While there are many positives to adopting a data warehousing system, there are also drawbacks. Even with these drawbacks, the negative aspect of data warehousing allows management to determine whether or not this system is right for their company. In the end, it allows for responsible decision-making.
The drawbacks can be quite daunting to a firm that has little patience for results. The costs of a data warehousing system are large. These costs include limited value of the data, irrelevant data collected, data collection and retrieval costs, and costs of human capital. These costs are all drawbacks to the system. While they may not directly manifest themselves in monetary terms, they will eventually impact a firm�s bottom line if the company cannot effectively use a data warehousing system. These costs are the drawbacks of implementing a data warehouse system.
Data that is collected in a data warehouse is typically produced from the internal processes of the company using historical data. This information has limited value because the purpose of this information does not contribute to forward-looking decision-making. The information generated has such a limited scope that it may be overkill for a firm to invest in this system especially if the business process is relatively simple.
Creating excess data for the data warehouse is another drawback to adopting this system. This typically occurs when the data warehouse system has been established. Firms find that they can add unlimited data to a data warehouse. The problem arises due to the fact that data is added that doesn�t have a clear relationship to its core business strategy. By adding unrelated data to the data warehouse, the costs of retrieving data and transforming it into a useable form are increased.
Another data warehouse drawback is that the costs to collect and deliver data in a timely fashion may be too expensive for a firm. This is especially true when passing this information to an end user that needs to use the information. Cleaning the data is a vital part of this process. A data warehousing developer may not possess the necessary skills to effectively clean the data for the user. Compromises have to be made at times but this eventually leads to a compromising of the value of the data in the data warehouse.
Human capital is an expensive part of any database system. This is especially true with a data warehousing system. Many consultants and employees, who will use or maintain the system, don�t have ample experience with the data warehousing life cycle and the associated processes. There aren�t many people that have extensive experience with data warehousing because it is a relatively new data storage system. Those that do have experience, command a higher employment cost than others. These increased data warehousing human capital costs increase a firm�s IT costs more so than those with regular database management and administration.
In conclusion, the costs associated with the data warehousing system are the major drawbacks to implementing this style of database. These drawbacks include limited value of the data, irrelevant data collected, data collection and retrieval costs, and costs of human capital. All of these drawbacks may not have a monetary value, but they certainly impact the bottom line of a firm in the long run.
