transparency will be the only way companies can earn public confidence: we don’t trust anything they tell us. A ‘don’t trust us, track us’ strategy in which regulators will have unfettered access to the data would help earn that confidence.
Medfield, MA (PRWEB) June 7, 2010
A leading Web 2.0 strategist argues situations such as the BP offshore oil disaster can only be prevented or managed with a new Web-based “Regulation 3.0” approach. In an op-ed in this week’s Federal Computer Week, W. David Stephenson, principal of Stephenson Strategies (Medfield, MA), says the shift would simultaneously allow real-time governmental and public monitoring of rapidly-changing conditions while also helping companies improve their operating efficiency.
Stephenson has a global reputation for demonstrating how real-time access to data and new tools to analyze it can transform all aspects of business, government, and daily life. “I call this ‘Regulation 3.0’ because it capitalizes on aspects of the emerging Web 3.0, in which everything will have its own Internet address and therefore can be directly monitored and controlled remotely via the Web,” he wrote.
Regulation 3.0 would give federal and state regulators direct, real-time access to the exact information the companies get. The same system would help the companies improve their operations. He said the approach was equally applicable to other regulatory controversies such as oversight of the TARP loans by banks.
Stephenson says what’s called “structured data” makes such a shift possible today. Structured data is somewhat like a bar code, in that information about the information is permanently attached to data through “tags” such as those in the eXtensible Markup Language (XML). Tags give the data context and also mean it no longer must be manually updated or pasted elsewhere – data automatically and instantly flows anywhere those same tags are inserted.
Applying the combination of structured data and “Internet of Things” to the BP disaster would allow monitoring every part of the rig’s safety system individually, and, most important, in real-time. It could have revealed the battery, defective blowout protector and other problems contributing to the failure. A procedure could have been designed using the system so regulators could have automatically shut down the rig when it failed the pressure test, rather than leaving that decision to BP.
Stephenson spent 20 years as an award-winning environmental crisis manager. Drawing on that experience, he wrote that “transparency will be the only way companies can earn public confidence: we don’t trust anything they tell us. A ‘don’t trust us, track us’ strategy in which regulators will have unfettered access to the data would help earn that confidence.”
He stressed that “Regulation 3.0” would also have direct benefits to regulated companies. “The same structured data would let them coordinate and integrate to an unprecedented degree not only internal operations but also those involving suppliers and customers. All users could have the same real-time data access and capitalize on worldwide, open standards for integrating it into their own operations, facilitating interoperability.”
Counter-intuitively, while improving agencies’ ability to regulate fast-changing industries such as oil and banking, “Regulation 3.0” would also make compliance much less costly and laborious for companies. The structured data would automatically flow to every agency instead of having to complete old-fashion agency-by-agency forms. In the Netherlands, where such a unified, automated reporting system has been in place for five years, the average company can cut compliance costs by 25%.
Stephenson said the foundation for “Regulation 3.0” is already in place. The SEC has begun a phased-in program requiring all publicly-traded companies to file their reports using XBRL, a business-oriented XML subset that is currently being extended to include oil-industry-specific tags. Companies already using XBRL for SEC reporting will get more benefit and amortize that expense if they begin to use it in additional ways.
Relying on quarterly and annual reports to regulators made sense back when aggregating and reporting data was arduous and costly. Using structured data tools, reporting can largely be automated and integrated into a company’s daily operations, and even made on a real-time basis where necessary.
Stephenson is currently writing Data Dynamite: unleash information to transform our world, describing the benefits of a data-centric society and economy.
The op-ed may be found at http://fcw.com/articles/2010/06/07/comment-david-stephenson-regulation-transparency.aspx
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