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Top 7 Benefits of Open Data for Businesses

Open data - that is, data that has been made freely available for anyone to access and reuse - is becoming a much more widespread phenomenon in recent times, with an ever-increasing number of datasets being made public. This not only means big gains for the global economy as a whole; McKinsey estimates open source data could be worth $3 to $5 trillion annually, but also to the individual businesses that choose to make use of it.

Any marketer working in today's digital world will understand the importance of having a data-driven marketing and sales strategy, and open data represents a potential goldmine of information that can be used in a number of different ways. Open data is great for business, and in this article, we'll explore exactly why that is.

 

Benefits for Business

While the open data movement was initially kicked off as a way of making government operations more transparent and for sharing scientific sources for big data, many businesses are now jumping on the bandwagon. In fact, research from the Met Office found that 20% of those using their datasets are doing so solely for commercial purposes.

So what are the benefits of public datasets for businesses, and why should you consider using open data as part of your sales and marketing strategy?

 

It Encourages Innovation

One of the prime advantages of open data is that it allows businesses to be set up based entirely on public datasets. It’s therefore ideal for startups and smaller companies, which is why the majority of companies using it are those that have been more recently established, as is shown in the graph below from the Open Data Institute.

City mapper is a good example; the startup uses information, made public by TfL for its navigational app which has now been valued at around £250 million.

 

Source: Open Data Institute (2015) Open data means business: UK innovation across sectors and regions
 

It Creates Additional Opportunities

As well as enabling new businesses to be set up entirely based on open data, it also provides existing companies with the chance to develop new products and services alongside their current portfolio. There are plenty of SMEs in a wide range of sectors who are creating data products or consultancy services based on open data. For example, GeoLytix offers location consultancy services to smaller companies that don't have the resources to build their own datasets.
 

It Provides Market Insight

Open data can give you great insight into the way the market is developing, through things like reports, surveys and social media mentions. It can be a good source of information for investors looking for new potential deals, as well as companies looking to modernise and leverage new trends.
 

It Keeps You Ahead of the Competition

Given that the use of open data for business purposes is still a relatively new concept, companies who choose to get involved sooner rather than later will have a distinct advantage over their competitors. Not only will they potentially glean lucrative insights that others in their niche haven't got to, but they'll be much more prepared for the future. Like big data, open data is growing rapidly, so by building a team that understands how to read open data analytics and make sense of big data sources, you'll be in on the ground floor.
 

It Helps You Size Up Competitors

Open data also has the advantage of helping you check up on your competitors for free. Using a reputable company intelligence provider such as Global Database will give you insights into things like the technology they're using, and their recent financials. When you're armed with this information you can see how effective their marketing strategy is compared to your own.
 

It Allows for Targeted Marketing

Data-driven marketing is almost always more successful; once you have a decent amount of background information on a potential customer you can target them more easily. This can be achieved with open data, by using things like company databases and social media mentions to give you a good overview so you're then able to personalise your messages as much as possible.
 

It’s a Great Leveller

Unlike many forms of paid data, open data is much more likely to put all types of companies on an even playing field due to the fact it's free. It removes barriers for small businesses and allows them to gain the same insights as much larger organisations. This is evidenced by a recent survey conducted by the Open Data Institute which revealed that 70% of UK companies using open data are micro enterprises - those with less than 10 employees.

 

Open Data Challenges

Although the open data movement is rapidly expanding, there are still certain challenges and limitations involved for businesses. This was demonstrated by the fact that 11,481 datasets from the government's open data site Data.gov.uk were not downloaded in 2016; a figure that represents nearly a third of the entire collection.

One of the biggest problems is the often time-consuming process of collating data from different sources and manually entering it into your own CRM or similar. As is shown in the graph below taken from HubSpot’s 2017 State of Inbound report, 32% of companies say their sales staff currently spend in excess of an hour on this kind of thing every day.

 

 

Other factors involved in open data that are preventing some companies from using it include:

  • Outdated or inaccurate information

  • Sudden changes to its availability

  • Difficulty ascertaining an original source

  • Trouble locating specific files
     

A New Era for Company Data

If you're looking for company data in order to qualify leads or check up on your competitors, the newly-opened directory from Global Database is ideal. It offers details on 4 million UK companies, including profit and loss accounts, balance sheet and cash flow, technology insights, employee details, group structure and more. Unlike many open data platforms, the data is regularly updated and verified by humans to ensure accuracy, and the information is presented in a simple and easy-to-read way.

 

While open data is currently underused in business, it offers a number of benefits for companies wishing to get in on the ground floor and start exploring the movement now. As with any new technology, it's important to note that there are certain limitations involved. Getting a good idea of how accurate and relevant your open data source is is vital in order to avoid potential negative impacts further down the line. If it's company data you're after, the recent opening of Global Database's directory is an excellent place to start to search any UK company free of charge.