5 Benefits of a Hybrid Data Warehouse for Businesses

Today, companies depend on business intelligence to make reliable data-driven decisions on everything from marketing to hiring. Data warehouses form the core component of business intelligence and is where valuable information is stored and processed.

The market for data warehousing is expected to grow at over 12% by 2025. It’s also projected to be worth over $30 billion by that time. 

One key problem that businesses face is incorporating cloud technology with their current on-premise data platforms. They need to find a way to use cloud storage flexibility without discarding the control they have over their on-premise solutions. 

How can they do this? By adopting a hybrid approach. 

As the name indicates, a hybrid data warehouse is where businesses can combine the power of cloud storage with their current on-premise data platforms. A hybrid platform means that they can keep up with the latest technologies and create efficiencies without losing the investment made in their current setups. 

Businesses often use data warehouses to manage their structured data. This data often comes from CRM (customer relationship management) activities and the other components of Enterprise Resource Planning (ERP) such as accounting, supply chain information, HR and more.

Around 45% of businesses use CRM tools for their lead generation. They also rely on analytics and other data sources to manage their marketing, sales, and SEO efforts. These data alongside other transactional information need to be easily retrieved so that business users can get periodical reports, carry out modeling, forecasting, and planning. Data is also needed to build dashboards to visually present trends and trajectories from current information on sales, churn rates, and other KPIs.

How can a hybrid data warehouse help with these requirements? Let's dive into the benefits this type of platform offers to understand more. 

Benefits of Using a Hybrid Data Warehouse

Before we take a closer look at the hybrid warehouse setup, here are some of the ways that a hybrid data warehouse supports a company. 

1. Data Consolidation: For businesses that have multiple entities and different data platforms, a data warehouse will allow them to consolidate data in a centralized and accessible manner.

2. Business User-Friendly: The leaders, decision-makers, and other business users of a company need to find data and generate reports from across different groups, teams, and locations. A hybrid data warehouse is business user-friendly and vital to supporting successful marketing and other strategies. 

3. Centralized Governance: A hybrid platform gives you centralized governance in spite of the fact that there are Spaces or isolated environments. Your business users can explore data from disparate and separate sources easily. They can also upload local files and then model the data without affecting the integrity of the underlying sources. 

4. Third-Party Compliant: With the hybrid option you can add third-party tools that you're already using. It will not be necessary to invest in new tools, processes, and workflows. You'll also maintain central governance across different platforms and regions. 

5. Removal of Silos: A major way that a hybrid data warehouse helps is the removal of silos in an organization. The presence of data silos often means duplication and rework which leads to waste of resources and higher expenses. Data warehouses finally allow you to create integrated data and provide a single source for access. 

Building a Hybrid Data Warehouse

The hybrid approach to data warehouses blends the typical top-down and bottom-up approaches. What this does is that it retains the speed and user-orientation of the bottom-up approach. But it ensures that you're not sacrificing the data integration that comes from the top-down approach. 

The recommendation is to spend around two weeks to develop an enterprise model in the third normal form and then create the first data mart. What follows is that the first set of data marts are also designed in third normal form. But they are deployed using star schema models. A hybrid/dual modeling approach builds the enterprise model but retains the usability and query performance that comes from a star schema. 

This hybrid methodology will use an ETL tool to store and manage the enterprise and local models within the data marts. It also works to synchronize the differences between them.

A case study by SAP shows how the use of hybrid data warehouses helped their client PwC with dealing with scattered data across 150 countries. PwC is a professional services firm that realized that they were unable to benefit from the data created by their offices around the world.

The problem was that regional offices created their own data strategies and also built their own solution mix with different vendors and solutions. Collecting and cleaning data from different platforms, locations, and with different data practices would have been a nightmare.

However, a hybrid solution by SAP not only made this possible but also removed the problems of replication and duplication. It removed data silos, made the data easy to access and use, and also ran a proof of concept in just 48 hours. 

An existing BW/4HANA user can simply add on a Data Warehouse Cloud solution with it’s self-service modeling. This frees up the IT functions and allows the business to optimize all its resources. 

Conclusion 

Businesses depend on intelligence to support future marketing strategies and to carry out vital business decisions. This is challenging when data sources are scattered or if a business is hesitating to add or switch to cloud technology when they already have a heavy investment in their on-premise solutions.

A hybrid data warehouse can act as a long-term and effective solution to these problems. Consider using a hybrid approach to manage your data and help you grow your business.