It’s no secret that firms with more usable data tend to perform better than those with less. Yet, with so many error-prone elements, where should firms start?

Effective data sourcing – from choosing the right provider to taking command of internal proprietary data and integrating data for business use – is critical to a successful data initiative. According to Gartner’s Hype Cycle for Data Management, 2022 report,¹data discovery and management are somewhere between the ‘Peak of Inflated Expectations’ and the ‘Trough of Disillusionment’. In the firm’s yearly research to explore the maturity, adoption, and social application of specific technologies, the market researcher found that firms are well aware of the need for data programs. However, many face challenges in implementing and realizing results from their strategy.

This concern bears out for many financial institutions investing in multi-million-dollar teams to build their data strategy program and source the right data for their business objectives. It’s estimated that global firms are collectively managing a wallet of over $37 billion dollars.²

Begin with the end in mind

When thinking about data discovery, it might seem logical to start with the questions, “What data do I need and where am I going to get it from?”

But taking a step back, one key to data discovery and sourcing success is starting with the desired business outcomes. Firms must determine the outputs they want before they decide what data inputs will best facilitate quality results. For firms that follow this process, a mistake many make is not getting granular enough about their anticipated outcomes. It’s like deciding to bake a cake but not determining what kind of cake before you buy the ingredients. You may end up missing an ingredient, buying more than you need, or not buying the right quality ingredients for the recipe.

So, what are the initial questions firms should consider in building their data sourcing strategy:

Who are the stakeholders that will consume the outputs from front to back?
What processes will the data be an input for?
Will the data be used internally and/or externally?
Who will be responsible for integrating and managing the data?
What other systems will the data interact with?
What specific reporting and analytics requirements do you want to fulfill?

Harness internal data

Internal data is an underutilized asset across enterprises today. Many firms don’t realize they own first-party data as they generate and observe proprietary data exhaust during their normal course of business.

A comprehensive catalog of existing internal data assets is the foundation of an external data sourcing strategy. However, internal data doesn’t come neatly packaged with marketing collateral, schemas, and samples that clearly define the product and access method. It takes a dedicated, collaborative effort from internal teams to understand, organize, and unify internal data. A firm’s data footprint consists of internally built and externally leveraged tools in a structured or unstructured format.