In the previous episode, I explained that Solid is an innovation that will greatly benefit us, people. Luckily, also organisations can gain a lot from using this new standard.
In this episode, I explain why.
In organisations, it is important that IT systems deliver value. This value is determined by the benefit that the IT system delivers, minus the costs, the risks and the capital that the IT system requires or implies.
This applies to all IT systems and thus also to personal data management systems based upon the Solid standard.
The benefits of IT systems can mostly be found in two categories: benefits that stem from using IT to create a temporary competitive advantage and the benefits that IT brings by increasing the productivity of the organization.
Likewise, organisations typically invest in personal data management systems to improve the digital experiences of their customers, employees or citizens, to get more market insights, to increase their trust level or to streamline their operations.
The costs of an IT system are typically related to the purpose for which an IT system is used. For personal data management systems, the costs can be subdivided into four key categories.
First, there is a cost to capture or update data. Organisations have to make these costs in order to prevent data decay. That is, when databases containing personal data are not kept up to date, their quality will reduce over time because people undergo several key life events such as moving house, marrying, divorcing and sadly even dying.
Second, organisations have a cost to verify personal data. This is because several organisations need to be sure that the data that you provide to them is accurate. An example of this can be found in the financial sector. Because of KYC regulations, banks typically ask you to regularly send them a copy of your identity card.
Third, organisations have a cost to store personal data in a secure and reliable way. Just think about the many data centers organisations typically use and how well they are secured.
Fourth, organisations incur a cost to use the data. These costs typically stem from making sure that the right data can be gathered at the right time.
By using the Solid standards, organisations will have better access to up-to-date and verified information at the right time without having to worry about where data is stored. This means that by relying on Solid, all of these costs can be reduced.
The risks of a personal data management system commonly stem from two issues. First, organisations may be at risk because their systems’ databases contain data of a low quality because data of low quality might result in wrong decisions being made. Second, organisations may be at risk because their personal data management systems might cause a data breach and such breaches are most likely to cause a loss of consumer trust.
The Solid standard can help to mitigate these risks because it enables organisations to improve the quality of their personal data and help to inform customers about why their data was used for so data breaches are less likely to occur.
The last factor that plays a role in the added value of IT systems is the cost of the capital that an organisation has invested in its IT systems. Capital invested in IT has a cost because this money cannot be invested for other purposes.
The capital that an organisation has invested in personal data management systems is mostly made up of investments in their personal data infrastructure. This infrastructure does not only encompass the technical systems, but also the expertise to make sure that the infrastructure is managed correctly. In other words, the personal data infrastructure is made up of the components that are required to perform business processes that make use of personal data.
When this capital is invested properly, it should enable flexibility and innovation. This means that organisations should be able to quickly and reliably design new applications, business processes and even services. You can compare this a bit to your wifi network at home. If you have a good wifi infrastructure, you will have it a lot easier to switch working from home or add smart appliances.
To optimise the total cost of ownership of such an IT infrastructure, and thus also a personal data infrastructure, organisations typically make decisions in two areas: standardisation and the degree of centralisation or decentralisation.
Standardisation is important because infrastructures typically have a long lifespan meaning that, over time, more components will be added to them. Unfortunately, more components also mean that there will be more connections between those components. If those connections are not standardised, the complexity of the infrastructure scales in an exponential way. The complexity of a standardised infrastructure will scale linearly.
The centralisation versus decentralisation does not only apply to the technical components of the infrastructure, but also to the development teams and the management. More often than not, organisations should centralise only their infrastructure managers and decentralise the rest.
As Solid is an open standard to decentralise personal data, it is clear that it helps to reduce the total cost of ownership of a personal data management infrastructure while it improves its flexibility to allow for innovation.
Thus, in conclusion, Solid offers several advantages to organisations. Besides enabling a flexible personal data infrastructure that delivers value. It also enables benefits, such as a better customer or citizen experience, reduces personal data costs such as costs to verify and update personal data and mitigates several personal data risks.
