External Data

External Data refers to any data that comes from outside an organization, rather than being generated within it. Imagine a business as a house, with all kinds of activity going on inside—this is where internal data comes from. External data, on the other hand, is like the weather reports, traffic updates, or news from the neighborhood; it’s information from the wider world that can impact what happens inside the house. In business intelligence, companies use external data to make better-informed decisions by providing context to the internal data they already have.

This type of data can include things like market trends, economic indicators, competitor information, or customer demographics. For example, a retailer might use census data to decide where to open new stores or a tech company might look at industry reports to guide their product development. Accessing data from social media, government databases, or industry surveys can also give businesses valuable insights about consumer behavior or emerging trends.

Using external data is vital for businesses because it rounds out their view of the market and helps them adjust their strategies based on what’s happening in the world at large. It’s not just about looking inward at company performance; it’s about looking outward to understand the forces that influence that performance. With both internal and external data at their fingertips, businesses can make smarter, more proactive decisions.