ETL and data warehouses are dead! Long live ETL and data warehouses!

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A few years ago, I read an article that resonates with me to this day. (Of course, I can't find it today, but here's the gist of it.)

A new CIO (Walter) took the reins at a large multinational organization in February. (Call it Gray Matter Technologies or GMT.) He spent a few months getting the lay of the land. He met with GMT's VPs, department heads, and of course his fellow C-suite colleagues. In the process, Walter discovered that things were a mess. GMT ran on a patchwork of systems, technologies, reporting and ETL tools, and databases.

Ho hum, right?

Don't worry. Things were about to get interesting.

By May, Walter had no way of determining which technologies and applications GMT employees actually used and relied upon, and which ones they did not. To answer this question, he did something draconian. Walter emailed GMT's top brass. He notified them that IT was shutting off everything tech-related effective January 1 of the new year unless someone objected and provided a valid reason for not doing so. 

A few responses immediately trickled in. The payroll manager didn't have to plead much. As is often the case, however, many GMT execs disregarded Walter's email. At the first of the year, as Walter promised, IT disabled/retired all systems, homegrown applications and reporting tools not on the protected list.

Not much happened — until it did.

At the end of the following March, more than a dozen frantic executives called the IT department. For some strange reason, many of their quarterly reports no longer worked. They wanted to know why.

Parallels with modernization

I thought about that little yarn in the context of modernization and data integration (DI). Are new DI tools objectively "better" than traditional ETL tools and data warehouses? The former may sport new bells and whistles, but I cannot answer that question. But even if they were superior, I wonder whether most large, mature organizations could produce an accurate inventory of all DI tools and processes currently used. I suspect that another "Walter situation" would ensue.

Even if you concede that point, though, remember that traditional ETL tools and data warehouses may not be so antiquated after all. Sure, they weren't designed to effectively handle frequently and constantly updated data sets (e.g., streaming data), but does that feature always matter? The answer depends. Consider the following scenarios:

  • Does the VP of supply chain probably need real-time inventory updates and alerts, especially during holiday seasons?
  • A CFO may want to do a virtual close on an hourly or daily basis, but is this imperative to do every second of the day?
  • Does the head of HR at a 15,000-person organization really need real-time updates of newly hired and terminated employees? Or are daily, weekly, monthly or even quarterly reports sufficient?

Simon Says

I don't know the answers to questions such as these. I'll be the first to admit that the proliferation of new DI tools can be confusing. More than ever, options abound. I can say, however, ETL tools and data warehouses are not the technological equivalents of beepers. That is, they can still play a valuable role in organizational data management and integration efforts. I don't see that changing anytime soon.

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About Author

Phil Simon

Author, Speaker, and Professor

Phil Simon is a keynote speaker and recognized technology expert. He is the award-winning author of eight management books, most recently Analytics: The Agile Way. He consults organizations on matters related to strategy, data, analytics, and technology. His contributions have been featured on The Harvard Business Review, CNN, Wired, The New York Times, and many other sites. In the fall of 2016, he joined the faculty at Arizona State University's W. P. Carey School of Business (Department of Information Systems).

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