Companies that have a lot of data need a secure data storage system. There are many types of data storage systems. As a company owner, it is crucial to know these various types of data storage to take suitable actions and ensure the effectiveness and efficiency of business processes within a company. There are two types of most commonly used data storage, which are data warehouses and databases. What is the difference between a data warehouse and a database? Below is the explanation and example of their application in the company.

Difference between Data Warehouse and Database

The data warehouse is a system that combines data from various sources to create reports and analyses to generate appropriate and fast managerial decisions. The data warehouse stores data from multiple time periods to analyze later and take valuable insight to make better decisions. The data warehouse platform can transmit data, be accessed by all departments, and integrate multiple sources, databases, and analytical applications.  Historical business data is one of the data that can be handled by the data warehouse and produce complex reports for managerial decision making.

After understanding the meaning of a data warehouse, now let us find more information about databases. A database is software that works as a management system to store, organize, and process data. Databases handle simple data very quickly.

Both data warehouse and database are assigned as data storage systems. The difference between them is basically the way the two systems process data. Data warehouses utilize OnLine Analytical Processing (OLAP) to quickly analyze large amounts of data, while databases use OnLine Transactional Processing (OLTP) to delete, insert, replace, and update data in many transactions for a relatively short time. The database is one of the data warehouse components, so the data warehouse and database are actually complementary.


Example of Application of Data Warehouse and Database

  1. Data Warehouse Implementation

The data warehouse provides great quality reports and analyses to help businesses grow by providing various information needed for decision making. Examples of data warehouse results are segmenting buyers into several groups based on previous purchase history to find out purchasing patterns, making demand and sales predictions to determine business areas to focus on the next step, and predicting the customer’s reduction using the last 10 years’ data.

  1. Database Implementation

The database helps process day-to-day transactions within a company. Its application includes hospital patient registration, online ticket booking, and order creation in e-commerce.


Which is better for the company, Data Warehouse or Database?

As discussed before, a data warehouse requires a database to produce proper analysis. Suppose your company has a lot of data, either detailed or historical data. In that case, your company needs to consider using a data warehouse to store company data and help your company make decisions. If you plan to utilize a data warehouse for your company, a data warehouse solution from PhinCon can be one of the best options for you. Find more information about data warehouses here.


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