduce costs, since hardware prices are falling at a rate of 30 percent per year and disk storage costs are declining 35 percent to 45 percent per year, Strange said.

Over the next four years, the analyst said three-quarters of all enterprises will focus their data warehouse spending on less robust and usually single business area data marts resulting in 50 percent overspending. About 70 percent of the cost of a data mart is allocated for data architecture and about half of that is redundant for each data mart, making data warehousing more cost-effective and flexible, Strange said.

Gartner estimates that during the next 48 months more than half of all implementation efforts will overspend by an estimated total of $40 billion because of a lack of coordination between and within BI efforts. "While CRM has the attention of executive management, the effectiveness of such a strategy can only be as good as its underlying data and topology," Strange said.

The analyst said examples of overspending include cases where failure to consolidate multiple projects might result in an enterprise using as much as 15 terabytes of data storage when only three terabytes might be needed, as well as cases where an enterprise fails to fully understand the total cost of ownership (CTO) and to estimate return on investment based on people costs, process costs and technology costs.

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