Data standards have immediate, obvious
value in industries where tangible products are moved among participants. If
you're building automobiles, you know you're involved in supply chains. To make
those chains as efficient as possible, participants sign up for data standards
that will speed the identification, logging, receiving and storage of parts and
products. Standardization also brings easier quality control, safety and
disposal management, among other benefits.
Despite the fashion for seeing the world in terms of networks, it's a curious fact that people in non-tangibles don't always realize they're involved in supply chains too. They don't see that the information flowing among partners is their shared endeavor. And how failing to make information flow as efficiently as possible threatens agility, quality and profitability – for everyone in the chain. This is often why standards aren't on their radar.
We can try to fix people's understanding, and get them to see how they're part of a dynamic, collaborating enterprise that crosses organizational boundaries and evolves over time. This might raise awareness, which is always a good thing, but it doesn't necessarily lead to a clamor for standards. It's management who need to get the message.
Standards continue to create benefit for businesses and consumers alike. This is partly because even if you don't conceptualize yourself as being in a value chain, anyone involved in insurance has to cooperate with others. People feel pressure from those relying on them, while putting pressure on those whose input they themselves need. So, while insurance is a non-tangible type of business, it has developed a high regard for the value of standards.
It's a different story in the financial
industry. Here, although people are also closely involved in chains, there's
more of a culture of independence. The packaging or securitization of debt is a
prime example of how finance works to transform flows into products, so they
can be traded more anonymously. This encourages people to ignore the
interdependencies they are creating. And there is less of an interest in
standards, because every deal is (supposedly) unique. Of course, there are exceptions when it comes to transactional business, credit cards and markets.
The good news is that the most important area for standards development, namely health, is following more in the insurance mold than the financial mold. Health professionals from different disciplines realize they are collaborating in complex chains serving the needs of the patient. They know those chains have to be both strong and slick. Standards are key to their success.
Efficiency isn't for nerds. It's for everyone. It's the basis on which we can build real value. Standards aid efficiency, and efficiency is the parent of effectiveness.
Comments