A data warehouse USUALLY captures data with same degree of details as available in source. The "degree of detail" is termed as granularity. But all reporting requirements from that data warehouse do not NEED the same degree of details.

To UNDERSTAND this, let's consider an example from retail business. A certain retail chain has 500 shops accross Europe. All the shops record detail level transactions regarding the products they sale and those data are captured in a data warehouse.

Each shop manager can access the data warehouse and they can see which products are sold by whom and in what quantity on any given date. Thus the data warehouse helps the shop managers with the detail level data that can be used for inventory management, trend prediction etc.

Now think about the CEO of that retail chain. He does not really care about which certain sales girl in London sold the highest number of chopsticks or which shop is the best seller of 'brown breads'. All he is interested is, perhaps to CHECK the PERCENTAGE increase of his revenue margin across Europe. Or may be year to year sales growth on eastern Europe. Such data is aggregated in nature. Because Sales of goods in East Europe is derived by summing up the individual sales data from each shop in East Europe.

Therefore, to support different levels of data warehouse users, data aggregation is needed.

A data warehouse usually captures data with same degree of details as available in source. The "degree of detail" is termed as granularity. But all reporting requirements from that data warehouse do not need the same degree of details.

To understand this, let's consider an example from retail business. A certain retail chain has 500 shops accross Europe. All the shops record detail level transactions regarding the products they sale and those data are captured in a data warehouse.

Each shop manager can access the data warehouse and they can see which products are sold by whom and in what quantity on any given date. Thus the data warehouse helps the shop managers with the detail level data that can be used for inventory management, trend prediction etc.

Now think about the CEO of that retail chain. He does not really care about which certain sales girl in London sold the highest number of chopsticks or which shop is the best seller of 'brown breads'. All he is interested is, perhaps to check the percentage increase of his revenue margin across Europe. Or may be year to year sales growth on eastern Europe. Such data is aggregated in nature. Because Sales of goods in East Europe is derived by summing up the individual sales data from each shop in East Europe.

Therefore, to support different levels of data warehouse users, data aggregation is needed.