How To Be Data Rich Blog

Top 4 reasons you need a data warehouse

Top 4 reasons you need a data warehouse

There are many benefits to owning and operating an independent data warehouse. In this post, we hope to share just a handful of some of the best reasons to leverage a data warehouse in your business.

Data ownership-

When it comes to data, there is no substitute for maintaining full ownership over your data. One of the top reasons that you should transition data towards a warehouse that you have ownership over is the fact that if not, you are at the mercy of the companies that are collecting and managing the data on your behalf.

One simple example of the dangers of relying on a platform to own and manage your data for you is Toys ’R Us and Amazon. Toys ’R Us turned to Amazon to help them revitalize their struggling business; partnering with them to help expose them to new audiences. Amazon then took the data that they gained from the partnership and used that to launch their own division in direct competition with Toys ’R Us, undercutting them and driving the final nail into their coffin.

Over the past several years, we have seen many moves to reduce the amount of data that businesses can get from Facebook, Amazon, Google, and many other sites. With each update to their APIs, they seem to cut more and more access away.

Companies that made moves to extract their data from these platforms before they reduced access now have the upper hand when it comes to data, as they are now less reliant on these companies, and more capable of standing on their own two feet.

The other issue that businesses face is that these platforms face mergers, acquisitions, or outright failure. When companies merge, they will likely update their data policies and sharing; in the case of failure, your data faces deprecation, deletion, or even loss.

All of these issues though can be avoided by establishing and maintaining your own data warehouse. If you own your data completely, then you never have to worry about someone else updating their privacy policy, or API; you have the data backed up in your own system.

Tailor to your needs-

Another thing that a data warehouse does for you is allows you greater flexibility with the data that you’re collecting. Because of the increasing crackdown on privacy and data sharing, we’re seeing tighter and tighter restrictions on what you can and cannot track as well as what the platforms can share with you.

If you bypass these platforms and go directly to your own data warehouse, you can track a lot more flexibly. For example, Google Analytics won’t let you pass personally identifiable information (PII); but if you send the PII directly to your own data warehouse, then you don’t have to worry about that restriction.

Another way that you can better customize your data warehouse to fit your needs is that you have full control over the security of your data. In a world where data breaches have become commonplace, the ability to maintain and manage the security of your data is paramount; and you don’t want to outsource that responsibility.

Increased privacy-

Due to the nature of the large tech platforms, they take the data that you provide to them and use it to train their machine learning algorithms. Those algorithms don’t just help your business though, they’re also used to help your competitors, or even worse, develop new products that compete with yours.

If you fully own your data, then you don’t have to worry about what other groups are using your data for, as you will only need to provide them with the data that you choose.

Insulation against legislation-

Most of the current data legislation is targeting “big data” companies like Facebook and Google, which collect and aggregate data on a disproportionate number of people. 

This leaves room for small companies to collect data on their customers and use it as they see fit. It’s unlikely that we’ll see major clampdowns targeting data warehouses, as that data is generally proprietary and the users will opt-in to the processing of that data.

This allows you to hedge against future legislation that may arise, as well as protecting you in the short-term from the privacy updates and changes made to the platforms.

Final thoughts-

The journey to data maturity is a long and winding one. There are constant updates and changes to the landscape; so you have to be prepared to pivot and change as well. The best way to maintain that flexibility and control is to take full ownership of your data.

The best way to take that ownership is to start collecting your data in your own data warehouse, extracting as much data as possible from all of your different tracking systems. From there, you can start supplementing that data with your own proprietary data that you collect on your own, or set up tracking systems that feed directly into the warehouse; but the first thing is to set up the warehouse and get the data in there.