Over the last several years data has quickly become one of the most valuable assets in the world. This is particularly true for today’s enterprises, whose firewalls protect nearly 80 percent of the world’s data, and therefore hold the keys to greater profits, increased efficiency, untapped potential, and innovation. Yet many modern enterprises are unable to realise the full potential of their data for one simple reason: they hesitate to share data.
Data sharing is by no means a new practice. The exchange of data has been an integral part of various industries for decades. For instance, retailers share sales data insights with Consumer Packaged Goods (CPG) companies so they can better understand who is purchasing their product. Banks and insurance companies rely on shared data to assess risk and detect fraudulent activities. Healthcare organisations utilise patient data to advance medical research and develop personalised treatments for better outcomes. More recently, Software companies have made it possible to share datasets between different SaaS applications through cloud platforms. In essence, data sharing has always played a vital role in fostering growth and progress across diverse sectors.
Despite the long-standing practice of data sharing, some businesses remain hesitant. Why? Well, it often comes down to certain biases, namely that data sharing is a highly costly and potentially risky process that is exclusive to larger enterprises working with large volumes of data for the purposes of monetisation. Because of this, smaller companies perceive data-sharing practices as an obligatory function, rather than what it actually is: a business goal that can open the door to opportunities for new value creation.
Inside the Emerging Trend: What is Data Sharing About?
At its most fundamental level, data sharing has always been about making data resources available to various partners while ensuring data integrity across all entities consuming the data. However, until recently, the traditional processes of data exchange between separate companies made achieving this objective almost impossible. In order to make the transfer, large quantities of data would first have to be gathered and compressed into files before being exchanged and loaded into the target platform. As a result, not only is the risk of data corruption high, but because it is a time-intensive process, as soon as the data share is complete, it is already outdated.
However, over the last few years, the rise of cloud-based data-sharing technology has effectively reduced the risks, costs, and frustration of traditional sharing methods. For instance, in 2017 the cloud-based SaaS company, Snowflake, introduced an innovative data-sharing service that enables two Snowflake deployments from two different organizations to securely share data at scale in real-time within the same Snowflake platform – without having to deal with costly and complex to maintain inter-organization data exchange flows.
But what’s the driving force behind the growing data-sharing trend today? In a nutshell, data gains value when it is shared.
According to a study by Gartner, by 2023 organisations that promote data sharing will “outperform their counterparts on most business value indicators.” Implementing data-sharing practices enables organisations to streamline decision-making processes, improve overall performance, and gain a competitive edge in the market. For instance, real-time pricing, enabled through data sharing empowers businesses to quickly make informed pricing decisions based on accurate market insights allowing them to respond swiftly to market changes and optimize their pricing strategies. Moreover, data sharing makes information more accessible and breaks down barriers that impede collaboration. By enabling companies to share relevant data securely, it facilitates collaboration and knowledge exchange, fostering innovation and growth for all parties.
Which Types of Businesses Can Benefit from Data Sharing?
Using the right approach, businesses across nearly all industries can benefit from sharing data, internally and externally. For instance, any organisation with multiple departments can leverage intra-departmental data sharing to enhance communication by breaking down data silos and sharing relevant information across different teams, leading to streamlined processes, improved operational efficiency, resource allocation, and enhanced decision-making.
From an external sharing perspective, consider the marketing and advertising industry, which relies heavily on data for audience metrics, targeted campaigns, and measuring campaign effectiveness. By sharing data across various stakeholders such as advertisers, publishers, and marketing agencies, organisations can gain deeper insights into consumer behavior, preferences, and market trends, creating a more effective campaign overall.
The same principles and outcomes can be applied to a number of industries ranging from Health & Wellness, Retail, Construction, Consumer Packaged Goods (CPG), and Software. For example, through a recent partnership, cloud-based software companies Salesforce and Snowflake have created new zero-copy data-sharing capabilities to help customers securely collaborate with data in real time between Salesforce Customer Data Platform (CDP) and Snowflake, reducing the risks, costs, and frustrations from traditional sync methods.
Even enterprises dealing primarily with sensitive data can implement data-sharing practices using a third-party provider to create a clean room, enabling organisations to collaborate on shared data without compromising privacy, security, or violating regulatory requirements. The latter is primarily used in marketing and advertising areas.
What are the Key Factors of Successful Data Sharing Practices?
Data sharing has proven itself to be an invaluable strategy with overarching benefits across the entire enterprise ecosystem. However, it’s worth noting that like any strategy, if implemented carelessly data sharing may harm more than it helps. In order for any modern data-sharing practice to be effective, there are four critical success factors to consider:
- Data-Sharing Culture within the Company. Realising the benefits of data sharing begins with fostering a culture of digital trust, open data, and collaboration from the inside out. In turn, sharing data may help discourage siloed mindsets in department leaders, making them less likely to hoard their valuable data in the future and leverage greater value from their data-sharing ecosystems.
- Reinforcing Customer/Supplier Relationships. Customer and supplier partnerships play a vital role in data-sharing initiatives. By reinforcing transparent relationships built on trust, companies can create an environment conducive to collaborative data sharing that is mutually beneficial to all parties.
- A Ready-to-Use Ecosystem. Leveraging a ready-to-use ecosystem can expedite the implementation of data-sharing practices, however, it’s worth noting that a data-sharing process isn’t one-fits-all. Organisations should look to partnering with trusted providers and utilise platforms that offer robust data management and sharing capabilities that are aligned with business needs and objectives.
- Utilising Data Analysts. The true value of data sharing cannot be unlocked without the role of skilled data analysts who can analyse data with the right level of granularity for the company. Using shared data, data analysts can derive actionable insights that will enhance decision-making and performance in line with the unique needs and objectives of an organisation.
The Big Picture
As we’ve seen, the practice of data sharing has been around for years, though its implementation has generally been limited to companies with the time, capital, and risk capacity to reap its benefits. Now with the rapid pace of technology, these barriers have all but disappeared, allowing businesses of practically any industry or size to share data at scale with virtually no cost.
As new marketplaces continue to grow at an unprecedented rate, a world of capabilities and opportunities is opening, securely allowing companies to both extract the full value of their data and easily leverage external sources to create deeper, more impactful insights to drive company performance and growth. Furthermore, the proliferation of data has far-reaching implications for the growing AI-led business models that thrive and learn from increased access to diverse datasets, accelerating the expansion of an industry that is already transforming the way we do business. With this in mind, businesses can be assured of one thing for certain: when it comes to navigating the data-driven world, those who share will succeed.