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Open Data as Business Model for the Public Sector

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  • This figure illustrates the conceptual approach to this POPSIS study. As pointed out above, the purpose of this study is to assess different models of charging for PSI and their effects based on in-depth public sector body case studies across Europe. Each POPSIS case studies intends to provide solid evidence on the socio-economic impact of the pricing policy by the PSB under scope – both downstream and upstream. The downstream impact side refers to PSI charging policy effects on re-users and end-users. It involves the gathering of market data such as the number of re-users, the FTEs employed by re-users, the emergence of new products such as PSI-based apps or the sales revenues and volumes of re-users. The upstream impact side refers to PSI charging policy effects on the public sector body itself. The PSB impact measurement includes indicators such as the availability of PSI, the quality of the provided PSI, the FTEs employed by the PSB, the provision of new products such as PSI-based apps by the PSB as well as the costs and returns from PSI re-use facilitation for the PSB. Ultimately, the cross-case study analysis should give some indication with regard to the question: “Which PSI charging model works best?”
  • In the following, we present the main findings from the case studies and the cross-case study analysis.
  • Track L Kapff

    1. 1. Open Dataas business model for the public sectorInsights from “POPSIS”Pricing of PSI StudyLionel Kapfflkapff@deloitte.comePSIplatform conference 2012Rotterdam, 16th March 2012
    2. 2. Study approach andmethodology2 © 2012 Deloitte
    3. 3. Upstream and downstream effects of PSI charging models Which PSI charging model works best?3 Open Data as business model for the public sector: Insights from POPSIS /// ePSIplatform conference 2012 © 2012 Deloitte
    4. 4. Case studies overview: 21 Public Sector Bodies covered POPSIS objective A: POPSIS objective B: Changed charging policy Cost-recovery policy Business registers IT: Infocamere NL: KvK UK: Companies House Geographic AT: BEV DE: SenStadt information DK: DECA DE: BKG ES: IGN-CNIG IT: Italian Cadastre ES: Spanish Cadastre NL: Dutch Cadastre FR: French Cadastre UK: Ordnance Survey Meteorological NL: KNMI DE: DWD information NO: SI: ARSO Other PSI domains DE: DeStatis (statistics) FR: SIRCOM (fuel prices) FR: DILA (legal) ES: CENDOJ (legal)4 Open Data as business model for the public sector: Insights from POPSIS /// ePSIplatform conference 2012 © 2012 Deloitte
    5. 5. Main findings fromcase study analysis5 © 2012 Deloitte
    6. 6. Main findings from the case studies• The case studies show a clear trend towards lowering charges and/or facilitating re- use (16 out of the 21 cases). o Some PSBs only charge for commercial re-use and allow non-commercial re-use either against reduced fees (7 out of 21 cases) or for free (9 out of 21 cases). o In almost all cases, PSBs allow free access to their PSI (viewing without copying). In some cases, free access has been the forerunner of a more flexible re-use regime.• In those case studies where cost-recovery regimes are applied, the calculation basis for determining PSI re-use charges appears to be weak. o In discussions with interviewees, the PSBs concerned were mostly unable to explain the basis for their PSI cost allocation. o In some cases, the setting of charges seems to be oriented towards filling budgetary gaps rather than being geared to the cost-oriented tariff-setting required under the PSI Directive 2003/98/EC.• In all the case studies, the PSI re-use revenues of PSBs range from relatively small to extremely small when compared to the total budget of the PSB concerned. o 10 out of 21 cases have cost recovery ratios of below 1%.6 Open Data as business model for the public sector: Insights from POPSIS /// ePSIplatform conference 2012 © 2012 Deloitte
    7. 7. Upstream effects of lowered charges7 © 2012 Deloitte
