Understanding Data Federation

Data plays a foundational role in most modern businesses. This is especially true in data-heavy industries such as insurance, where having comprehensive, accurate data is the single most important aspect of efficiently examining and processing claims. But because of the nature of modern workflows, important data often comes from a variety of separate sources. That’s why data federation is essential to ensuring that your company can access and use the data needed for everyday operations.  

What Is Data Federation? 

Data federation is the process of integrating data from multiple sources within a single system. In practice, this allows multiple data streams to function as a single, cohesive database. This system ensures that the information you’re looking for is available wherever you need it. Similarly, changes made to files in one database will be reflected in others, guaranteeing that everyone working in the system has the same information in front of them. This can be accomplished using either an out-of-the-box software tool or a fully customized business solution

Different data federation systems can be configured to meet the needs of the company using them. Specific databases, types of information, and other resources can be synchronized strategically rather than simply integrating all data from all systems at once. Likewise, some automated processes for data federation can be set to work regularly, while others can retain manual controls where needed. 

The Role of Data Federation in Business

Having accurate, up-to-date information is crucial to many essential business processes. Access to pertinent data allows your company to make timely, informed decisions and maintain an edge against slower competitors. On the flip side, when data is not accurate and updated, you can spend precious time attempting to find what you need, and end up making less productive decisions. Not only does this erase any advantages that collecting data may have afforded you, but decisions made based on faulty information can lead you to costly legal and compliance issues. 

One of the most common sources of incorrect or incomplete information in business is data silos. Data silos occur when different departments or workers collect information independently in their own databases without a system to make that information available to users in other departments or areas. While efforts to maintain data may be painstaking, when data is inaccessible to those who need it, the work of gathering and storing it is for naught. 

Data federation directly addresses problems like data silos while retaining preexisting individual databases. Data federation systems collect and distribute data between all federated sources. This eliminates the potential for data silos without necessitating the use of a single system across all teams.

In many organizations, having all departments store data in the same locations is not feasible. Some essential business programs may not be compatible with others, or organizations may manage a large number of employees across multiple locations. Likewise, privacy concerns mean that not all employees can be allowed to access databases from other departments. Data federation allows necessary information to be synchronized between departments as if they were one, while allowing the sources to remain separate. 

Data Federation vs. Aggregation

While the need for data management is clear, it can be difficult to differentiate between the various forms of data integration. One of the most common forms is aggregation or consolidation, which, on the surface, can appear indistinguishable from data federation. 

While both systems make it possible to view data from multiple sources in a single location, how this is done is not the same. In data aggregation systems, data from each source is collected and stored in a separate, “master” database. In data federation, on the other hand, semi-independent databases are federated under an umbrella system, allowing them to be interacted with as if they were a single, cohesive data store. 

While these differences may seem subtle, in the complex world of information management technology, these functional distinctions are worth considering. Each system has unique strengths, allowing organizations to choose the most suitable option for their business. 

Unifying Information with Populus 

Regardless of which form of data integration is for you, implementing the best program is crucial. The most effective and useful of these systems utilize automation rather than sticking with slow, inefficient manual consolidation. Thanks to the rise of automation, computer programs can take over essential but time-consuming processes such as data federation and integration. 

Automated data integration and aggregation tools are available in the form of premade,  off-the-shelf applications or as fully customized business solutions. Leaders in every industry are increasingly looking to automation to solve common data management problems. This is especially true in sectors where outdated “legacy systems” dominate the industry, setting those who adopt newer, more efficient solutions firmly ahead of the competition. 

Whichever tools your business chooses, finding the right data integration strategy means finding the right data management partner. While many companies rely on outdated systems for managing their data, these systems are often inefficient and inaccurate. Taking the step to automated data integration or federation can transform an organization, saving time and money and avoiding costly errors from incomplete data. 

When done correctly, data federation can provide businesses with a unified, definitive picture of their customers, operations, and performance. This has wide-reaching impacts on pivotal areas like customer service, marketing, and decision-making. If you’re interested in data federation for your business, Populus can help.

Populus Technology offers various services, from data integration and analytics to fully customized applications to manage your business processes. Experienced in providing technology solutions, we help support growth by managing partnerships and directing our clients to the best third-party vendors in the industry. We also assist organizations in updating and automating their business processes, even creating custom software solutions for unique workflows.

If you need help transforming your organization’s data processes, Populus has the solutions you need. Contact our team to learn more!

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