The Growing Case for Third-Party Data
Far from being a complementary or nonessential data management option, third-party data can become a competitive differentiator.
In his most recent Checklist Report for TDWI Research, industry veteran Philip Russom makes a case for augmenting in-house data (in this case,
product data) with third-party or subscription data.
That's just one of the recommendations in Russom's TDWI Checklist Report: Product Data Quality. His latest writing, like other works in TDWI's Checklist series, offers customers a primer for product data quality. He discusses a number of data quality recommendations, including the importance of classifying product data; the benefits of extracting product attributes from their semantic (or natural-language) context; and the imperative to increase the analytic effectiveness of product data.
Along the way, Russom addresses the attractiveness -- along with the potential value -- of acquiring data from third-party sources. His recommendation underscores what might be called the mainstreaming of third-party data: it's gone from outlier to popular option in just a half-decade. "Products -- or supplies that go into products -- are procured from partnering companies so regularly that data about suppliers becomes as important as data about the products and supplies," Russom points out. "Graining a complete view of suppliers beyond whatyou can see from enterprise data requires data purchased from third parties."
It's an idea that's generated considerable buzz over the last few years.
Ask a mix of data integration (DI) vendor about it, however, and you'll likely get a mix of different responses. Yes, companies in specific industries have been consuming third-party or subscription data for some time now. Yes, the diversity of subscription services -- which cater to an ever-expanding number of industries -- continues to grow. Yes, more companies are expressing interest in the idea of processing third-party data -- particularly data from Web sites, forums, blogs, or other social media resources -- even if they haven't yet implemented a rigorous or standardized means of doing so.
The question is: Is there a demonstrable uptick in demand for data from third-party sources?
The answer, it seems, is also yes. There's an ever-expanding base of subscription data feeds. Russom cites the example of one long-standing service, D-U-N-S Number, a business information service offered by Dun & Bradstreet. Both D-U-N-S Number and other services (along with existing or emergent services from Yahoo! Finance, InfoUSA, MarketWatch, Moody's, and others) have gone mainstream such that they're consumed by companies across a range of different vertical industries.
"[T]hese unique identifiers are a standard way of identifying companies, including your suppliers," Russom writes. "Likewise, Moody's debt ratings help you quantify the risk of doing business with specific suppliers. These and other external data sources help you complete the view of your suppliers and the products acquired from them."
More to the point, Russom has argued, companies believe that they can get a more complete view of their operations by integrating data from third-party or external sources. Far from being a complementary or an nonessential data management option, the effort to effectively integrate data from third-party sources -- and the ability to identify new or innovative third-party data services -- can become a competitive differentiator.
"Coming closer to a 360-degree view of customers usually requires the enhancement of enterprise data with consumer data purchased from a third-party data provider," wrote Russom, in TDWI's "Checklist Report: Operational Data Quality" earlier this year. In other cases, he suggests, a combination of third-party data with in-house data can pay additional dividends.
"Enhanced customer data provides even more insight when complemented with information from other data domains such as finance, customer service, and products."
Stephen Swoyer is a Nashville, TN-based freelance journalist who writes about technology.