Strategies for Data Warehousing

More and more companies are integrating their data with those of supply-chain partners, acquired divisions or vendors to whom they’ve outsourced their IT function. This melding of data promises enticing advantages, such as real-time updating of customer information, the opportunity to focus on core capabilities and instant forecasting of inventory needs to suppliers. With such advantages, companies look forward to sending new products and services to market faster than ever, providing better customer service and slashing production and inventory costs.

But too many firms fail to realize these benefits. For some, the data warehouse created to combine data from multiple sources has a user interface that is hard to navigate or contains program code that is difficult to maintain. For others, data generated by the system turn out to be inaccurate or irrelevant to users’ needs or are delivered too late to prove useful. And for organizations that outsource their data warehousing, misunderstandings between IT customers and vendors about expected service levels can crop up once the system is implemented.

A study published in the December 2003 edition of the online journal Communications of the AIS examines possible explanations for these problems and proposes guidelines for boosting a firm’s chances of receiving the desired data warehouse performance. The study is “Data Warehousing Implementation and Outsourcing Challenges: An Action Research Project With Solectron” by Fay Cobb Payton, assistant professor of information technology, and Robert Handfield, professor of supply chain management, both at North Carolina State University’s College of Management.

To closely examine the challenges associated with the implementation of a data warehouse by a service provider, the researchers decided to conduct a longitudinal action-research study on a single company. Blending participant observation, unstructured interviews and analysis of archival information, they interacted with five managers at contract electronics manufacturer Solectron Corp. over a period of 18 months, building in multiple “check points” over that time horizon to validate their findings. Over its nearly three decades of operation, Solectron had grown rapidly through numerous acquisitions and had outsourced its IT function. On the basis of what they saw and heard at Solectron, the researchers drew several conclusions about how firms operating under similar conditions might obtain better performance from their data warehouses.