We live in a world that's constantly moving at a breakneck pace. In order to keep up, organizations of all shapes and sizes are placing a growing reliance on data to drive their performance and gain a competitive edge in the market. And while business leaders have recognized the potential of internal data solutions, you could make an argument that external platforms are where the real power lies.
These resources provide a range of advantages that can be difficult to replicate in-house, from detailed customer analytics and market insights all the way to deeper insight into how your competitors operate. With this type of intelligence at your fingertips you'll gain an edge over those who do not utilize them - making them practically essential for success in today's competitive environment.
External data platforms, also known as "third-party data" or "alternative data", are cloud-based solutions that open up access to an extensive array of external data sources. This goes beyond the typical internal records like customer and sales databases - it includes industry resources from a range of industry sources, making it an invaluable tool for decision-making and business analysis. According to McKinsey, examples of external data include:
By combining a wide range of sources into one easily accessible platform, external data platforms provide organizations with a detailed overview of their industry, customers, and competitors that can be leveraged to inform decisions and drive performance.
Now that you know what external data platforms are, let’s take a look at the benefits they offer to businesses.
External data platforms provide access to an array of sources that give businesses the insights they need to make informed, accurate decisions. These platforms offer an extensive view into their industry, allowing them to identify macro trends and micro-level consumer insights.
Thanks to their ability to quickly compile data from multiple sources, these platforms allow businesses to gain agility in identifying trends, opportunities, and risks in their environment. This level of agility is invaluable for organizations of all sizes.
Storing data in one place via external data platforms guarantees its accuracy and reliability, saving time on manual data processing and eliminating the risk of human error when making decisions.
Many external data platforms are designed for easy integration with pre-existing business systems, so users can import the platform's data into their cloud data warehouse without issue. This streamlines access and utilization of the data, letting companies take full advantage of their external resources.
Combining information from different sources and analyzing it quickly leads to cost savings over traditional methods. Plus, many external data platforms are subscription-based, allowing businesses to pay a single flat rate and still get all the necessary components they need.
These platforms enable businesses to gain detailed customer insights which help them understand their audience better so they can personalize strategies accordingly. This provides a more valuable experience for customers resulting in increased loyalty over time.
As businesses look to implement external data platforms into their operations, they must be aware of the potential challenges ahead. Here are some of the most common issues that organizations might face:
Ensuring the quality and accuracy of the data is essential for organizations using external data platforms. Companies should pay close attention to verifying the sources of their data, as well as make sure it is up to date. If the data is unreliable or outdated, any insights derived from it could lead to costly decisions.
Organizations must also consider implementing restrictions and protocols surrounding how data is used responsibly and ethically. To do this effectively, an effective data governance strategy should be put in place prior to using an external platform.
Businesses need to take precautions when collecting, storing, and accessing data on their external platform. All measures used should comply with privacy regulations while also remaining secure and inaccessible to unauthorized persons.
Finally, companies must follow all relevant legal and ethical standards related to their industry when dealing with external data. This includes making sure any collected data follows all regulations while also ensuring the platform itself meets requirements such as GDPR (General Data Protection Regulation). With its recent emergence, extra caution must be taken with regard to compliance when implementing external data platforms.
In an age where data and analytical insights are king, many organizations are turning to external data platforms in order to get access to the information they need to better serve their customers and improve operations. However, it is important to remember that not all external data platforms are created equal, and businesses must take care to ensure the quality and accuracy of the data they are collecting.
If you can successfully navigate the challenges associated with external data platforms, you can gain access to invaluable insights that will help your business stay ahead of the competition and better serve your customers.
