In the constant quest to deliver new insights to the business, data-driven leaders are increasingly looking to non-traditional sources of data—both from within the walls of the company and outward to external providers. We’ve covered this trend before here on the APEX of Innovation, including the new era of data sharing, what you need to know about personal data marketplaces, and how the Internet of Things (IoT) is creating endless data at the edge.
The use of so-called alternative data—or data that is drawn from non-traditional sources—first emerged in the financial services industry as an additional tool to assist investors in making better predictions and generating better returns. Today, alternative data is being generated from new sources across all industries. Below we look at the various types of alternative data and how it’s being used by cutting-edge companies in new ways:
- Individuals: There’s more personal data in the world than ever before. This includes web-based data, such as social media sentiment, website traffic and searches, and application usage. Innovative companies are capturing it, structuring it, and putting it to work more than ever before using it to improve marketing and sales conversions, for customer personalization, and future product development.
- Business Processes: With the world going digital, there’s a wealth of process-oriented data being generated everyday, including credit and debit card transactions, public information records such as real estate transactions, and consumer behavior data. Using this data, companies are targeting customers at the right time with the right offer or offering new ‘free’ services that help customers organize and complete tasks like scheduling a monthly bill payment.
- Sensors: As the Internet of Things (IoT) takes off, data is coming from new sources and locations that may have seemed impossible just a few years ago. For example, forward-thinking farmers are now using sensors placed deep down in the soil to monitor moisture levels, providing crops with just the right amount of water. This unique example cuts operational costs and conserves to reduce environmental impact. In other cases, sensor data is being used to monitor manufacturing equipment usage to improve maintenance and to analyze automobile traffic to improve safety and reduce accidents.
Has your company looked into how alternative data sources can help your business? To learn more, see this recent APEX of Innovation post on data marketplaces.