Which factor MOST likely indicates that a customer data warehouse should remain in-house?

Which factor MOST likely indicates that a customer data warehouse should remain in-house?

• A. Higher telecommunications costs in the first year.
• B. Privacy laws preventing cross-border information flow.
• C. Time zone differences affecting IT team communications.
• D. Software development requiring detailed specifications.

Answer: (B)

A customer data warehouse should remain in-house primarily due to privacy laws preventing cross-border information flow. Many organizations handle sensitive customer data that is subject to various privacy regulations, such as the General Data Protection Regulation (GDPR) in Europe or the California Consumer Privacy Act (CCPA). These regulations often impose strict requirements regarding data localization and protect the data from being transferred across borders without appropriate safeguards in place. Maintaining the data warehouse in-house allows the organization to have better control over how data is stored, processed, and shared. It ensures compliance with legal obligations concerning data privacy and minimizes risks associated with potential data breaches or non-compliance penalties that could arise from transferring data to an external service provider located in a different jurisdiction. Thus, the presence of privacy laws strongly favors an in-house data warehouse solution over outsourcing. Other factors, while relevant to operational efficiency, do not present the same level of regulatory compliance concerns that privacy laws do. For instance, higher telecommunications costs or time zone differences can affect performance and communication, but they do not inherently determine the legal and compliance aspects mandatory for handling customer data. Similarly, software development requirements involving detailed specifications can be managed through various methodologies regardless of where the data warehouse is located. However, the critical need for compliance with

A customer data warehouse should remain in-house primarily due to privacy laws preventing cross-border information flow. Many organizations handle sensitive customer data that is subject to various privacy regulations, such as the General Data Protection Regulation (GDPR) in Europe or the California Consumer Privacy Act (CCPA). These regulations often impose strict requirements regarding data localization and protect the data from being transferred across borders without appropriate safeguards in place.

Maintaining the data warehouse in-house allows the organization to have better control over how data is stored, processed, and shared. It ensures compliance with legal obligations concerning data privacy and minimizes risks associated with potential data breaches or non-compliance penalties that could arise from transferring data to an external service provider located in a different jurisdiction. Thus, the presence of privacy laws strongly favors an in-house data warehouse solution over outsourcing.

Other factors, while relevant to operational efficiency, do not present the same level of regulatory compliance concerns that privacy laws do. For instance, higher telecommunications costs or time zone differences can affect performance and communication, but they do not inherently determine the legal and compliance aspects mandatory for handling customer data. Similarly, software development requirements involving detailed specifications can be managed through various methodologies regardless of where the data warehouse is located. However, the critical need for compliance with