The effects of data warehousing on organizational performance in retailing firms: An empirical study

The competitive business environment is putting tremendous pressure on the retailing industry. In addition, customers who have more knowledge about markets and products and/or services, through the Internet generated information, are becoming more sophisticated and hold greater expectations than ever before. Because of the data intensive nature of retailing (“retail is detail”), data warehousing has been developed to analyze customer needs and to cope with competitive global markets by the retailers. With the increasing popularity of data warehousing, the paucity of empirical research in this area has become a growing concern. The primary objective of this research is to investigate the relationship between the use of data warehousing and organizational performance of retailing firms. To achieve this goal, five hypotheses are developed and tested. The paired T-tests and Hotelling\u27s T-square tests are performed on the two groups—retailing firms implementing data warehousing and those not. The results of analyses show that data warehousing firms achieve better nonfinancial performance, including promotional performance analysis, vendor analysis, customer analysis, and market segmentation analysis, but do not achieve better financial performance, including the year-to-year percent change in sales per employee, return on sales, and year-to-year percent change in sales. By expanding the study of information systems (IS) effectiveness and data warehousing, this research represents a pioneering effort in measuring the impact of data warehousing on organizational performance. Furthermore, a theoretical framework for measuring IS effectiveness is proposed. This framework will help both IS academicians understand the IS evaluation methods and practitioners measure the payback of IS