External Data – Why Is It Essential for Business Efficiency
When it comes to analytics and insights, internal data seems to be the first place companies go for. However, they should not miss the wealth of value generated from excavating external and third-party datasets. External data sources will help you know what your competitors are doing and how consumer behavior patterns can affect your performance. Information regarding your operation, like sales and operational performance, can tell you what happened in the past. It can also help you predict the future and the possible business outcomes. It is essential to be aware of both kinds of data if you want to take as much advantage as you can of the transformative opportunities provided by data and analytics.
AI and Machine Learning in a World of Data
Artificial intelligence and machine learning, combined with data, are increasingly becoming a transformative force in various industries and markets. Sadly not all companies can achieve this. Not every company has sufficient resources like Amazon and Walmart. These companies can create a large amount of proprietary, internal data from a customer base of millions.
The changing consumer behavior during the pandemic meant that many of the current models that businesses use to predict demand were now irrelevant. Large amounts of internal data became of no use. Companies found external data important in creating new models to forecast the number of people reacting to changing situations. Data on internet search traffic held value for everything. Companies use it for everything from tracking the speed of the virus to forecasting where the changing behavior will hit the most.
Sources of External Data
External datasets can be available to the public, For instance, various governments have a wide range of information accessible on portals such as data.gov and data.gov.uk. They can also be held privately. This data is available both on a pay-to-use and free model, based on your data source, credibility, and information available. Companies like Nielsen and Experian offer marketing and demographic data collected from various sources.
Finance and credit card companies have been using external data from credit reference agencies. They use this primarily to gauge the risks of giving out loans to each customer. Real estate uses public data of property sales to calculate the value of houses they buy, sell or lease.
We should not ignore the role played by the external data in the transformative power of the “digital twin.” It is a duplicate form of a business, product, or process that helps forecast how different variables will impact real-world performance. The external data can be used to imitate the “world” that the twin exists in.
There are always some challenges to things that provide benefits. And this does not always mean a cost factor. When it comes to external data, you do not have direct control of the ways of collecting data. You might find yourself being more reliant than needed on the data provider, which might disappear or significantly change its ways of operating at any time. There can also be some technical issues.
Working with various datasets from multiple providers requires you to ensure that the data is in a set format that is easily in-tune and merged. Most crucial insights can come from merging two or more different and entirely distinct datasets. Finally, as you find yourself needing multiple data sources, you will also have to build and maintain relationships with other data suppliers. You will always find yourself ensuring that the data you buy comes from lawful and ethical data capture. And if your vendor fails you in this aspect, you might face a huge penalty, besides losing your brand reputation.
If your company is capable enough to put plans and strategies in one place to manage all of that, then working with external data will be highly beneficial for you. Data and analytics will not be about “you.” Rather about creating awareness of the environment and ecosystem the company is surrounded by. You will also become efficient all-around your current business model. This will even change the way you create, manage, and operate your organization. So, are you ready to explore the benefits of external data? Let us know in the comments section. Don’t forget to share this article with your peers!
More in Business & Finance
This Is Why You Should NOT Hesitate To Talk to Your Colleagues About Your Salary
Workplaces seem to have an unvoiced rule – no discussion about the money you rake in. Many a time, you will...August 31, 2022
How To Be A Personal Finance Ninja At A Young Age
Getting into the real world is one of the most exhilarating times in an individual’s life that remains etched in our...August 29, 2022
Tech Stocks You Can Invest in Prior to Your Retirement
Getting ready for your retirement needs meticulous planning. Accomplishing an agreeable retirement is a vital occasion for a majority of individuals, from a...August 24, 2022
Four Practical Tips On How To Pick Up The Best Auto Loan Deals
At the moment, more and more Americans are finding it hard to shell out their car payments within the stipulated time....August 24, 2022
The Best Questions to Ask After a Job Interview
However confident you may be about your experience and your expertise, job interviews can be quite intimidating. While trying to make...August 22, 2022
How to Turn Your Small Hotel Business into a Grand Success
Want to lay your hands on some profits with your small hotel business? Provisioning service in the hospitality industry certainly reaps...August 17, 2022
What You Need To Know About The Global FIRE Movement
Have you heard of the FIRE movement? If not, let us explain. The FIRE movement is a global movement that has...August 16, 2022
Why Should You Have Multiple Bank Accounts?
The best way to fortify your wealth and avoid debt is to make a foolproof plan saving as much money as you...August 11, 2022
Top Actors and Actresses Who Retired Early and Surprised their Fans and Critics Alike
Although there are many who dream of making it big in Hollywood, there are not many people who are able to...August 10, 2022