Open Data Business Models

Open Data Business Models

Open data platform adoption is the new Holy Grail for business model disruption. Effectively harnessing two of the major trends over the last few years. The first being that of a platform business model and the second, exposing a level of scrubbed data to the industry.

The second trend is certainly far more scary than the first as businesses with a more traditional CIO and exco will view it as giving away customer data and losing a competitive advantage.

Let’s unpack these a little before we talk about the open data business model.

Platform Business Models

We are all more than well aware of the technological platform business wonders that are Airbnb and Uber as well as a host of others.

open data platform business

These are organisations who own nothing more than the technology platform on which they house specific open data. They don’t own a host of assets in the shape of hotels and cars; they definitely do not employ thousands of staff, drivers, kitchen staff, front desk staff, mechanics, etc.

What they do own is the Platform their businesses are built on. They have successfully disrupted their industries by taking advantage not only of technology, but also more importantly of revolutionary business model design.

Exposing Data

This is definitely something that scares a lot of organisations – and customers. Exposing a level of data seems counter-intuative. This data that you have is customer data, data that packages your competitive advantage.

The first thing that’s wrong with that sentence is that if your customer data is your only competitive advantage; then you have a very broken business.

Your data should definitively be part of your competitive advantage; but only in so far as it assists you to make competitive decisions, it should not be the ownership of the data that makes your business more competitive than another.

External Open Data

Of course there is a level of data that we expose every day to the world through API’s and other webapps. This is something we have become comfortable with as it assists our businesses to function and earn revenue and it is less about exposing a data layer and more about allowing processes to function outside of our organisation.

Sure we are aware of where some organisations have done this before; but that’s all been “greater good” stuff… Like When Google opened up Google Public Data Explorer. This open data network exposes a level of Google search data that has been opened to allow people to see trends. Such as their Flu data.

Flu search activity based on aggregated Google Search query data, standardized to make data more comparable across regions. The ‘baseline’ level for each region (shown as 0) is its average flu search activity, measured over many seasons. Activity levels for each region represent how much flu search activity differs from that region’s ‘baseline’. level.

But this is safe, because this is technically already public data that has just been aggregated for us. But the principle still holds true. Exposing a level of data to allow for greater analysis and optimisation.

This is what we are searching for as a means to disrupt our current business models.

Internal Open Data

What we have begun to do well is expose data internally. Allowing teams (traditionally silos) to access data that could aid them in their function. This internal sharing of data is largely couched under customer centricity. Allowing employees, largely regardless of role, to be able to assist a customer quickly and efficiently because they are exposed to all of the data that they need to enable them to assit.

This internal open data sharing breaks down internal divisions, allows for collaboration and quick and efficent handling or queries. This is what we are all striving for when we are looking at internal digitalisation of an organistion. Or as it is largely phrased, digital disruption.

Merging Open Data with The Platform Business

When you are able to harness these two trends together, something fantastic happens.

Your business is able to take advantage of a scalable business model that is far easier and quicker to pivot. It is not bogged down in the high asset cost arena where your data is just being used internally to facilitate a slightly better way of reaching and dealing with your customer.

When an entire industry opens elements of their data, it can be part of bigger, wider movement that aims at sharing data for the greater efficencies for all involved, to allow for greater business model innovation and diversity of income.

Adjacent Industries

Imagine when we start to look at adjacent industries that affect your upstream and downstream strategies. Imagine being able to understand those industries better through open data so that you could also innovate your busines model and processes to better request service from your suppliers.

By becoming part of an open data network that scrubs the personal and, to a degree, competitive advantage info from your data means that we are all participating in optimising the way in which we are serving our customers and optimising our business processes.

Utilising the platform business way of thinking allows us to invisage a way to reorganise our current organisation and potentially spinoff new disruptive businesses to diversify our revenue streams and own new value chains.

It is a strategy that needs to clearly be thought through before engaged in; but the caution is that one must investigate it in spite of the irrational fear of giving away data.