Most organizations aim to be data-driven and rightly so. With data being created at an exponential level at various touchpoints, it only makes sense to incorporate it into decision-making. Credible data can work wonders and Amazon is a prime example. Data helps the retail giant practice hyper-personalization and price optimization, which gives it a competitive edge. Data has also helped Netflix achieve a 93% customer retention rate, which is commendable.
However, in a rush to become more data-centric, organizations collect more and more data, but in doing so, they ignore a critical aspect, which is organizing and managing data. Often departments end up clamoring for numbers because while data exists, it is not readily available. So, in the end, decisions are made in a hurry with whatever numbers are available.
Such situations often happen because either data is trapped or stored in silos. Data silos not only kill productivity but also lead to bad decisions and ultimately hurt a company’s bottom line. To leverage data efficiently, an organization needs to break data silos and data consolidation is the answer.
What is Data Consolidation?
The term data consolidation is often used synonymously with data integration. It refers to the process of combining data from various sources into one place, which makes it easier for all users to access data without any time lag.
ETL, which stands for extract, load, and transform, is a pivotal process in data consolidation. There are various ETL tools in the market that make it easier for companies to extract data from legacy systems and unconventional sources, cleanse it, transform it, and load it into the desired destination.
However, organizations are often not convinced of investing in a data consolidation or data integration tool and tend to carry on with their traditional system of data analysis. But what these organizations fail to understand is that data without consolidation, data is just data without much use.
Here are some advantages of consolidating all business data from various sources into one place:
Creates A Single Source of Truth
Imagine a scenario where an organization has to come up with a new marketing campaign. While apparently a marketing campaign is the sole responsibility of a marketing department, there is a continuous exchange of information from other departments such as sales, procurement, and finance. All this back and forth is not only a productivity killer, but it also increases the chances of error.
There is a huge difference between available data and accessible data. Data might exist, but when it is stored in silos, it becomes hard to access. When an organization centralizes all its data in one place, it improves the retrievability of data by all departments.
Having bad data is worse than having no data because bad data can wreck your business decisions and cripple your organization financially. Research by Gartner suggests that bad data costs companies as much as $9.7 million annually, and this does not include only tangible costs in terms of loss of revenue or customers; bad data can also lead to loss of reputation and missed opportunities. Forbes Insights and KPMG “2016 Global CEO Outlook highlighted that 84% of CEOs have a hard time basing their decisions on data because they don’t trust its quality.
When data is consolidated and stored in one place, data quality and integrity increases significantly. A unified view of data ensures that no one makes unauthorized changes, there are no redundancies in data, and consistent data is available throughout an organization.
While consolidating through the ETL process, an organization puts data through various transformations and validation rules that ensure that data entering a destination is unique and error-free.
Gives a Holistic Customer View
Organizations today use multiple apps to store customer data, such as HubSpot or Salesforce. Aggregating data from various sources into a single centralized repository helps get a complete view of customer interactions.
A study conducted by Marketing Week shed light on some interesting statistics. According to the research, 57% of the companies have still not build a single customer view, which shows that many companies still underestimate the benefits of Customer 360.
A holistic view of customers helps an organization get a better understanding of consumers. For example, hospitals can access a patient’s entire medical history and understand their behavior, such as whether they come for regular checkups, how health-conscious they are, etc.
Customer 360 is useful in the retail sector as it allows retailers to improve customers’ shopping experience by personalizing offers. For example, if a bank knows that a customer’s marital status has recently changed to married, it can send enticing loan offers for leasing a new car or a house.
Leverage Your Data
There are benefits to data consolidation. However, before your company jumps into the process, there are various factors that it needs to keep in mind. Before starting data consolidation, organizations need to ensure that it has a strategy in place, so it doesn’t mess up the process and get entangled in heaps of data.
Data consolidation is an essential step when you want to get maximum value from your data.