Data integration: Methods, tools, and benefits

The need for data integration in modernizing business operations

In the current era of big data, businesses are looking to unify data from across a wide variety of disparate applications, systems, and sources. This includes data generated through ERP and CRM systems, e-commerce and marketing automation platforms, social media channels, financial databases, and more. At the same time, the advent of cloud technology and the imminent need for digital transformation require many longstanding businesses to modernize by migrating their data to the cloud and modern applications.

Enabling businesses to deal with this challenge of migrating data and connecting various data sources, data integration has become an essential strategy for modern businesses to stay competitive and agile. It stands out from the different types of integration solutions as a means to consolidate data from various sources into a single, unified view, enabling organizations to make more informed decisions and boost operational efficiency.
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What is data integration?

Data integration is the process of combining data from disparate sources into a unified and consistent format. The integrated data can be stored in a data warehouse, data lake, or other centralized systems like an integration platform (iPaaS), facilitating better analysis and reporting. By consolidating data from various sources, inconsistencies can be identified and corrected, ensuring higher data quality.

The benefits of data integration

While data integration offers many advantages, some specific benefits set it apart from traditional data management approaches. Here are a few unique aspects to consider:

1. Seamless data sharing

Data integration breaks down data silos, making valuable information accessible across and within the organization. This boosts operational efficiency and fosters a culture of data-driven decision-making.

2. Data quality:

Data integration helps to identify and eliminate inconsistencies in data, leading to more accurate and reliable information. It ensures that the data is accurate, complete, and up-to-date, which is crucial for analytics.

3. Hidden insights:

Data integration allows you to analyze data points that were previously isolated. Combining data from disparate sources helps identify correlations and patterns that could result in breakthrough discoveries.

4. Simplified compliance:

Data integration can streamline compliance efforts by providing a centralized view of relevant data across departments. This makes it easier to generate reports and ensure adherence to regulations.

5. Enhanced data governance:

Data integration promotes better data governance by establishing clear ownership and data access. This strengthens data security and minimizes the risk of unauthorized access.
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The primary methods of data integration

Data integration methods vary based on business needs, data environments, and technological capabilities. Let’s explore the primary methods of data integration:

1. ETL (Extract, Transform, Load) & ELT (Extract, Load Transform)

ETL is a traditional data integration process that involves three key steps: extracting data from multiple source systems into a target system, transforming the extracted data into a format that’s suitable for the target system, and loading the transformed data into a data warehouse, data lake, integration platform, or any other target system.

On the other hand, the ELT method is a modern variation of ETL, wherein the extracted raw data from multiple sources is loaded directly into the target system, and the data transformation occurs within the target system itself, leveraging its processing power and features.  

The ETL method of data integration is ideal for traditional data warehousing, where data needs to be processed and transformed before being stored. Whereas, ELT is suitable for data lakes and cloud-based architectures, allowing for more flexibility and faster data processing.
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Read more about the different methods of integrating different data sources →
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2. Batch integration

Batch integration is a data integration method that involves processing data in large volumes at scheduled intervals, collecting and consolidating information over a set period before integrating it into the target system. By grouping data into batches, it allows businesses can optimize resource utilization and minimize system load during peak hours.

The batch integration approach is particularly effective for non-time-sensitive operations, such as end-of-day reporting, data migrations, and bulk data processing tasks.

3. Real-time data integration

Real-time data integration involves continuous data processing as soon as it is generated or received, providing businesses with the most current and accurate information at all times. Real-time integration supports agile decision-making, enhances customer experiences with timely and relevant interactions, and helps organizations respond swiftly to market changes and operational challenges.

This method is essential for applications that require immediate data updates, such as financial transactions, e-commerce platforms, and live analytics dashboards.
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Read more about real-time data integration vs batch data integration →
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4. Integrated EDI (Electronic Data Interchange)

EDI (Electronic Data Interchange) data integration is the process of automating the exchange of business documents between different systems and organizations in a standardized electronic format. This method allows for seamless communication of essential documents such as purchase orders, invoices, and shipping notices without the need for manual intervention. With integrated EDI, businesses can streamline operations, improve transaction speed, and foster stronger relationships with partners through reliable communication.

Integrated EDI is a data integration method that retailers can use to automatically send purchase orders to suppliers and receive electronic invoices in return, ensuring timely and accurate transactions. Similarly, it can help logistics companies exchange shipment information with partners, improving supply chain visibility.

However, it is important to note that since traditional ETL tools lack built-in EDI capabilities, modern businesses are not implementing next-gen middleware solutions like the iPaaS (integration Platform as a Service) that fully support the different EDI formats and enable integrated EDI.

Read more about how the iPaaS enables EDI and B2B integrations and real-time data exchange →
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What are the tools for data integration?

Data integration tools are software applications or platforms that provide the tools and space to extract and load integrated data within and propagate transformed data. There are several tools that enable these various methods of data integration, such as:

1. Manual data integration

Manual data integration is the process of manually collecting, transforming, and consolidating data from various sources using tools like spreadsheets or custom scripts. While it is flexible and can be tailored to specific tasks, manual integration is prone to errors, and not scalable for large volumes of data. It is best suited for small-scale or one-time integration tasks

2. Data warehousing

Data Warehousing involves consolidating data from multiple sources into a centralized repository, known as a data warehouse, which provides a unified view of the organization's data. It typically uses ETL to ensure data is cleaned, transformed, and loaded into the warehouse. Data warehouses support large-scale reporting and data mining, making them ideal for historical data analysis and business intelligence.

3. Data Virtualization

Data Virtualization is a data integration technology that provides real-time access to data across multiple sources without physically moving the data. It creates a virtual layer that allows users to retrieve and manipulate data as if it were in a single repository. Supporting on-demand data integration and enabling real-time data access, it enables quick data analysis, reduces data duplication, and lowers storage costs,

4. iPaaS (Integration Platform as a Service)

The iPaaS (Integration Platform as a Service) is a cloud-based, API-led integration solution that provides tools and services to connect different systems, applications, and data sources. While iPaaS solutions typically focus on application integration, advanced iPaaS solutions like the Alumio iPaaS provide data integration and ETL features. Such iPaaS solutions offer a range of pre-built connectors, APIs, and user-friendly interfaces to simplify the creation and management of data integrations, enabling real-time data exchange. They support various integration scenarios, from simple data transfers to complex, multi-step workflows.

Most importantly, iPaaS solutions like the Alumio iPaaS support a variety of essential formats such as JSON, XML, cXML, CSV, EDI, and more, and file systems such as FTP, AWS S3, Google Cloud Storage, and WebDAV, while connecting key API protocols like RestAPI, OData, GraphQL, and SOAP, greatly simplifying integrations.

Read more about application integration vs data integration →
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The future of data integration

From the various data integration tools we’ve explored, the iPaaS emerges as a robust and versatile solution. Incorporating the other methods and tools of data integration, it offers comprehensive features for data connectivity and supports both batch and real-time data integration. This includes support for various formats, filesystems, and API protocols that iPaaS solutions like Alumio provide.

Overall, efficient data integration is a cornerstone of modern business operations, providing enhanced decision-making capabilities, improved data quality, and increased efficiency. Thus, it is crucial to understand the different methods, tools, and benefits of data integration in order to be future-proof and to make data-driven decisions.