Is it in a company’s interests to make some of its data freely available to outsiders? A few years ago the question would have been dismissed by most business leaders, but the rising profile of the open data campaign is now prompting an increasing number to take the question seriously.
So far the open data evangelists have made most progress in the public sector. The government has made a virtue of making data available for re-use, and there are now almost 17,000 datasets available on the data.gov.uk website.
There is a clear rationale for this: let other people get at the data to develop the specialised services for which you don’t have resources, like those mobile apps that keep users up to date with how buses are trains are running. Also, the data comes from organisations funded by the taxpayer.
But traditionally it’s different for business: it’s more conscious of the commercial value of data and worried about diluting it by opening it up for anyone to see and use. This raises the question of whether there is a solid business case for a change in attitude.
Unsurprisingly, the Open Data Institute, set up in 2012 with the support of the government’s Technology Strategy Board, has emerged as a champion of the cause. Its commercial director, Stuart Coleman, argues that there are instances in which making its data easily and freely available can provide a boost for a company.
“You have a huge supply (of data) coming from government, but we’re also starting to see businesses look to release some of their data openly,” he says.” We’re not by any means of the view that it’s right for every single business and every piece of data, but there are increasingly more use cases.”
He cites the example of Show Me the Money (http://smtm.labs.theodi.org/), an ODI project that brings together data from the three largest peer-to-peer lending platforms in the UK – Zopa, RateSetter and Funding Circle. It has led to the creation of an interactive infographic that shows how much money was lent between October 2010 and May 2013, the numbers of lenders and recipients, average and median sums and a map of which parts of the country the money came from and went to. It also provided the data for a written report on the industry (http://smtm.labs.theodi.org/ODI-P2P-report-16jul13.pdf).
Rhydian Lewis, CEO of RateSetter, says the nature of its business makes open data an attractive proposition. Peer-to-peer lending involves the companies bringing individual lenders and borrowers together, for which they charge a fee, and transparency is regarded as an asset. The company’s website provides trends in interest rates and plenty of other details about transactions through the platform.
“We’re an exchange, just providing the marketplace, so for us the more transparency and data available the more people will trust and want to use our exchange,” Lewis says. “If you look at something like the stock market, the more information available the more people participate.
“With our online platform we’re able to make information available in a digestible way that the banking system wouldn’t put out to the public. By publishing the data we’re showing the public interest and default rates, and by embracing that transparency people have confidence in what we do.”
Lewis says that this builds trust among the lenders and borrowers. An important element of this is the data that is not made open – the personal details of the lenders and borrowers – and both he and Coleman emphasise that open data should not involve any violations of privacy.
The process also raises awareness of what the peer-to-peer platforms are doing.
“We are trying to open it up to have tens or hundreds of thousands of people involved in the process, and for that you have to give everybody access to information,” Lewis says. “The more information is out there the more it will encourage participation.”
Such factors can be seen in a clutch of start-ups in which transparency is central to their business model, but most businesses tend to think differently, and so far few have shown much enthusiasm for open data.
The barriers are easy to guess: worries about commercial confidentiality and privacy; sometimes a lack of understanding about the value potential in data; and when companies are aware of the value they often believe it comes through keeping it to themselves, and that they are the only ones who know how to use it productively.
But according to Harvey Lewis, research director for Deloitte Analytics – who is also involved in its internal projects on social innovation – there is a growing interest. He sees this largely through the company’s work with clients on opening up data and crowdsourcing to find solutions to problems, and identifies a number of drivers.
One is that consumers are increasingly expecting more transparency and a greater concern with social responsibility, and this is encouraging some companies to make their data on sustainability and supply chains available. There are examples in sports clothing manufacturers Nike, Puma and Adidas.
Another is where organisations share a common risk. “For example, UK insurers have been sharing data for a number of years to combat organised fraud, and pharmaceutical companies are starting to release data on the uses of their drugs, so the cost of drug discovery is going down,” he says. “Where there is a shared pain or risk there is a business case for organisations to share their data.
“There are others around data asymmetry. Organisations are dedicated to collecting data around one narrow avenue are looking to collaborate with organisations collecting other types of data, so collectively they can build a very different proposition. We are seeing that in particular in the mobile telecoms space.”
This relates to the development of mobile apps by outsiders using data from an organisation to give the public more information. The commercial incentive is in making it easier for people to get information on the product or service and more likely to spend money on it.