Data Warehouses, New Privacy Laws, and Business

From social media companies to multinational retail corporations, businesses of all varieties currently collect the personal data of consumers in a fashion that has never been witnessed before at any point in time. In turn, businesses use this information to deliver targeted advertisements to their respective customers, gain insights into the specific products and services that such customers may be interested in purchasing in the future, and maintain compliance with privacy legislation such as the EU’s General Data Protection Regulation (GDPR), among other things.

For these reasons, in addition to many others, many businesses and organizations have been using data warehouses to store, manage, and protect their personal data from unauthorized access. This being said, a data warehouse is defined as a “repository for data generated and collected by an enterprise’s various operational systems.” Moreover, many businesses will use data warehouses as a component of their large-scale data management systems, as these warehouses enable such businesses to organize and analyze data in a much more efficient and effective manner. With all this being said, while the particulars of a given data warehouse may vary, all such warehouses have a few basic characteristics.

How do data warehouses work?

To illustrate the fashion in which many businesses use data warehouses to store their personal information, consider a K-12 school within a given U.S. state. Each year, this school will enroll a new class of students, while simultaneously graduating a class of students. Likewise, this school will also collect a host of personal information concerning such students. For example, the data warehouse for this school might include the grade that a student is currently enrolled in, their grade point average, their contact information, and any extracurricular activities they may be involved in during their spare time, in addition to other relevant details.

To this end, while all of this information could theoretically be stored within a database, word document, or spreadsheet, it would be very difficult to analyze and interpret said information due to the sheer number of children that attend the school. Alternatively, placing this information within a data warehouse would allow the school to track the progress of their students, determine which students need additional support, allocate resources accordingly, etc, as data warehouses can be configured and managed in a variety of different ways depending on the objective at hand.

The components of a data warehouse

Generally speaking, all data warehouses will be comprised of a data integration layer that will be used to extract information from a wide range of operational systems. For example, a retail business could import business data taken from its customer relationship management (CRM) system in order to better understand and analyze this data. On top of this, data warehouses will also typically contain a staging area where all the information within the warehouse can be cleaned and organized for later use. Furthermore, a data warehouse will often contain some form of presentation area where the information contained within the warehouse can be made available for use.

The benefits of using a data warehouse

Given the inherent value that personal information currently holds within the business landscape on a global scale, utilizing a data warehouse can provide numerous benefits to a particular business or organization. Most notably, as has already been stated, data warehousing offers businesses the opportunity to analyze their data in a more productive and meaningful way when compared to other methods of data collection and analysis. Conversely, data warehousing also enables businesses to control their data in a more flexible fashion, as a business can maintain such warehouses on-premise or via a cloud computing platform. What’s more, data warehouses also give businesses the ability to maintain compliance with privacy legislation, among other relevant laws like the Freedom of Information Act (FOIA), as a business will be able to access the exact data they need to comply with a government regulator when called upon to do so.

From educational institutions to hospitals to fortune 500 companies, businesses of all sizes and scales will invariably be collecting some level of information during the course of their operations. What’s more, the rise of data breaches over the course of the past decade has also impacted the manner in which businesses store their personal data, as these businesses will ultimately be held responsible for any unauthorized access to customer data that may occur during a security breach incident. With all this in mind, while data warehouses are already extremely common within many sectors of industry around the world, they will likely continue to become more popular in the upcoming years.