Reverse ETL as the data-driven secret to success

Reverse ETL as the data-driven secret to success
Data and context
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Data Management
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Author
Laura Schumacher
Reading time
4 minutes

Reverse ETL: key component in the Modern Data Stack

A data warehouse enables the elimination of data silos, but can ironically become one itself. The collected data often lies around uselessly in the warehouse because its further use presents companies with a major challenge. The integration of reverse ETL pipelines is helpful.

Moderne Unternehmen speichern riesige Mengen an Transaktions- und Analysedaten in <a href="https://www.taod.de/tech-beratung/snowflake“ data-webtrackingID="blog_content_link" > Data Warehouses wie Snowflake </a>, Google BigQuery, Amazon Redshift oder Azure Synapse. Das Data Warehouse hat sich für ein Unternehmen zum zentralen Nervensystem entwickelt und funktioniert als Single Source of Truth, in der alle Daten gesichert und organisiert zusammengeführt werden. Mit der Investition in ein Data Warehouse forcieren Unternehmen unter anderem die Beseitigung von Datensilos, die bekannterweise eine Blockade für eine effiziente und leistungsfähige Unternehmensausrichtung sind.

After all, if important data is not centralized in one place, but is incomplete and distributed in various tools, departments will end up working with different information and perspectives. Reverse ETL pipelines are used to integrate data from the data warehouse into the tools and processes used by employees on a daily basis in order to exploit its full potential.

Data integration approaches: The derivation of reverse ETL

To understand reverse ETL, it is helpful to take a look at the ETL and ELT integration approaches.

ETL refers to the sequence of classic data pipelines: Extraction - Transform - Load. Raw data is retrieved, transformed and fed into a database. The process of transformation refers to the cleansing, filtering, formatting, enriching and organizing of this data in order to simplify the creation of models in the database.

However, most cloud-based databases follow the modern ELT approach: Extract - Load - Transform. The data sources are transferred directly to the target system and only transformed there. This approach is particularly advantageous for large volumes of data, as it supports scalability and uses fewer resources.

Reverse ETL , on the other hand, refers to an integration approach in which current data is extracted from the data warehouse, transformed for further use and loaded into operational business applications or operational systems, unlike the approaches described above.

Why should data be moved from the warehouse if it is already stored there?

Reverse ETL enables companies to operationalize data in the systems and processes used and to take meaningful action with verified and trustworthy data. According to the "close the loop" principle, relevant and useful findings are obtained and then used and applied in a targeted manner. In addition, a company-wide standardized definition of core metrics can be ensured. The advantages of reverse ETL are

Data automation
Workflows can be automated and transferred directly within the operating system. Reverse ETL enables the efficient and optimized creation of workflows and the elimination of time-consuming manual requests for data.

Reduction of cross-team data silos
A verified database facilitates cross-departmental collaboration and avoids errors. Data required for decisions and strategies does not have to be searched for, but can be integrated directly into the appropriate tools and systems.

Steigerung der Kundenzufriedenheit
Mit Reverse ETL kann die Customer Experience verbessert werden und sich positiv auf den Verkauf auswirken. So wird das Kundenerlebnis mit Hilfe vorhandener Daten einer <a href="https://taod.de/data-solutions/customer-data-platform/“ data-webtrackingID="blog_content_link" > Customer Data Platform </a> personalisiert, um einfache Lösungen für Probleme zu finden, mit denen Kunden eventuell konfrontiert sind. Außerdem können personalisierte Marketingkampagnen potenziellen Kunden und Kundinnen ausgespielt werden und den Kundenstamm erweitern.

The role of reverse ETL in the modern data stack

Reverse ETL stellt einen elementaren Bestandteil für die adäquate Aufbereitung von Daten innerhalb des <a href="https://www.taod.de/services/data-engineering-consulting“ data-webtrackingID="blog_content_link" > Modern Data Stack </a> dar. Der Modern Data Stack ist ein vielschichtiges System aus modular aufgebauter Tools, welche die Daten eines Unternehmens von der Anbindung der Datenquellen über die Datenspeicherung bis hin zur Datenvisualisierung vollumfänglich verarbeiten. Dieses System folgt dem Prinzip, Daten entlang der digitalen Wertschöpfungskette zuverlässig herauszufiltern, um sie unternehmensstrategisch, skalierbar und performant nutzen zu können. Dabei verläuft das Data Management idealerweise nach folgendem Prinzip:

Step 1: Acquisition

As explained at the beginning, investing in a cloud data warehouse as a single source of truth is essential for modern and data-driven companies. This primarily serves as a central storage location for all data that originates from different sources.

Step 2: Preparation

Before the collected data can be used, it must be made usable for various systems. This is where reverse ETL pipelines come into play, closing gaps and integrating data from the data warehouse into target systems. Transformations and modeling prepare the data so that its format, values and properties are optimally prepared for analysis.

Step 3: Analysis

In order to fully exploit the value of the data, an analysis process including the creation of visualizations should be established. This makes it possible to derive insights, discover correlations and create forecasts.

Reverse ETL for agile data warehouse management

Ein bidirektionaler ETL-Ansatz ermöglicht es, Daten und die daraus gewonnen Erkenntnisse schneller im Unternehmen sowie in den täglich verwendeten Tools zu integrieren und bei Entscheidungstragenden zu platzieren. Demnach sind Reverse ETL Tools Schlüsselkomponenten des <a href="https://taod.de/whitepaper/whitepaper-modern-data-stack/“ data-webtrackingID="blog_content_link" > Modern Data Stack </a>, vermeiden die Entstehung von Datensilos im Data Warehouse, automatisieren manuelle Datenabfragen und steigern die Effizienz. Außerdem können aktualisierte Daten ein nahtloseres sowie personalisiertes Kundenerlebnis sicherstellen und demnach die Zufriedenheit von Kunden und Kundinnen steigern.

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