If your data is subject to frequent revision in another application and the exported data from that app is a flat file, it may indeed be easier to manage as a flat file.
If you want to import from a flat file into related tables, you need to develop some way to manage the relational key fields that link your different related tables and that can be a real challenge. You might, for example, import the data into a temporary table and then use scripts to analyze the data to match the imported data to records in related tables and update them if they differ. That can be a lot of work to set up, but once you get it up and running, it'd work pretty smoothly for you. Since this is contact data, you might find you are matching records by a company or person's name. That can be tricky as names change nor are they always unique.