Data is the key to growth — it is vital for businesses to understand how they can harness and apply external data, because it provides an unbeatable competitive edge.

What is external data? 

External data comes from sources that are outside of an enterprise. It includes customer surveys, social media data, and third-party market research.

There are several ways that external data can drive business growth:

1. Gaining unbiased insights into customers and target markets.
   
   
2. Identifying new business opportunities.
   
   
3. Tracking and measuring a company’s progress over time.
   
   
4. Benchmarking and measuring performance against other companies.
   
   
5. Allocating resources more efficiently and enabling better decisions.

Why is external data necessary? 

External data sources can provide essential information for businesses.

Insurance companies apply insights from external data to meet customer expectations. External data can also be used to price auto insurance more accurately.

In financial services, external data is part of ID verification processes for identifying and preventing fraudulent transactions. Marketplace companies use external data to maintain trust and improve their onboarding workflows for new vendors. And geolocation data can provide a comprehensive view of business clients.

In other industries, external data is used to improve marketing efforts and manage risks in the supply chain.

How is external data accessed?

A data integration platform — also described as an orchestration layer — allows enterprises to connect with different data sources, combining that information in a central repository. 

Data integration platforms need to make important decisions regarding data coverage, consistency, and compliance:

• Coverage: Some information may only be available from specific data providers. Other data providers may have more complete coverage in markets that are less relevant.
  
  
• Consistency: Data providers can present information in unique formats or sort identical properties under different metadata structures. Enterprises trying to compare equivalent data from multiple providers may need to perform additional entity resolution work.
  
  
• Compliance: Privacy considerations and the ethics of data collection processes should be carefully examined as part of due diligence efforts when integrating information from new sources.

Enterprises that build their own data integration platform must also allocate appropriate resources for the platform’s ongoing maintenance and support.

Does every company need external data capabilities?

External data provides access to new markets, new customers, and new insights for making effective decisions. However, enterprises need to weigh the benefits of external data against the costs of managing their own data integration platforms.

Data exchanges like the Snowflake Data Marketplace, the AWS Data Exchange, and the Demyst platform can offer cost-effective access to external data. Organizations can also work with partners who have already developed external data expertise and made the necessary investments in data infrastructure.

Without access to external data, companies are limited in their ability to make decisions, find new opportunities, and keep up with competitors. The relevant question is not whether organizations need external data, but whether they need to build their own data infrastructure and manage relationships with multiple data providers.

By working with Demyst, enterprises can access a single global interface for discovering, building, and deploying the right external data solutions.