What Is Reverse ETL & Do You Actually Need It?

Discover if a reverse ETL tool is right for your company.

Sandy Mangat

May 10, 2022

What Is Reverse ETL & Do You Actually Need It?

Congratulations! You made a great choice by storing all of your valuable company data in a data warehouse. All that is left is to figure out how to access all of that data at your convenience.

Keep reading to discover how reverse ETL helps companies easily pipe data from their data warehouse to their operational tools.

First Things First: What Is Reverse ETL?

ETL (extract, transform, and load) is something we’ve done since the beginning of time – Moving data from different silos into one place (a data warehouse) where that data can live (at a low cost) and be accessible. Reverse ETL is the exact opposite.

Reverse ETL copies data stored in a data warehouse (DWH) and distributes it to SaaS tools or other operational systems.

Why do you need to move data from the DWH to SaaS tools?

SaaS tools like Slack and Intercom rely on data to work, and you rely on SaaS tools to automate and simplify various aspects of running your organization. Instead of manually retrieving data from a DWH to power your SaaS tools or writing your own custom integrations between tools, you can use reverse ETL to simplify and speed up the process.

How is Reverse ETL different from ETL/ELT?

To help you understand the difference between ELT, ETL, and reverse ETL, below are simple definitions of each system:

ETL tools gather data from multiple sources and send the data to a DWH for storage.
Reverse ETL does the opposite by retrieving data from a DWH before sending it to SaaS tools and other operational systems.
ELT tools perform the same function as ETL but follow a different process. While ETL extracts, transforms, and loads data to a data warehouse, ELT extracts and loads data (with tools like Airbyte and Fivetran) to a DWH for storage before transforming (with tools like dbt) it.

You can use ETL or ELT to retrieve data from SaaS tools to store in a data warehouse. You can then use reverse ETL to retrieve specific data from your DWH and send the data to a SaaS tool or another operating system.

Modern teams prefer ELT because it allows you to send large amounts of data to your data warehouse without worrying about first cleansing and transforming. The Pocus community and customers prefer using best-in-class tools like dbt to transform data once in the data warehouse.

How Does Reverse ETL Work?

Reverse ETL tools create maps that allow you to point at data in a DWH and then map that data to a field in a third-party tool like your marketing automation or CRM. This is different from ETL, which moves all data to a single location. With reverse ETL, you can specify data and tell it where to go, and the system will use the data to update specified fields in your third-party tool.

For years data teams have spent tons of time building their own connectors between the data warehouse and their SaaS tools. These API integrations can be difficult to build and maintain. As we've written before, it's usually (in most cases) not the best use of your team's time to build these data pipelines. Instead, teams can now use tools like Hightouch and Census to handle all their reverse ETL needs. Both products have integrations with the most popular third-party tools.

Why Do I Need Reverse ETL?

Integrating reverse ETL with your data stack will allow you to:

Simplify Data Retrieval

Without reverse ETL, accessing warehoused data would require technical skills that your team may not possess. Even if they possess it, manually using SQL to access data from a DWH can be time-consuming.

Maintain an SSOT

Lastly, your data warehouse is your single source of truth – a place where you can find all your company data collected from various sources. Having a single source of truth (SSOT) ensures that your teams can function and make decisions based on consistent and reliable data. Pairing reverse ETL with your SSOT will guarantee that every team member has access to consistent data, regardless of which SaaS tool they use.

Who Should Consider a Reverse ETL Tool?

Purchasing a reverse ETL tool will be a waste if your company does not actually need one. So, before investing in a reverse ETL tool, verify that your organization needs one by checking the following:

Company/Data Maturity: Data mature companies are organizations that can analyze and fully take advantage of acquired data. The more mature a company is, the better it will be at leveraging opportunities and managing threats. If your company lacks data maturity, you can put off getting a reverse ETL tool for the time being.
Data Warehouse: Do you own a data warehouse? If so, you will need a hassle-free way to retrieve and use the data stored in your warehouse. A reverse ETL tool is an efficient solution in such a circumstance.
Good Data: Having a data warehouse does not automatically imply that your repository contains quality data. If your data warehouse currently contains unusable or valueless data, you should work on getting better data before proceeding with installing reverse ETL.
Recent Data Warehouse Modifications: Did you recently upgrade your data warehouse or execute other changes that made your DWH incompatible with your current reverse ETL? If so, switching to a more compatible reverse ETL tool is advisable.

If one or more of these factors are in play in your organization, a reverse ETL tool can boost your data management and optimize the usage of your data stacks.

What Factors Should a Company Consider When Choosing a Reverse ETL Tool?

A reverse ETL tool can be a valuable investment, but that’s if you select the right reverse ETL tool for your company’s needs. To pick the best reverse ETL tool, you need to consider several factors, such as cost. We don’t recommend going for the cheapest or priciest reverse ETL tool. Instead, go for one that offers the most attractive price without compromising on the features you need.

Data security is another essential factor to consider. Why? A reverse ETL can access your data warehouse, which contains customer data and other sensitive information.

Threats can piggyback on the tool to access your data warehouse and steal or compromise data if a reverse ETL has security flaws. For this reason, only go for a reverse ETL that has powerful data encryption and other security features.

Other factors to consider when looking for the best reverse ETL tool are:

Alerts

We strongly recommend choosing a reverse ETL tool that provides alerts or notifications when there is an error, bug, or other problem. Otherwise, it could take days to realize something is wrong. If your teams continue retrieving data with a faulty reverse ETL, they could end up with inconsistent data that leads them to make costly mistakes.

However, it’s not enough for a reverse ETL to alert you when something is wrong. The system should also specify the problem and, if possible, recommend solutions.

Debug Ability

A user-friendly reverse ETL will be easy to troubleshoot and debug when something goes wrong. If your reverse ETL is easy to fix, your organization can avoid prolonged downtimes when something goes wrong.

A hassle-free debug ability will also help you avoid the high cost of calling a technical expert to rectify issues. Just as important, choose a reverse ETL with reliable customer support that you can quickly contact when issues arise. Customer support should be reachable via your preferred communication channel (phone, live chat, or email).

Extensibility

Before buying a reverse ETL, perform a test run to verify that it can integrate with your existing data stack and SaaS tools. For example, just because a reverse ETL tool can integrate with Salesforce does not guarantee it can integrate with alternatives like HubSpot or Zoho.

Go for the reverse ETL that can work with the infrastructure you already have in place. Besides your existing SaaS or CRM tools, a reverse ETL should be able to integrate with any other tools your company might use in the foreseeable future.

Usability Case

If you want a reverse ETL that teams across your company can use, go for an easily operated one that requires zero technical skills. Even if the tool will be accessible by only your genius technical team, it makes everyone’s life easier if a reverse ETL is user-friendly.

Also, if you intend on giving several people access to the reverse ETL, choose a product that can support all your intended users. However, note that the cost of using a reverse ETL may rise with the number of users.

What Is the Future of Reverse ETL?

With more organizations relying on SaaS tools and switching to data warehousing as a single source of truth, you can expect reverse ETL to grow in popularity. Data teams don't want or need to spend their valuable time building pipelines between their tools. We expect more teams to adopt reverse ETL to improve their data infrastructure and operations.