Is open data suitable for the enterprise?

Very few enterprises have begun to recognise the benefits of consuming open data; still fewer see a reason to make their own data freely available. While the advantages of open data may be clear in the public sector, the risks still outweigh the advantages in the private sector. [See also: What every UK CIO should do about Open Data]

Governments in developed countries have been working hard to make public data freely available for consumption by the private sector. The United States, the UK, and Germany have led the pack so far. But France is coming on strong after having appointed a national chief data officer 18 months ago. France's first CDO Henri Verdier reckons his efforts are starting to stimulate competition in the private sector by providing equal access to public data, and by reducing the costs enterprises would otherwise incur in producing or gathering the data themselves.

But open data isn't just coming from government agencies. Independent research firms are also busy publishing information - everything from the Great British Toilet Map to OpenOil Search, which provides disclosures from businesses in the oil, gas, and mining industries.

Whether from government agencies or independent organisations, the amount of open data already available is mind-boggling. According to analyst firm Gartner, over 10 million datasets have already been published around the world.

But let's not forget that quantity does not imply quality. As the Open Data Institute itself points out, "Companies face several challenges when using open data. Data is not always accurate, up-to-date or accessible in machine-readable formats. Its licensing does not always allow for commercial use and it often cannot easily be traced back to where it came from."

Granted, not all datasets are dubious; and some private organisations have used this fact to their advantage. Some businesses are using a combination of public data and commercial data for humanitarian purposes, mindful of the fact that a well-publicised good deed always contributes to a positive corporate image.

For example, IBM applied cutting-edge data science techniques to a combination of government and commercial data to model the Ebola epidemic in West Africa. By making predictions about the spread of the disease, the computer giant was able to help target relief efforts.

A few organisations in the private sector are consuming open data for direct business benefit. For example, Tesco combines weather information from the Met Office and other open sources with sales records from thousands of stores to create hour-by-hour demand models.

Aside from IBM and Tesco, so far, very few large enterprises are using any of the 10 million datasets Gartner says are available. The real consumers of open data are small, niche players developing services for specific use cases: Parkopedia uses open geospatial data to help users find parking, uses an open database to provide information about musicians, and Timetric uses worldwide macroeconomic data to spot investment opportunities for clients.

So far enterprises are only finding marginal benefits from consuming publicly available information. It's even more difficult to see why a for-profit organisation would want to publicise any of the data they produce or gather themselves. First, giving away data means reducing competitors' costs of collecting the data themselves. Second, much of a corporation's information includes insights into company strategy and operations. Finally, businesses are loath to giving away anything about their customer base – both for competitive reasons and for fear of violating laws around data privacy.

Nevertheless, some enterprises have found reasons to publish their own data. In most cases, though, the data is only available to a closed ecosystem. For example, Schiphol Airport has opened data to the developer community so software houses can design innovative mobile apps that benefit passengers and airport retailers. Another example can be found in the pharmaceutical industry, where several companies have opened up with data from clinical trials for the selfish reason of showing that they have no secrets to hide - and for the ostensibly unselfish reason of promoting the discovery of new medicines.

Companies in an industry might also expose data through a broker using a standard API that hides the peculiarities of their internal systems. For example, "The Open Bank Project" provides a platform that allows banks to make data available to developers through connectors.

The advantages are also clear when several businesses use the same resources and can benefit from sharing information on those resources. In some cases, a third party service provider offers a platform that allows companies to share information. For example, Demand Logic provides such a platform for companies to share their energy consumption data. Demand Logic analyses the collective dataset for trends and provides feedback on how the businesses can save energy.

When it comes to consuming or publishing open data, most IT directors are proceeding with caution. Telefónica group CIO Phil Jordan says: "It's easy to agree that conceptually there are exciting opportunities and innovation to be fostered by both the public and private sectors. Data and insight are among the few sustainable and future differentiators in the telco sector. We will differentiate by providing our customers new value and digital experiences with their data, where they want it and when they want it. In that journey, enriching experiences with open data feels inevitable but we need data standards to emerge before adoption will move open data along the maturity curve."


Copyright © 2016 IDG Communications, Inc.

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