The use of data has grown tremendously in the last two decades. As organizations, we use data to make all kinds of decisions. Yet, despite the value we’ve seen from data usage, there is a hesitancy to share data with external parties and even trusted partners. Sometimes we’re even hesitant to share data with different groups within our own organization.
Why are we afraid to share data?
Many of us are likely afraid we will lose our competitive advantage by exposing secrets that others can replicate. We’re afraid of losing trust with key stakeholders if data is hacked, and we’re unsure how the data will be used.
I believe it is time to let go of this fear of data sharing as the risks of not sharing data greatly outweigh our fears. If we aren’t sharing data, we move slower, we introduce safety risks and the cost of re-work is high—especially when we choose the wrong supply chain partners. Sharing data can help increase competitive position, allow you to lean into artificial intelligence and machine learning technologies, and surface problems quickly so they can be addressed before getting out of control. On the contrary, withholding data can stifle innovation and limit insights that drive strategic decisions.
For example, a manufacturer that partnered with my company, Specright, initially struggled to make sense of critical components of their process. With an expansive product range and a large number of specifications to manage, data resided in too many places.
One instance of the data complexity they were facing was around pallets. The team was managing data from approximately 30 different pallet suppliers that posed numerous challenges, including data duplication, incomplete data and miscommunication. In this way, disjointed and siloed data can create inefficiencies, lead to errors and ultimately hinder a company’s ability to operate effectively.
Additionally, regulatory pressures are increasing, and consumers demand greater transparency about manufacturing processes when choosing vendors. Sharing data can help build trust with consumers by providing them with the information they need to make confident buying decisions.
According to the 2024 Edelman Trust Barometer, 82% of consumers want to be able to ask questions. At a time when more people distrust businesses, it’s essential we close the trust gap by being transparent. This includes understanding where goods were produced, knowing that procedures are implemented in the tracking process to quickly discover any hazardous material and having detailed access to any materials that might cause an allergic reaction.
Ensuring Secure Data Transfer Methods
Consumers want the benefit of data sharing, but they also demand data security. Sometimes we overcompensate for our data security, withholding critical data that may otherwise help our operation run more smoothly. First, make sure the data is secured internally through different ways. That starts with ensuring multifactor authentication (MFA) is enforced, role-based access is reviewed and updated regularly, encryption is enabled across sensitive data (at rest and in transit), data is backed up securely and so on.
Once you have the above taken care of, secure data transfer methods can help ensure you have control over what gets shared and with whom. As this can still cause hesitation for some, I suggest starting small and growing over time as your confidence in partner insights shows worth. The important thing is that you take a step toward greater network data sharing and transparency. The best way to get started is to follow three critical steps.
1. Align with strategic, high-impact partners.
When building pilot programs, you want to learn what will work with your most important partners. By learning with them, you build a foundation that is easy to roll out more fully when the time is right. Here are quick guidelines to get started.
- Use the 80/20 rule to identify your most critical suppliers that supply the bulk of your material.
- Set expectations and have meetings with the champions for buy-in before the initiative.
- Make the initiative as collaborative as possible, and find technology that will support an agile process.
- Suppliers' lack of response might be an initial challenge, but choose the ones you have a good relationship with.
2. Focus on data that will directly impact operations.
Too often we let fear get in the way of progress, choosing to focus on data that we don’t believe is critical. We perceive less risk this way, but we also miss the opportunity to drive new value.
It’s crucial to identify the data you need to keep operations running smoothly, and the data you need to weather any supply chain volatility. For instance, typically companies share data back and forth with their suppliers via email or documents. Some of this data may be "must haves" but some of it may not be, which could lead to misinformation or confusion. When it comes to data, simplify. Focus on the critical data you need to capture consistently.
Think about how you are communicating with your suppliers; it’s usually via email. This type of back-and-forth communication can lead to delays in production, procurement processes, sustainability reporting and more.
Consider developing a digital template for critical data. Then identify who needs to fill out which data (your internal teams, suppliers, etc.) and when. This allows for consistency and establishes an expectation for data compliance, especially from suppliers.
3. Choose tech partners you can trust.
Carefully vet data transfer procedures, security policies and evaluate past work. Your technology partner shouldn’t just be an expert in their product but also have expert staff prepared to help you utilize that technology as part of an integrated ecosystem.
Data sharing can trigger fear, but a strategic and thoughtful approach as detailed above can help outweigh the risk.
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