Liffe is Europe?s biggest futures and options exchange, with up to 2,500 buyers and sellers dressed in bright jackets trading in the pit by shouting out the prices at which they want to buy or sell.
The market investigators responsible for safeguarding Liffe?s reputation use a Whitecross data warehousing system to sift through records of trades which flood in at a rate of up to 12 million a month.
End users with no experience of the system can do complex searches across different database tables and pose questions about trading patterns that would have previously been impossible. The information produced by the data warehousing system is also being used by Liffe to develop new financial instruments.
As many as 100 of the Times Top 1,000 companies have each invested an average #1.5m in data warehousing systems like Liffe?s. This is in an effort to profit from the large amounts of data collected in the course of business, according to Roger Gilheany of software company Cognos.
?The individual customer is the target, the basic objective being to maximise profit,? says Dr Wolfgang Martin, European programme director at research firm Meta Group. ?Identify your best customers and devise ways to keep hold of them. Find out how to detect bad customers and encourage them to move to your competitors.?
While there is nothing new in building and querying databases, data warehouses ? essentially databases of databases ? have greatly increased the ability of users to use historical business information to uncover hidden trading patterns.
With improved techniques for gathering data, new mathematical algorithms and powerful processors, you can now quickly search collections of 50 million records or more in seconds. Early last year, research company IDC claimed users of data warehouses were enjoying investment returns of more than 400 per cent over a period of three years.
Others are not so sure. Cognos, which supplies tools for searching data warehouses, points out that data warehousing systems need to be easier to use. Inconsistent data, poor response times and complex search routines are turning end users off systems?, says Roger Gilheany.
He points out that users have reacted by building smaller data warehouses containing specific information, often on a pilot basis. ?A few years ago, 70 per cent of people who had data warehouses were looking at data from everywhere, but now 70 per cent have set up smaller data marts,? he reports.
A recent survey of 400 Times Top 1,000 companies by Benchmark Research revealed that, among companies that had yet to invest in data warehouses, two-thirds were concerned about implementation costs.
Significant numbers were also worried about data quality and security. Among those who had taken the plunge, user training was a top concern, although costs and data quality were also seen as potential problem areas.
Patrick Doherty, database manager at Liffe, is adamant that users need to be closely involved from the outset of a data warehouse project. Rather than being driven by conventional considerations, the IT department should demonstrate what is possible, and encourage its users to be creative and visionary about what they want from information systems.
Doherty advocates focusing on a single task to get fast results. These could then be used to show the benefits of data warehousing.
John Lamb is contributing editor for Business Computer World.
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