Data Sharing: Next Frontier or Fool’s Errand?
Talk of data sharing is growing, as organizations look beyond internal datasets towards leveraging external data to improve their market reach, address unique challenges, or to further optimize their business.
Just weeks ago, the European Union (EU) Parliament and Council reached an agreement on the new Data Governance Act (DGA) which lays out a framework for sharing industrial data across the bloc. Specifically, it defines the rules for trading data and provides a mechanism for reusing public sector data.
Speaking to the media, leading negotiator Angelika Niebler shared that the goal of the DGA is to set a foundation for a fair data economy that the people and businesses can trust. As data sharing flourishes, the hope is that it will stimulate new business models and spur social innovation.
The agreement is currently subject to final approval by the European Parliament and the Council of the EU.
Setting up data exchanges
While the EU is focused on getting the legislation right first, China has already gone ahead by setting up the mechanism for commercial data sharing.
Last month, the Shanghai Data Exchange went live with an initial offering of 20 data products offered for trading. An initial batch of 100 enterprises signed up as data merchants. The Exchange will incorporate services such as data compliance consultation, quality assessment, and asset valuation.
This isn’t a Laissez-faire exchange of data though – there are guidelines in place for the proper use of data. For example, a new trading system ensures that a transaction will not be conducted if the data purchaser cannot explain the exact scenario in which the data will be used.
One also presumes that the additional layer of data protection will see more organizations join, instead of fizzling out like earlier data exchanges in China.
Data sharing initiatives are not limited to governments, however. Last year, cloud data warehousing firm Snowflake unveiled its Data Cloud ecosystem for Snowflake users to share and exchange data.
Speaking separately at a physical roundtable event held in September, Geoff Soon, managing director of South Asia at Snowflake briefly highlighted its advantages: “[With Data Cloud] we are leveraging the network effect [in the cloud] to allow our customers to seamlessly and securely share data with each other.”
Challenges to overcome
Though data sharing sounds enticing, there remain significant issues to be overcome. Apart from the legal hurdles and ensuring adequate protection of end-user data, data sharing presupposes the availability of good quality data – which isn’t necessarily true for many organizations.
Moreover, there is the issue of abuse, stemming from the fact that data isn’t a physical item that can be recovered once shared. Even internally within organizations, departments or users are known to hang on to data beyond their immediate use, so what more when data is shared with external entities?
Organizations could also be concerned about competitors gaining an unfair advantage through access to some of these data. Addressing this concern calls for a complex analysis that necessitates the balancing of multiple elements such as business objectives, measurable benefits, and operationalizing the actual sharing of data to reduce overheads and prevent oversharing.
Benefits of sharing data
But what are the advantages of data sharing?
For a start, businesses can collaborate using data to develop new technologies, insights, and capabilities that they would otherwise be unable to solve. One interesting possibility is a hackathon, where external data scientists given access to the data are tasked to work on problems defined by industry problem owners for a fixed period of, say, a week.
Supply chain optimization is a prime candidate for business optimization. By launching a data-sharing platform that is utilized by supply chain partners, Airbus was able to increase supply chain efficiency – design processes that used to take weeks were reduced to a matter of hours.
Finally, the availability of trusted data makes it easier to benchmark organizations and address sector-specific challenges. This might range from improving safety within specific industries to ensuring adequate capacity on the national grid as nations transit towards renewable energy.
We are at the very start of the data-sharing journey, and there remain significant hurdles to be overcome. But enough businesses and governments are seeing a benefit and are making a move towards establishing the groundwork for sustainable data sharing.
Paul Mah is the editor of DSAITrends. A former system administrator, programmer, and IT lecturer, he enjoys writing both code and prose. You can reach him at [email protected].
Image credit: iStockphoto/Mizina
