Technology / EXCLUSIVE: The open data revolution that’s transforming risk
EXCLUSIVE: The open data revolution that’s transforming risk
9 May 2016 |
Joanne Frearson talks to the Open Data Institute about how freely shared information is better for business.
Companies such as Thomson Reuters, Arup and Syngenta are using open data to help reduce risk, overcome challenges in business and gain a competitive edge, according a new report by the Open Data Institute (ODI) given exclusively to Business Reporter.
The report discovered these companies have adopted an open approach to keep pace with change, adapt to new markets and influence whole sectors. It found that being “open” has become crucial for overcoming challenges that many big businesses face.
Jeni Tennison, technical director at the ODI, says of the report: “The thing that struck me most about the case studies was that each organisation was taking a
really strategic approach to using and publishing open data, but also to openness in general.
“They were not just doing it for the sake of openness. It was because they saw a gap or an opportunity or a risk that they thought they would address by using openness.”
For example, she explains that Thomson Reuters is using data as a strategic approach in order to adapt to a changing publishing industry which has been moving towards a free model.
Thomson Reuters introduced PermID, a system which assigns a unique identifying number to each organisation and works as a reference for the company, so all that data about the firm gets linked to that one number. This adds value, Tennison explains.
While Arup’s open innovation approach has involved working with third parties that use open data, it has also enabled Arup to build services that are more flexible and agile because it allows them not to be confined into restrictive terms and conditions which traditional third-party suppliers can have.
“When you rely on a particular supplier of the data, often that means being locked into their products and services as well,” Tennison says. “This reduces your flexibility to move to better products and services that might be offered by other companies, perhaps because they are better suited to your needs, or cheaper.
“This reduces your agility and efficiency, and is therefore a risk to the business. Openness can reduce risk for companies by lowering lock-in to particular suppliers. When you rely on proprietary data, you are usually dependent on the single monopoly supplier of that data.
“If the company withdraws access to your licence for whatever reason, or the company folds, changes its focus, or decides you’re not a favoured customer any more, you can no longer use that data.
“The licence to use open data, on the other hand, can never be revoked – you can always use whatever data you have. This reduces your risk and dependency on the organisation which is providing that data.”
Elsewhere, Syngenta had been facing long-term challenges about the sustainability of food supply. The agricultural company started publishing open data in order to address these issues.
Tennison says: “For Syngenta, it’s not so much about being competitive, but more about the sector as a whole facing some very big challenges around agricultural production and food sustainability. The only way Syngenta can contribute to these challenges is if it is open, transparent and collaborative.”
According to Tennison, companies are using openness to stay competitive with regards to market changes and to collaborate with their partners in order to build some common data assets and develop standards for a sector.
For example, the Open Banking Working Group was set up in September 2015 to explore how data could be used to help people transact, save, borrow, lend and invest their money. It is recommending the creation of an open banking standard to help improve people’s banking experience.
Companies using open data can reduce their costs, not just in paying for licences for data, but the overhead cost of negotiation when getting hold of data.
“Negotiation can take a long time,” she says. “Figuring out what the licence is, figuring out what you can do with it. With open data these costs just disappear – you can do anything with it. It makes using data more efficient and reduces friction.
“Data is becoming infrastructure for our economy in the same way that roads provide our core transport infrastructure. As a modern business, you need to be using data in
order to make informed business decisions. Open data is an important part of that data infrastructure.
“Using data to make a decision is like travelling on a series of roads. To get from point A to point B without open data is like stopping at toll booths at each road junction.
“Some journeys you just wouldn’t want to make because they are too much of a pain. So some decisions you will not be able to make because that data is too difficult to access.
“In other cases, decisions will be much more expensive. If we do not have open information then we become a lot less informed and we make less-informed decisions, and therefore worse decisions.”
As the ODI report shows, companies that use open data are helping to reduce risk, overcome challenges and build products which give them more flexibility and make them more agile. Using open data is providing them with a competitive edge.
To view the main report, see the ODI’s website.