Companies consider external data “very valuable,” especially amid uncertain market conditions, but lack the strategy, skills, time and resources to acquire it, according to new Explorium research
Explorium, the automated external data platform for advanced analytics and machine learning, today released its 2021 State of External Data Acquisition report. The survey found that while 79% of organizations consider external data to be “very valuable,” only 28% have a data acquisition strategy in place. This is despite 81% of companies spending over $1M annually on external data, a further 31% spending over $6M and 78% planning to increase their data acquisition spending in 2021.
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The rapid changes brought on by the COVID-19 crisis proved how quickly internal data can be made obsolete. Companies are turning to external data such as foot traffic, pricing data, firmographics, technographics and other marketing and financial attributes to better understand conditions and improve their predictive models. Third-party data is used to enhance analytical and machine learning models that forecast demand, understand buyer behavior, improve conversion rates, assess risk and detect fraud.
However, securing the correct data signals to improve these models is time-consuming and fragmented. 98% of surveyed companies engage with two data providers, and 69% of companies engage with three or more. In some cases, data stakeholders were using multiple tools for the same task.
All this shopping around creates major cost, productivity and compliance challenges that discourage organizations to leverage the benefits of external data. The survey documented a high positive correlation between the number of vendors a company engages with and money spent (0.89) and time spent (0.64) on data acquisition. 91% of surveyed companies report investing more than 20 hours per month on data acquisition. 49% are spending more than 50 hours per month.
“With more than 90% of external data buyers reporting that they struggle to find relevant data, and 77% admitting that they don’t even know what to look for, this report makes a clear case for automation,” said Maor Shlomo, Co-founder and CEO at Explorium. “Organizations need a single platform that can reduce the complexity of acquiring external data, demonstrate the uplift in predictive and machine learning models, ensure compliance and provide immediate access to the right insights.”
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