The recent global fixation on Chat GPT, the more than 40 serious data breaches in Australia at the end of last year, and the ongoing rollout of Consumer Data Right across industries, has made data the topic of many dinner table conversations. And the main theme is fear.
Yet it shouldn’t be. Data is powerful, useful, and key to us unlocking the answers to complex issues. At Ignite, we have, and always will, treat data as a liquid asset. An intrinsically valuable resource for organisations is to:
- create value through identifying and streamlining business efficiencies;
- create value through developing and bringing new products or solutions to market; and now
- create value through expanding the organisation’s business eco-system and impact through data sharing.
In a piece published in the MIT Sloan Review last month, Barbara Wixom and her co-authors presented their concept of strategic data sharing, a way for organisations to create value through the sharing of data for specific opportunities with specific partners, quickly. In that, they identified four key practices that can help organisations establish a valuable data sharing capability:
- INVEST in data management practices.
To identify strategic data assets and then make them usable (while compliantly protecting and anonymising personal data), readily available and combinable. - REDUCE friction between data sharers.
Through building and implementing flexible controls, well designed service platforms, and moving to an automated, repeatable sharing control process. - ENABLE trust and collaboration with partners.
Through establishing fair policies and processes with a focus on a win-win outcome. - PROACTIVE management of data sharing innovation projects
They treat these projects as more than just another data project, rather a value realization and they assign the right resources and managerial attention.
Adding the 5th C – ensuring a liquid asset
In the business-to-consumer (B2C) world, we ask organisations to consider the 4Cs:
- Collect the data
- Connect the dots
- Curate meaningful insights
- Consume insights for action
Today, the B2C world is evolving to B2C2B (business-to-consumer-to- business). And we are adding a 5th ‘C’ – COMMERCIALISE. This relates specifically to Wixom and her team’s work on turning data into a liquid asset.
How do the C’s work?
- Collect: LinkedIn collects data from individual consumers by engaging them in network effects.
- Connect: Microsoft connects the dots of individuals.
- Curate: creating meaningful insights and presenting people, to;
- Consume: connect with other individuals, apply for jobs, and make it easy to do so with single-click mentality.
- Commercialise: aggregate the insights into premium services, advertising, Sales Navigator and other services.
Data property rights
A strategic data sharing model eliminates the philosophical question of who owns the data between two organisations seeking to create value from their analysis pool. But there is a third party often taken for granted – the data provider.
Property rights are like a fair exchange. We will trade our personal data when we perceive value in the return. The issues come when a company takes our data, and creates additional value that only they benefit from, not us. The inherent unfairness of this is irritating; the frustration described in the many, many memes out there of certain social media founders.
With all the heightened awareness of how consumer data is being used, and continued breaches of that data, will there soon be a claw back from the providers – aka ‘us’?
The opportunity here, though a strategic sharing model, is to treat data ownership equally, providing an equitable tradeoff for those providing the data, improving the data’s liquidity, verifiability, and quality:
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- INVEST in data collection practices.
Don’t collect data for data’s sake. Specify the reason, educate the provider, and anonymise any personal data required. - REDUCE friction between you and data providers.
Reward providers. Allow providers to opt in. Reduce fees, provide exclusive access, or prioritise those that have provided you their data for one purpose, and you would like to use it for another. - ENABLE trust and collaboration with providers.
By empowering providers to opt-in, to delete, access and move it; before its even mandated. Be open and transparent when describing what you intend to do with their data, or when repurposing data previously collected. - PROACTIVE communication of data sharing innovation projects
Help providers to understand the equitable value being derived from the use of their data. Treat the project as all encompassing – to get value for the business, the data providers must receive value too – reminding the business that collaboration creates innovation.
- INVEST in data collection practices.
By maintaining the data exchange relationship with consumers, businesses can then work with other partners to derive further value, bettering outcomes for them and their customers, a la, ‘Customer 360’.
Real Examples
Barbara Wixom and her co-authors shared some excellent use cases of successful Data Sharing programs. From 2019 to 2021, they interviewed 34 leaders from 30 companies across a range of industries.
Schneider Electric
- Schneider Electric shares its data with business customers to deliver energy management solutions.
- In 2016, their leaders identified that they could develop new services based on analysis of connected assets within their platform.
- They built a tool to collect structured and unstructured data from assets in use on customer sites.
- This tool actively detects operating risks and enables facility managers to manage the assets themselves or rely on a Schneider Electric service.
- An example cited was that Schneider Electric helped Hilton Hotels realise a 14.5% saving in energy since 2009, providing both cost and emissions reductions.
- By 2021, Schneider Electric’s EcoStruxure IT Platform (incorporating software controls, connected products and services) generated more than 50% of the company’s total revenue.
Elevance Health
- Elevance Health shares data with academics, researchers, and other data partners.
- In 2019, their team took 12 years of various data from over 45 million individuals.
- By 2021, they had brought in more than 50 vetted partners, 600 developers and researchers generating over 30 projects.
- They brought an average of five projects into production each year from 2019 through to 2021.
The introduction of CDR (Consumer Data Right) into Australia in the utilities space is creating a big opportunity for organisations to re-think how they approach data. Whether they look at implementing CDR as a simple compliance concern, or if they strategically re-think their approach to data and start to look at it as a liquid asset like Schneider Electric and Elevance Health have done. Either way, we can help, particularly the latter.