    8. 8. Upstream effects of lowered charges• All case studies where PSBs have lowered their prices demonstrate that demand volumes expand strongly (there have been increases of up to 7,000%). o In some cases, PSI sales revenues can remain stable or even increase after drastic price cuts due to the growing demand. o Of course, once charges are zero, revenues are also zero.• Costs appear to increase very little: in fact, they may eventually decrease if the volumes of re-use grow significantly. Once re-use facilitation processes are properly organized, they become sub-routines within the PSB. To a large extent, they become embedded in the PSBs public task-funded activities at no extra cost.• Zero cost pricing has the additional advantage that transaction costs decrease significantly. This decrease applies not only to administrative costs, such as invoicing, but also to costs related to the monitoring of compliance with license arrangements.• Several PSBs have reported that intensified ties with re-users may lead to improved data quality and process efficiency since any deficiencies in the data are promptly flagged up and reported back to the PSB. o When the interest in data quality is shared, quality control is partly outsourced.8 Open Data as business model for the public sector: Insights from POPSIS /// ePSIplatform conference 2012 © 2012 Deloitte
    9. 9. Obstacles to change9 © 2012 Deloitte
    10. 10. Obstacles to change• A large majority of PSBs interviewed do not seem to have fundamental objections to lowering charges. Yet, PSBs that rely on sales revenues from PSI and their own value-added products appear to be stuck in a situation of deadlock: o Although they are sympathetic to lowering charges and allowing more data re-use, their dependency on sales revenues compels them to protect their current revenue streams when there is no other sustainable alternative income stream available. o Such an alternative income stream can often only be provided by the Treasury, since the benefits from lowered charges are often concentrated in the form of increased tax gains. o Thus, the power to enable change does not necessarily lie with the Ministry willing to support the move, let alone with the PSB concerned.• Further barriers to change relate to statutory provisions imposing cost-recovery schemes, the legacy of old re-use regimes, and the sheer difficulty of changing existing practices.• In addition, in several cases, incumbent re-users with considerable interests in the preservation of the status quo are trying to prevent PSBs from lowering charges in order to keep barriers to entry high. o Some re-users are reported as lobbying actively and sometimes even litigating to prevent PSBs from adopting lower charges.10 Open Data as business model for the public sector: Insights from POPSIS /// ePSIplatform conference 2012 © 2012 Deloitte
    11. 11. Conclusions11 © 2012 Deloitte
    12. 12. Conclusions HYPOTHESES: “There is no need for financial stimulation of Open Data policies within PSBs, because it is very easy to create a positive business case for Open Data.”The case study analysis suggests that: • Many PSBs are implementing PSI re-use friendly policies, but shifts to zero-cost policies are relatively rare, notably where valuable datasets are in the “possession of the PSB” (business/meteo/geo). • The shift to genuine Open Data generally requires some kind of stimulus / support:Financial stimulation may be needed where PSBs strongly rely on PSI sales revenuesand own commercial re-use activities. • Finance transition process + compensation for drop in incomePolicy support is needed to overcome obstacles to change. • Convince politicians and PSBs of the benefits of Open Data. • Overcome the lobby of incumbent re-users. • Help PSBs to develop and justify the business case for Open Data.12 Open Data as business model for the public sector: Insights from POPSIS /// ePSIplatform conference 2012 © 2012 Deloitte
    13. 13. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms,each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure ofDeloitte Touche Tohmatsu Limited and its member firms.Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globallyconnected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and deep local expertise to help clientssucceed wherever they operate. Deloittes approximately 182,000 professionals are committed to becoming the standard of excellence.This publication contains general information only, and none of Deloitte Touche Tohmatsu Limited, Deloitte Global Services Limited, DeloitteGlobal Services Holdings Limited, the Deloitte Touche Tohmatsu Verein, any of their member firms, or any of the foregoing’s affiliates (collectivelythe “Deloitte Network”) are, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professionaladvice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision oraction that may affect your finances or your business. Before making any decision or taking any action that may affect your finances or yourbusiness, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoeversustained by any person who relies on this publication. © 2012 Deloitte