Destined To Repeat The Boom Bust Cycle For Data Warehouse Funding

Thursday February 28th, 2013

I just came back from a Data Warehouse project meeting and all is well and the funding for new data conversion and load has been committed.  It’s all go again . . . .

I cannot help but feel though that we are headed for another cycle of boom – bust as far as Data Warehouse project funding commitment, correction, adjustment and eventual cuts.  Whether you are a client or a vendor, we have all been in this place before.  We are all destined to repeat the BOOM-BUST cycle.

All companies go through this cycle and it is only a question of degree of oscillations.  From where I stand, I see this oscillation determined by the extent of recognition of the business value that the Data Warehouse creates.  Business value in this case is the direct contribution to increasing revenue, reducing cost and mitigating risk.   It seems simple enough that the way to minimise wild oscillations is increasing the visibility of this value.

But life is never simple.  There is no clear line of sight of the business value created.  Often, where the value is created it is not where the cost is being managed.   This becomes so apparent when the annual budget process commences and the question “What value do we get from this $xxx we spent on Teradata?” 

Some of our clients have started to break this cycle or at least minimise the questioning of the value of their Data Warehouse investment.  They have invested time and effort to identify the business users of the Data Warehouse and quantify the revenue, cost and risk impact of the Data Warehouse services.   Often the questions are very straight forward – “What would happen if you didn’t have the Data Warehouse facility to support your business process?”   One of our latest exercises actually identified critical applications that no one knew existed.   This is not surprising as most Data Warehouses log these applications as “data extracts” and no documentation of their use.

 It is surprising how little effort is required to create this inventory of Data Warehouse applications. It’s committing to doing it that is the challenge.  And this is because of the line of sight issue. 

People who are generating the business value through analytics are often not the people to have to justify the ongoing funding.   One can argue that this is a governance issue.  This is a “boiling the ocean” answer.  For myself I like simple. 

If you are in the firing line for justifying the ongoing expenditure on the Data Warehouse, whether you are in IT or funding it through your business projects, it would be wise to invest some effort in quantifying the business value.  Teradata can help in getting this started or in establishing a baseline process for doing so. 

Renato Manongdo is a Teradata ANZ  industry consultant with extensive experience servicing clients in the financial services, insurance and health care industries.

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Renato Manongdo

Industry Consultant at Teradata
Renato Manongdo is a Senior Financial Services Industry Consultant at Teradata ANZ. Renato provides senior management advice on how clients can better capitalise on their information and data investments. Particular focus on Business Intelligence and Analytics as it applies to business processes covering customer, channel and product management functions across Financial Services including Big Data.

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