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Short-term thinkers and the data warehouse

Although building data warehouses can be expensive, avoiding them will ultimately cost your organization more time and money.

This article originally appeared on the BeyeNETWORK.

The cost of the data warehouse has always been viewed as a drawback. These data warehousing costs, which are sometimes significant, typically include hardware, storage and software. There are also ongoing operational costs to consider. Whenever you incorporate data warehousing into you business, there will naturally be additional costs. Often, companies have used this as an excuse for not investing in a data warehouse.

Organizations should watch how much money they are spending and think long-term. This is particularly true in the case of data warehousing. Here, the short-term thinkers (oftentimes referred to as the bean counters) should not try to save a small amount of money in the short-term simply to avoid huge long-term expenses.

Consider the following scenario:

Because of all the money an accountant has saved in the past, he is promoted to city planner. A major new developer comes to the first city planning meeting. This new developer, who is describing his plans for a new project on the west side of town, suggests building a four lane road with many exits. The city planner, however, rejects the idea since it is too expensive. He is more concerned with optimizing the city plans so that they fit within the immediate budget.

Despite this, the city planner understands that some type of a road is necessary. Since the city planner has already committed money to a builder, he diverts some of the funds toward building a two-lane paved road to the new development. The only provision is that the road must be built in the next few months. Thus, short-term plans proceed for the building of a new two-lane paved road, that must be built very quickly and cheaply.

After this occurs, the city planner proudly announces the new road and the savings that resulted from using the existing city contracts. This is a short-term solution that meets budgetary requirements.

Everything is going well until the developer starts to build the sewer line. Unfortunately, the sewer line crosses the newly-built road. As a result, the construction crew begins to tear up part of the road. Traffic is diverted onto a dusty dirt road detour. The concrete and pavement are subsequently torn up. From here, the sewer is installed and the road is left with unsightly scars.

Although it has not cost the city much money to tear up and repair the road, traffic has been diverted and drivers are inconvenienced. Clearly, the short-term expenses for allowing the sewer to cross the road are not significant.

After much time has passed, an electrical line is needed to service the new development. The electrical line must be buried because it crosses the new road. Again, the road is torn up, a trench is dug and traffic is diverted. Once the trench is dug, the electrical line is placed in it and the road is repaired. Not only does the road have more scars, but the sewer and electrical lines are now visible. Traffic soon returns to its pattern after the disruption.

Everything is going fine until the city realizes the new development must have cable lines for television. The developer declares that the development is upscale, and therefore, it must have cable lines. Disappointingly, the cable lines cross the road. Because of this, traffic is again diverted to a detour. Now the drivers are angry, since the brand new street must constantly be repaired. A trench is dug, the cable lines are installed and the street is repaired. While these repairs are not costly and fit within the short term budget, the total bill for the road is considerably greater than the initial cost. In addition, people are upset because the road is not drivable.

The developer was correct about the new development and people begin moving into the area. As apartments, houses and small businesses are built, the road receives excessive traffic. The city planners’ suggest installing traffic lights. They feel this will work within the short-term budget. Consequently, the city installs traffic lights and again tears up the roads, which disrupts traffic once again. There are more short-term expenses. But the traffic lights are placed into service and the objectives of the short term budget are met. Alas, the traffic lights are no solution to the road’s mounting volume of traffic. The traffic lights only make the flow of traffic worse. Although this is definitely an inconvenience, the short-term budget is unaffected. The city planner is praised by the mayor and city council.

Unfortunately, there are enough people inconvenienced by the new road (which is no longer new) that the mayor and city council are not reelected. The new city council’s first priority is to build a four-lane highway with many exits. This was the developer’s original proposal.

Admittedly, the developer’s plan for a four-lane highway would have cost a lot of money. After looking at the city’s current expenses, however, the city would have saved a great deal of money.

This example shows what can happen when companies base short-term decisions on preserving a short-term budget. When it comes to basic infrastructure, a short-term budget mentality leads to massive waste and long-term expense.

The data warehouse is an infrastructure, or a very fundamental part of a larger infrastructure. There are many benefits to a data warehouse. When a corporation looks to the expenses of an infrastructure, the money should be seen as a long-term investment. Applying a short-term budget conscious mentality to a long-term infrastructure leads to various long-term expenses. These costs are significantly greater and more wasteful than originally building a proper infrastructure. Short-term thinking leads to expensive cost-overruns and unhappy users in the long-run.


Bill Inmon is universally recognized as the father of the data warehouse. He has more than 36 years of database technology management experience and data warehouse design expertise. He has published more than 40 books and 1,000 articles on data warehousing and data management, and his books have been translated into nine languages. He is known globally for his data warehouse development seminars and has been a keynote speaker for many major computing associations. Bill can be reached at 303-681-6772.

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