Gregory Maciag

Growing Standards Movement

Data standards benefit all participants in the industries they serve. However, sometimes people are a little slow to get wise to their own best interests. Here's Matt Cohen:

“RETS [Real Estate Transaction Standard] has been under development since 1999. It isn’t even close to 'done' because for most of those years no one was managing the process, and RETS development was driven almost entirely by the part-time effort of volunteers such as myself. It is only in recent years that RESO [Real Estate Standards Organization ]was formed and professional project management was put in place to manage the volunteer effort. This has radically accelerated RETS standards development; if the industry puts more funding into RESO, it may be possible to hire more staff to make the process go even faster.”

In fact, fifteen years is good going for a data standard. Call it a soft launch. It takes time for people to understand the issues and to see how standards are the answer to their problems. RETS is getting implemented although Cohen stresses that customers need to press vendors to adopt standards.   REALUOSO

When to Centralize Standards

The use of Legal Entity Identifiers (LEIs) is growing strongly in the financial sector. By being able to report on entities as well as instruments, players and regulators get a proper picture of where assets and liabilities are held. This is a major step toward curing the fragmentation that partly led to the credit crunch and its aftermath.

However, LEIs are being implemented in a distributed way. There is, as yet, no central organization to manage them. So it's possible that LEIs will not be truly global, and that they may become outdated.

The debate seems to be around not whether there needs to be such a central organization, but when it will be required, and how extensive its powers should be. My instinctive answer would be to set it up sooner rather than later, and give it only the absolute minimum authority it needs to do its job.

The world of finance is global as well as local. So it needs global standards. However, the standard for an entity identifier does not need to be complex. It just needs everybody's support. Any central coordinating body should be lightweight, but led and staffed by respected people.  A TEAM

The Standards Guarantee

One of the paradoxes about data standards is that we need to to make a lot of noise about standards to get them adopted – yet the role of standards in business is quite unobtrusive, and even invisible. This is because standards have a unique feature that makes them different than other techniques, principles, solutions, and methodologies. The unique thing about standards is that they correct the habits of the organization. Standards are systemic. It's as if the organization could swallow a pill for good behavior.

Standards encapsulate the best practice of a business community. But standards are not just descriptive. They are also prescriptive. Standards can be applied to systems and processes to ensure business operations are performed in the best possible way every time, everywhere – by default. So best practice becomes basic practice.

Having standards throughout the enterprise guarantees competence, currency, and connectivity for all your information management and exploitation activities. And since information is the lifeblood of the enterprise, standards are an essential guarantor of corporate health.

With this sound basis for operation and collaboration, the organization can reach beyond “business as usual” to produce real excellence. Standards are a sure foundation for leadership and innovation. At the same time, they reduce costs across the board by removing duplication, delay, confusion, convoluted systems, and support for non-standard solutions.

Data Act Passes Senate

Writing in Forbes magazine, Hudson Hollister, Executive Director of the Data Transparency Coalition, gives an enthusiastic and rousing welcome to the unanimous passing of the DATA Act by the Senate: “Without common data standards across all government spending, analyses of cross-agency spending trends require endless conversions of apples to oranges. For a nation whose tech industry leads the world, there is no reason to allow this antiquated system to persist.”

Hollister is a lucid and cogent advocate of data standards. But what's notable about this article is its location – in a mass market, newsstand magazine title. This is more proof – if more proof is needed – that business really does get it. Data standards are a business issue. I believe access to meaningful, usable data is as vital as, and maybe more vital than, access to capital, skills, or physical infrastructure.

The importance of data to our economy and society is getting wider coverage thanks to the DATA Act. The Washington Post's report on the Senate vote is headed: “The DATA Act just passed the Senate. Here’s why that matters.”  Forbes

Quote of the Day

“[W]hen data standardization really works, you probably won’t even notice it has happened...” - Benjamin Weinryb Grohsgal, the Kennedy School and the Graduate School of Design at Harvard.

Building Data Standards

 

Innovation

The standards mindset includes a distinct attitude to innovation. Let me try to summarize this here. Innovations are often pitched as new-to-the-world. But an innovation only needs to be viable, and beneficial to the business. The substance of an innovative action may be very old – tried and tested, copied from elsewhere. So, when thinking from a standards viewpoint, we assess innovations by looking for a small difference in detail that produces a big difference in performance. For example, the inventor of the Sony Walkman took existing technology and twisted it for a new usage scenario. Basically, a Walkman was a tape recorder that didn't record and didn't have any speakers. The innovation lay in rethinking the existing technology, and then applying engineering skills to produce the required small form factor.

The most powerful innovations are those which rely 99% on existing assets. This is as true for the most outlandish skyscraper as the most creative insurance products. Each uses a range of standardized, trusted components – plus some novelty. The standards mindset looks for maximum leverage of existing productized entities, minimum invention, and a credibly defined opportunity. I find the standards mindset helps people evaluate new ideas rationally while insulating them from the ballyhoo of passing bandwagons.

I believe the standards mindset leads to faster and more certain evaluation of innovation opportunities, and more confident implementation. Standards thinking is smart thinking. It's about using not just your own brain, but the experience and insight of the entire community behind the standard. 

What Before How

Leaders in data standards are usually both thoughtful and practical people. This tends to be a rare mix – not because the majority of people aren't thoughtful and practical, but because organizations tend to push people to one extreme or the other. You know, you're either a thinker or a doer – when, with information at the heart of every business, it's obvious we all need to be both.

