With the development of APIs, smartphones, SaaS, cloud computing, and apps, the IT environment is rapidly evolving.
What's more, businesses are discovering that they need to rethink how they interact with customers since there are more channels than ever for customer engagement.
As such, the distribution of essential information across departments and different apps, systems, databases, and platforms is often extensive.
Customer Data Integration (CDI) offers companies an advantage by giving them a comprehensive, integrated view of their clients.
What Is Customer Data Integration (CDI)?
CDI is the act of consolidating and categorizing customer data from various databases into a single format that is more usable and accessible. By doing this, companies can improve their analytical capabilities.
The initiative requires a collection of procedures and technologies to define and manage the non-transactional data elements of an enterprise.
However, it is not to be confused with MDM (Master Data Management). While they share a standard logical methodology, CDI focuses on CX data, while MDM encompasses the enterprise.
Typically, IT teams include the following processes in customer data integration:
- Data Extraction: Gather and group various types of data into a single data storage space.
- Transformation: Convert, cleanse, and collect the data, ensuring the IT teams save it in a standardized format.
- Uploading: The destination system, which may later develop into a data warehouse, receives the processed data and stores it there. Instead of processing transactions, record data in the system for access and analysis.
CDI is a vital part of a company's overall data management strategy. When executed correctly, it enhances business intelligence, providing a complete view of the customer journey, and facilitating more informed decision-making.
Why do Companies Need Customer Data Integration (CDI)?
The primary purpose of customer data integration is to break down data silos. When a barrier separates two or more pieces of data, silos occur. It prevents businesses from obtaining an overall understanding and making judgments based on accurate data.
Without a CDI strategy and the technology infrastructure to support it, companies may struggle to gauge and fulfill consumer expectations, ensure compliance, and make the right decisions.
For instance, a company could wish to execute an advertising campaign that targets its most loyal consumers. Data from several sources, including the CRM and CDP, must be integrated for such a campaign.
Indeed, the business may need to include data from applications that keep track of sales, emails, and website data. Without CDI, this is not feasible.
The 4 Types of CDI
Four forms of customer data integration exist. These are:
1. Consolidation
The first form of data integration is consolidation. It combines data from many sources and stores it in a single data warehouse.
When a company wants to reduce the number of locations it stores data, consolidation is critical, as businesses may quickly obtain the necessary data for end-user analysis.
