Guide to balancing risks, trust and rewards

Successful multi-organisational data-sharing initiatives know how to achieve improvements that benefit all participants. What key factors should you look for? Which discussions warrant a deep dive with your partners? AMdEX and Abykys created a guide to smoothen your journey. Read the article.

Or skip straight to the manual on how to use it and download the template directly.

It is important to understand that the impact of data sharing usually exceeds the direct interest of a group of involved organisations. Data sharing initiatives often bring forth additional societal effects.

By leveraging the collective power of shared data, organisations can contribute to addressing critical societal challenges and creating a positive impact beyond their own business interests. Realising these societal effects often requires governmental influencing (e.g. subsidies) in order to make the data sharing initiative profitable for all involved.

This article emphasises the importance of a fair distribution of risks and benefits among all participants to achieve a solid financial foundation and consequently a sustainable data sharing collective. A well-developed business case is needed for the collective to get a grip on these risks and benefits.

Help your data-sharing initiatives

A business case is crucial for building trust and alignment, as projects will likely fail when benefits are unevenly distributed among participants. Successful data-sharing initiatives know how to reach improvements that benefit all participants.

That’s why AMdEX has created a template for you in cooperation with Abykys.

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Willem Koeman
Willem Koeman

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This template will help to:

  1. Clarify the ecosystem of the initiative. Who is a participant at what risk and return, and who is a supplier receiving a fee for enabling the ecosystem;
  2. Have a clear understanding of how each functionality contributes to the envisioned improvement and identified benefits;
  3. Quantify risks and incorporate it in the evaluations;
  4. Identify dependencies between partners and suppliers and the owners of Intellectual Property;
  5. Settle risks and benefits between participants to create a sustainable ecosystem.

The manual below will explain how to use the template. The template was set up to be used by a broad audience and focused on the foundation phase for data exchanges. Its use aims to determine whether an idea is financially feasible. For the execution phase, the results, assumptions, risks, and costs must be allocated on a timeline.

Power of data sharing

In today’s fast-paced business landscape, the opportunities of data sharing are increasingly acknowledged. Sharing data can help organisations to operate with enhanced efficiency, accelerate development, reduce costs, and even achieve collaborative breakthroughs that were once unattainable. These benefits offer tangible business value, measurable in euros.

However, the risks associated with sharing data often hamper the progress of data-sharing initiatives. Technology debates shift the focus away from creating sustainable value for all participants. At AMdEX, we understand these challenges and have developed proven strategies to help businesses successfully navigate this complex terrain.

How to use the business case template

Setup of the template

  • The business case template will demand a level of concreteness from each participant upon how it contributes or benefits, which a financially self-sustainable business for each participant can be built
  • To allocate benefits to a participant, their name has to be on the list
  • The white fields can be used for input, beige areas are calculated, and when grey fields appear due to a previous choice, they can be ignored
  • The document refers to the asset. The asset is the combination of functionalities the ecosystem will deliver to realise the described improvement.

1. Improvement(s) the asset creates resulting in what benefits for whom

  • Define the qualitative improvements the asset will bring. Seek improvements that are beneficial for all participants. Use cases where benefits between participants are unevenly allocated are likely to fail unless the benefiter is willing to pay a premium.
  • Define the quantitative impact of the improvements that the asset will bring by:
    • Establishing a baseline of the market that the asset will improve; what is the total current cost, the sum of the current market spent, risk budget allocated?
    • Estimate the added value the asset will bring compared to the baseline. What would be the added value, if everything were perfect? This is the upper bound of your business case. The lower bound would result from the scenario where all risks materialise.
  • Identify benefits that may initially seem non-financial (such as a positive impact on the environment, inclusion, diversification etc.) Challenge yourself to translate these into a financial measure. Preparing for environmental impact would lower risk; open ecosystems would result in faster development, and a positive image would result in higher customer loyalty. We are seeking a sustainable business case and are looking for revenue streams we can rely on.

2. Cost of the activities to develop, operate and run the asset by whom

  • The asset delivers improvements via (a combination) of functionalities. Ideally, these functionalities are divided into separate units to allow reuse. A separation that we have used is the following:
    • Applicational functionalities: how will the information be used and translated into an action that creates value?
    • Discover and use functionalities: how will the data be found, processed, and transformed into information (i.e. a suggestion, alert, or advice)?
    • Data management functionalities: how will the data be governed, monitored, formatted, stored, secured, and managed?
    • Data collection functionalities: how will data be gathered and transferred?
  • Functionalities are delivered via activities and their associated costs. Identify the activities that are required to provide the functionalities and estimate the associated fee, in total, and for each participant. Ensure all cost types are included; build, maintain, operate, and transfer. If a service is bought to deliver the functionality, the build and maintenance costs are greyed out, as this should be the cost for the service provider. When estimating the cost, do not include the cost of risk. This is a separate step.
  • Seek for re-usage opportunities (an example is Metcalfe’s law) but be prudent in including them as part of the benefits. If reuse is an ambition and not a fact, register a risk in the next step to mitigate these benefits.

3. Allocate risk and evaluate profitability in total and per participant

  • Apply the risks directly to the business case as a percentage discount for benefit or cost increase for the applicable period.
    • In case of high risks (uncertainties), could experiments improve the quality of the business case?
    • Could you cover a Risk with a subsidy?
  • Calculate the total cost benefit/risk reward.
  • Calculate the risks/rewards per participant – are the risks/rewards fairly distributed? Evaluate the role of each participant. Can they do what is asked of them? Does it make sense to do this kind of work? Is the impact between the using party and delivering party in balance if something goes wrong?
  • Prepare for the next steps. Identify an evaluation heartbeat, maintain the business case, and start experiments. It doesn’t stop here, but the article does.

Text: Dennis Groot

The Creatives Common copyright applies on the CC BY-ND AMdEX/ Abykys template. Please let us know what you think of it. If you need any help, please do not hesitate to reach out.