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Sustainability Via Big-Data Sharing
May 31, 2012
As information technologies continue to mature and sustainability issues become business imperatives, a big-data marketplace is emerging that will generate greater resource efficiency and new revenue opportunities.
Open source and proprietary technologies now can collect and crunch previously unimaginable amounts of digital information. Managed big-data services are stepping up to further reduce the IT burden for companies, and networked solutions promise to reduce what Stanford professor Hau Lee described in the 1990s as the “Bullwhip” effect.
The bullwhip is a metaphor for what happens as small human-induced inaccuracies in information become increasingly exaggerated as they move up the supply chain from customer to retailer to manufacturer to supplier. The net result is a significant loss of efficiency and higher costs (monetary and environmental) for everyone.
It’s easy to see how shared access to real-time analytics and data sets can take the slack out of the bullwhip, but progressive companies and organizations also are finding that releasing data to a broader (even unlimited) ecosystem – a relatively simple task for IT – can exponentially increase efficiencies and provide the raw material for building tangential business models and interactions.
For example, when the Massachusetts Bay Transportation Authority (MBTA) released its data to the public, developers stepped in to create OpenMBTA, a free, open-source platform for delivering public transit schedules and real-time arrival and departure data via mobile devices and the Web. I don’t believe figures are available, but I’m certain the system has improved ridership, customer satisfaction, and the overall efficiency of transportation throughout the Bay region.
Similarly, the future of sustainable growth will involve companies that harness their own data and fuse it in real-time with the world around them. In many instances, the value of the data will allow for monetization, as third parties pay for access to info that allows them to target new products and services within each link of the supply chain.
In the case of consumer data collected by a utility or home area network provider, monetization will be similar to the customized advertising options offered by Google and Facebook (after privacy issues are addressed, of course). In this regard, developing smart grids have only scratched the surface of what is possible through greater data sharing. Current deployments are primarily frameworks for solving engineering problems related to electricity distribution. As such, they are like the Internet circa 1990, a limited network for energy utilities. But Smart Grid 2.0 – or the Retail Smart Grid – will unleash massive innovation, as the Internet did in the mid 1990s when it became the foundation for the Web.
Market-driven economies innovate and expand when they find a means of transforming new technologies into mass consumer markets (e.g., the automotive industry, personal computers, the Web). The conversion of the smart grid to a retailing platform will unleash levels of energy efficiency gains that will parallel the productivity gains from the commercialization of the Internet.
Data analytics courtesy of the smart grid has the potential to take much of the guess-work and whip effect out of energy supply. But just as importantly, it can become the foundation of a new industry, in which subtle signals from customer energy usage trigger just-in-time service calls for HVAC, sales opportunities for home improvement and appliance retailers and other innovations for cutting waste and improving consumer choice that are currently unimagined.