Generating added value with external data
The successful analysis of external data can bring a decisive competitive advantage for companies. In this overview, you can find out what needs to be taken into consideration and exactly what advantages this offers your company.
Already in 2017, the magazine “The Economist” published an article with the title “The world’s most valuable resource is no longer oil, but data”. However, not all data is the same – for a correct analysis and forecast, it is necessary to first distinguish between two types: internal and external data. Where exactly is the difference? While internal data is accumulated along the core processes in a company, such as customer data in sales, external data is purchased, crawled or directly connected via various APIs – it is therefore collected outside the company structure and can bring real added value to the company. An example of this is weather data, geodata or prices from competitors.
Every department in a company automatically generates internal data. These are (ideally) first stored in a data lake and above all enable transparency and insights into the company’s daily business. External data is particularly necessary for market analysis and essential for ensuring competitiveness. They also provide significant added value, such as reducing risks and challenges through data-driven predictions. Whether for consumer goods, logistics, finance or energy, economic data can add value in any industry. For example, external data can be used to anticipate demand according to regional & socio-cultural characteristics, so that demand can be met more efficiently, customer satisfaction can be increased and costscan be reduced.
“You need the addresses of all pharmacies in Germany with the names of the owners? Can I get back to you in an hour?”
Julian Koller, Consultant, Transform8 GmbH
The collection and storage of internal and external data is a technical challenge for many systems as the amount of data continues to grow. However, clear data management is only half the job for successful data analysis. With the help of the “preprocessing” procedure, the acquired data is ordered, cleaned and prepared for processing and visualization. By using appropriate business intelligence tools, the data can now be analyzed and forecasts can be made. In the context of this analysis, recognized correlations, for example between consumer behavior and external data, can generate a decisive competitive advantage for companies.
However, external data also brings with it certain challenges for a company, which can be broken down into three dimensions: Expertise, technology and responsibility. These range from required security protocols for external personal data, to sourcing non-public data sources, to the time-consuming nature of competitor data collection. The precise identification, quantification, and structuring of relevant data therefore require a high level of technical as well as domain-specific expertise, often contributed by the company’s own experts. Capturing external data is an essential goal for a company so that it can keep up with the markets and stay ahead of the competition through customized solutions and real-time analytics.
“You are seeing the shadows of Opportunities that you had in the past”
Jorn Lyseggen, CEO of Meltwater
Real-time analysis and data evaluation by using business intelligence are an essential basis for decision-making for every management. With a successful analysis, companies can not only profitably respond to yet unrealized but predicted pricing actions by their competitors but also optimize their inventory. In addition, the position in the market can be controlled through price intelligence, which supports customer acquisition. In order to find out which data can be incorporated into existing processes in decision-making, the data analysis must compare which costs are opposed to the added value. As there are many possibilities for data evaluation and generation with today’s state of the technology, we as Transform8 GmbH offer our customers a complete consultation in order to be able to generate the best possible forecast.
If you have any questions about external data or Transform8 in general, please contact us at: info@transform8.de.
