Reverse ETL solutions extract information from a data warehouse and load it into business applications.
While Reverse ETL tools are not truly reversing the ETL process, they have been named as such because they offer mirrored capabilities to traditional ETL (extract, transform, load) tools that extract information from business applications and load it into warehouses.
What business value does a Reverse ETL tool provide?
Reverse ETL tools package data from the warehouse and sync it into business applications. They convert warehouses that were previously used solely for dashboards into environments that power process automation as well.
This unlocks value because companies historically managed data in two siloed pipelines:
- A data pipeline for analytics - where data was delivered to a warehouse and turned into dashboards.
- A data pipeline for automation - where applications were connected directly to each other for the purposes of automating repetitive tasks.
Until recently, the data pipeline for analytics was not fast enough, or well-connected enough to power automation, so it was solely used for dashboards. This has changed with the advent of cloud data warehouses, ELT solutions, and now Reverse ETL. Today, companies can connect to systems across the enterprise, load information into their warehouse, and transform the data, all in near-real time. By completing the cycle, and empowering teams to push this data back into business applications, Reverse ETL solutions enable teams to tap into their warehouse to power operational workflows.
What is the alternative to a Reverse ETL solution?
Before Reverse ETL solutions, teams would sync data into business applications in one of two ways:
- Skip the warehouse, and sync data directly from system to system using an automation tool like an integration platform as a service (iPaaS) solution, or
- Write scripts that export data from the warehouse, package it for delivery and sync it into downstream business applications using in-house developer resources.
Relative to warehouse centric process automation using Reverse ETL, leveraging an automation tool and directly connecting applications causes operational tools to very rapidly become out of sync with the information in the data warehouse. Dashboards don’t show the same answers as business applications and users end up with two parallel pipelines that display different information.
Automation tools also couple process automation logic with the business applications in use by the company at any given point in time. You can read more about how this restricts company agility in our article on Warehouse Centric Process Automation.
Who uses a Reverse ETL tool?
Early in the lifecycle of a company, Reverse ETL tools are managed by the same individual, or team that manages the data warehouse. This is especially the case when automation tools are not yet common for workflows across the business, and workflows can be automated using a Reverse ETL tool without needing to rip and replace an existing solution.
For mature businesses, where an iPaaS solution already exists, different teams can already be in place to manage process automation and analytics separately. Politics are involved in merging responsibilities; therefore, collapsing the two data pipelines is more complex. In the long term, we expect most enterprises to centralize the two functions into a single team and tech stack.
Another key stakeholder for Reverse ETL solutions is the marketing organization. Workflows that were previously automated by the marketing operations team, are being consumed and automated using Reverse ETL. Teams that would otherwise use a customer data platform (CDP) or marketing automation tool as a way to sync data between systems, are now faced with a decision of whether to instead leverage a Reverse ETL tool. For marketers, this removes the burden of managing system operations, and allows marketers to tap into data from across the entire customer journey.
What systems can Reverse ETL tools deliver data to?
Many Reverse ETL tools focus purely on syncing customer data into customer relationship management (CRM) tools, email service providers (ESPs), support and ticketing systems, and other customer engagement platforms. However, from a technical perspective, there is no reason Reverse ETL technology cannot power automation across the entire enterprise.
Over time, we expect ELT tools and Reverse ETL solutions to connect to thousands of systems across the entire enterprise, unlocking automation of complex workflows as well as the simplest of tasks.
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