Challenges of data warehouse carve-outs

Carving out a data warehouse can look like a straightforward task on the surface.  The path of least resistance would seem to be to replicate the parent’s environment as-is in the carve-out organization, using the exact same software and architecture.  However, this is not always going to be the best solution.  In most cases, the new organization is much smaller than the parent organization and will have significantly fewer capabilities to support the data warehouse than the parent.  In addition, changes within both the parent and the carve-out organizations during the transition period can lead to an implementation in the new organization that needs to be different than the parent’s implementation.

Change can be a significant component during carve-outs.  The capabilities and needs of the carved out organization will not always match up with those of the parent.  Therefore, the implementation needs to adapt to match up with those needs and capabilities.  Here are a few major challenges that you need to be prepared to tackle:

  • High software licensing costs:  Large organizations with mature BI platforms usually have expensive database, ETL and reporting tools to power their data warehouses and reporting systems.  However, chances are that the budget of the new organization is much smaller than the parent’s budget and the licensing and support cost of those tools can exceed what a smaller organization can afford.  With this in mind, make sure to analyze what the carved out organization needs to do business and whether any lower-cost alternatives are feasible.  The market for BI tools is more mature than it was just a few years ago, and lower-cost alternatives can prove to be just as capable as the tools provided by the traditional high-cost vendors.  While moving to a new set of tools may lengthen the time needed for the carve-out effort or increase the amount of resources needed to perform the implementation, the effort can pay itself off over the long run in lower licensing and ongoing support costs.
  • Complex architecture:  This can be a great opportunity to rework the architecture without significant additional impact to the business or the IT staff.  Usually the parent company does business in vertical or geographic markets that the new company will not be participating in, and complexity related to this can be eliminated.  In addition, the parent may have gone through acquisitions and mergers that resulted in additional complexity while trying to adapt an acquisition target’s data into an existing data warehouse.  Simplifying the architecture where possible can ease the transition of responsibility to production support staff, as the IT staff may be much more limited in skills and manpower than the parent.  A simplified architecture can reduce the timeline of the implementation as well.
  • Code changes at the parent organization:  While the carve-out is occurring, the parent organization will continue conducting its day-to-day operations.  This includes their IT operations, as the parent’s IT staff continues maintenance of code in the data warehouse.  This can lead to issues during building and testing as developers attempt to hit a moving target and users attempt to validate results in the new environment against the parent’s environment.  Make sure to have a process in place to get logic and code changes communicated to the new organization, as well as a change control process to prioritize logic and code changes for evaluation as they come in.

As the case usually is for implementation projects, the right amount of planning will help ensure a successful carve-out.  Well-calculated changes in the right places can help ensure a solution that meets the needs and capabilities of the new organization, and the result will be a data warehouse that can well serve the organization.

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