Data warehouse applications can have a wide variety of benefits which can be classified under two categories, namely Soft Return on Investment and Hard Return on Investment (ROI). Soft ROI includes advantages such as customer satisfaction, increased productivity, technology leadership, cultural change and lower information processing costs, while the hard ROI include benefits such as direct cost savings and increased market share. Direct cost savings can be maximized by proper changes in the organizational design and strategies (Dyché, 2000).
Organizational design and the design of work processes are shaped by the amount and type of information required in a given environment and the organization's information processing capabilities. Kennedy (1994) compares the serial (vertical) and parallel (horizontal) organizational structures to select the optimum structure based on the information processing capabilities of the organization. He found that the parallel structure provides better decision-support and also results in lower information processing costs.
Since a data warehouse can provide more detailed, integrated, accessible and historically complete information, it is possible for an organization to operate very differently and `restructure' itself. Guha et al., (1997) investigated three companies that have implemented large-scale Information Systems (IS). They found that the organizations that reshaped their design and strategies, got back tremendous returns. One of the companies, Lucent Corporation, realized a $250 mn turnaround for six consecutive profitable quarters. On the other hand, a paper manufacturing company incurred only lower-level benefits like reduced cost of operations and improved information access, because it failed to redesign its structure and processes in line with the IS strategic objectives. |