Alex R Coley is the data standards guy at the UK's Department for Environment, Food and Rural Affairs (Defra). He's thoughtful and practical, in spades, going by his blog. He has a couple of slogans: “Data for a reason” and “What before how”. I like both of these.

Alex recently asked why we get over-attached to software, even though we know that doing so tends to create silos that we'll then labor hard to break through. He believes we get particularly attached to software which bolsters our self-image as experts in our area.

I think there's a lot in this. It makes me wonder whether there might be some sense in limiting innovation in the user interface while continuing to press for standardization of data and process under the hood.

Has there been a genuine worthwhile innovation in user interfaces recently? The most radical thing I can think of is that icons showing floppy disks are slowly being replaced by ones that show downward-pointing arrows.  How's this for a pitch: Our new release looks and feels exactly like the last one!  But it uses data standards!

Data For a Reason

Counting the Cost

What are the costs of doing business without data standards? These come under three headings.

First, there are unique commitment costs. If an organization doesn't use an available standard, then it has to create, maintain, and support its own formats. It has to document, teach, and police these internal protocols. It will need to source and protect the resources and skills required to keep the non-standard approach afloat. All of these costs will persist, and swell, for the duration of the commitment.

Second, there are lost opportunity costs. Inability to trade with partners, share information across organizational boundaries, and innovate with certainty and speed, will hold the business back and cause measurable failures. Competitiveness will fall and the organization's attractiveness to potential employees will wane. The organization will deem to have isolated itself.

Third, there are knowledge deficits. Without standards, meaningful information is hard and often impossible to capture, collate, and act upon. Process fragmentation is deeply entrenched and the business mission becomes confused. An organization without standards rapidly becomes an organization without knowledge, unable even to recognize the decisions it needs to take, let alone take them in an informed and timely manner.

Recognized Standards

What makes a data standard fit for purpose? The answer is: Recognition.   I don't mean recognition in the sense of recognizing a friend in a crowd. I mean the kind of recognition that countries do when they agree to have talks with each other. Or when the chair of a meeting recognizes one of the questioners from the floor. 

If something is “the recognized leader in its field” then it has the practical approval of most people who are in a position to make an informed judgement.  A medical researcher comments in a paper on data standards: “We argue that it does not matter which data standards are chosen as long as well-recognized data standards are used.” At first, this might look strange. Isn't it better to have demonstrably right standards, rather than just the standards other people use? 

When it comes to standards, what gets used is what's right. There is no other way to prove correctness other than by repeated successful application. There's no formal proof for data standards, like there might be for a math problem. And this is because standards solve human problems – for humans.   Translational Medicine

 

School of Data

If you know someone who could benefit from an introduction to data, School of Data is a great place to send them. The School has free modules written by knowledgeable folks, designed to be understandable by anybody.  School of Data

Transparency

Transparency must be high on anyone's list for business technology word of the year. I think “transparent” is heading for classic status, alongside “seamless”.

Whether you're in commercial business, government or the not-for-profit sector, the need for transparency is the biggest outcome from the 2008 crash. There's general acceptance that, in order to avoid being blindsided by massive, unexpected risks, we've got to have clear and up-to-date knowledge of all the data we're dealing with.

Here, good management instincts are in line with the principle of accountability. You can't manage without trustworthy information. And trustworthy has to mean, in part, accessible. The work of standards is usually presented as saving money and promoting collaboration – and that's right. Absolutely. But data standards are also inseparable from the ideal of transparency.

Frankly, without standards, no transparency. Because without standards, you can't understand what you're looking at without the help of some interpreter. Without standards, you can't compare information from different sources.

What's new, I believe, is the growing appreciation that what used to be seen as specialist concerns of technology people inside large organizations – well, these concerns are now seen as belonging to us all. The realization that information is a business issue has made great headway inside companies. Now people are realizing that information is a civic issue too.  FEDTECH

Tipping Point for Standards

There's a new data standard for the private equity sector called Group One. It comes as an XML schema with some 800 items including capital accounts, schedules of investments and cashflow activity. The standard replaces a set of guidelines for information exchange.

Why now? According to Stuart Keeler, vice-president at the AltExchange Alliance which manages Group One, the industry is very diverse and wasn't able to adopt pre-existing standards. With new regulations coming up, and increasing demands for transparency, it made sense to invest in creating and adopting standards now.

I believe there's a tipping point where the cost of maintaining needless complexity gives way to the clear need for a collaborative standard. That's what happened here – but it's interesting to see that regulation and transparency play additional roles. It can be easier to move to standards when there are external drivers as well as the internal logic to pay attention to.   WatersTechnology

Selling and Telling

Standards are good for you. So is brushing your teeth, getting a good night's sleep, being polite to your neighbors, and keeping your eyes on the road. No matter how obvious a good practice is, people need to be sold on the idea. It's not because they're dumb, or rebellious, or lazy. It's because there's always something more immediately gratifying that they'd prefer to do.

And, all other things equal, telling anyone to do something is a sure way to get their back up. Perversely, the more right they know you are, the more they'll resent being told.

So even the most self-evident change in practice has to be sold to the people involved. The case for standards writes itself, but it still needs to be repeated. Even with the toughest governance processes in place, the rationale of standards needs to be reinforced or non-standard practices will sneak into the organization – with all the attendant costs, complexity and all-round heartache.