5 min read
Although the pandemic has turned us into remote work experts, we still face some challenges regarding digital processes. For example, we don't always share data in the most efficient way. However, in the age of Big Data and artificial intelligence (AI), information is more important to businesses than ever. The desire for more productive collaboration, straightforward data sharing, and competitive pressures are driving a trend toward transformation.
- What is data sharing and what is it used for?
- Data sharing drivers
- Why companies should share their data (more often)
- Challenges of data sharing
- How can a data culture look like?
Read in this blog article, how data sharing can change the way companies work and create value, what the benefits of transformation there are, what obstacles a company may need to overcome, and what has been holding them back from sharing their data, and how things are changing (and will change).
Sharing is important, in business just as in private life. Nowadays, sharing has garnered even more attention, due to new business models for the sharing economy.
What is data sharing and what is it used for?
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Basically, data sharing is nothing new. It already happens when you send an email to colleagues. Data can be shared via a link, a document, or just as the text in your message.
We usually share data to inform someone, to discuss something or to collaborate on something.
In the B2B context, data sharing refers to making data available to other companies or to retrieve external data for business purposes. It can take various forms which range from unilateral to cooperative data reuse and can, for example, be used free of charge, through a service or for a fee. What proportion of the data is shared and with whom depends on the corporate strategy and thus on the company.
Above all, companies share data with each other to increase internal efficiency and improve their business opportunities. Data is most commonly being reused and shared today through the Internet of Things (54%) and internal IT business systems (56%) (European Commission).
Aside from a company's website, online as well as online data archives/protocols, especially application programming interfaces (APIs) are preferred as a technical means for data sharing. In simple terms, APIs allow two software programs to communicate with each other.
Data sharing drivers
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Driven by digital technologies, B2B data sharing is becoming more attractive and leads to more frequent use.
According to a study by the European Commission (via Bennett Institute; PDF), the biggest motivational drivers for B2B data sharing are:
- potential for new business models, products and services (74%),
- prospect of new partnerships (48%),
- revenue from data sold (40%),
- legal requirements (26%)
- economic incentives (8%)
Find out how food producer Ospelt gained a 360 view on its customers for mobile use and for all sales processes.
Why companies should share their data (more often)
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With changing customer expectations and an increasingly data-focused world, the pressure is on for organizations to generate and use more data. Despite its early stages, the data sharing trend is gaining momentum, as reflected in the growing interest of various consulting firms and studies including the outlook on the consequences for companies who either apply or ignore data sharing.
For example, Forrester Research found that more than 70% of global data and analytics decision makers are expanding their external data use capabilities. Another 17% plan to do the same over the course of a year. Deloitte also predicts that more companies will look at data sharing in the future as a way to monetize their own data and achieve their business goals with the help of external information resources.
In its report, the Bennett Institute cites another European Commission study that found evidence that business opportunities may be missed if companies don't invest in the further use of data and therefore miss out on real-time and/or localization data.
In addition, Gartner predicts that data and analytics leaders that share data externally are three times more likely to realize measurable business benefits.
All in all, there seem to be sufficient business-driven arguments to share data across organizational boundaries. After all, data that is shared across different stakeholders doesn't run out like physical resources.
Challenges of data sharing
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In addition to the numerous positive drivers for data sharing, there are also risks as well as some economic characteristics that slow down the trend and can be seen as challenges:
- Coordination: companies that collect data and companies that benefit from data are not always aware of each other.
- Data valuation: no standardized method for data valuation has been established.
- Uncertainty factors: if contracts are not covering everything, there is an increased uncertainty about how partners will behave due to unclear regulations, licenses, and terms and conditions, as well as who will bear any liability costs that might arise.
- Cyber Security: ensuring adequate cyber security. For example, Gartner predicted that by 2022, less than 5% of data sharing programs will be able to identify trusted data and locate trustworthy data sources correctly.
How can a data culture look like?
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What initially sounds like magic can be implemented thanks to digital technologies.
A single data concept that breaks down internal silos and eliminates errors that arise when different file versions are processed together, is not just theory but exists in reality. Additionally, certain industries already have clear business cases for external data sharing.
One example could be observed during the pandemic, when many data sources from health, public and private sectors were brought together to make important decisions.
Data sharing is about more than decision-making fundamentals, it is also about a direct link to business revenue. For organizations to take advantage of data sharing, they must become more digital and recognize the connection between investment and competitive advantage.
Technologies for encryption (e.g., FHE), communication (e.g., API), and transaction recording (e.g., DLT) can enable a data culture and successful collaboration.
Thus, the business-enabling trend of data sharing may well become a paradigm shift.
Our DIGITALL experts will help you evaluate, structure, and process your data by providing the right solutions and services for a strong data strategy.