Systematic accounting of data and information flows is about to be acknowledged as an integral part of regular internal and public reporting by organisations. Alongside finances and corporate social responsibility, the topic of data has now found its way to annual reports. Forerunners publish even dedicated accounting reports for data and information flows, something which can be recommended in data-driven sectors.
For example, Finnish Transport Safety Agency Trafi recently published their second data balance sheet (tietotilinpäätös), an annual report describing their data strategy, related architectures and inventory of data and information flows. This supports Trafi in their aim to be a forerunner in collecting data but also opening it up for maximum use for societal benefit. Through digital public sector services and open data policy, Trafi among others encourages data flows between authorities, between authorities and (typically data-producing) users and towards companies to boost business. Examples of Trafi’s data include statistics and registers on vehicles, licences, permits and accidents. Another pioneer in data accounting is the Finnish Population Register Centre, having compiled data balance sheets since 2010, although due to the nature of the registers only a summary of the report is available for the public.
Why is this important?
Platform economy is all about unleashing the cornucopia of opportunities linked to data. Users and producers as well as the functioning of the platform create, process, store and exchange data, and these data and information flows form the key type of interaction in platform economy. Furthermore, many of the emerging technology areas linked to platforms, such as artificial intelligence, blockchain or automation, are extremely data-intensive.
Management of data has therefore become an increasingly critical and strategic part of activities of companies, public sector authorities and even individuals. On the one hand, data is an asset of real value, but on the other hand, this value can only come to fruition and grow through sharing and opening. This challenges existing business logics in many sectors, where data previously had little or no role or where data flows and information systems used to be strictly in-house matters.
Arguments favouring the introduction of data accounting to regular managerial and strategy work of organisations include both discovering opportunities but also addressing threats and uncertainties. Systematic data accounting helps internal monitoring and improvement, and an open approach helps to expand collaboration and partnerships with others (users, customers, companies and authorities). Accounting should also include responses and preparedness for safety and security issues as well as strategies related to data ownership, surveillance and fulfilment of possible regulatory requirements.
Things to keep an eye on
A significant change factor in the topic of data management in Europe is the data protection regulation (EU) 2016/679 that is to be applied in all European Union Member States in May 2018. This regulation addresses the protection of natural persons with regard to the processing of personal data and on the free movement of such data.
European Data Protection Supervisor lays out a definition of accountability in the meaning that organisations need to “put in place appropriate technical and organisational measures and be able to demonstrate what they did and its effectiveness when requested”. Suchlike measures include “adequate documentation on what personal data are processed, how, to what purpose, how long; documented processes and procedures aiming at tackling data protection issues at an early state when building information systems or responding to a data breach; the presence of a Data Protection Officer that be integrated in the organisation planning and operations etc.”
Another great resource on the topic is the recent publication by the Finnish Government´s analysis, assessment and research activities on use and impacts of open data. The report describes the openness of major data resources maintained by the public administration and on means to assess the economic impacts of open data in Finland. An analysis of the relationship between firms’ use of open data and their innovation production and growth is also provided. To conclude, the report proposes specific recommendations how to enhance the impact of open data in our society, including the use of tools such as data balance sheets.
The European Digital single market strategy and especially the subtopic of online platforms fits well into the above-mentioned discussion. Issues addressed under these activities include for example concerns about how online platforms collect and make use of users’ data, the fairness in business-to-business relations between online platforms and their suppliers, consumer protection and the role of online platforms in tackling illegal content online.
Selected articles and websites
General Data Protection Regulation (EU) 2016/679 – EUR-Lex
European Data Protection Supervisor: Accountability
European Commission: Digital single market – Online platforms
Valtioneuvoston kanslia: Avoimen datan hyödyntäminen ja vaikuttavuus
Liikenteen turvallisuusvirasto Trafi: Tietotilinpäätös 2016
Data Protection Ombudsman: Prepare a data balance sheet
TechRepublic: Data’s new home: Your company’s balance sheet