Decentralized informationexchange anatolymelamud

Anatoly MelamudDecentralized, Reciprocal Information Exchange(Business Information Sharing between Organizations)

http://AnatolyMelamud.com

Why reciprocal, decentralized sharing?

• Cloud computing led to the business information movement from “on premise” data centers to the SaaS platforms. Amazon WS, SalesForce.com, SAP, Oracle, Intuit established application marketplaces with uniform web access to the business data. The data access cost has decreased significantly.

• Privacy and data security are among the first considerations of organizations establishing data exchanges. The centralized data sharing has fundamental problem in retaining and sharing of multiple copies of data – the source copy, the copy with the centralized organizations operating the exchanges (example: Equifax, Experian, D&B, Lexis Nexis), and copies of third parties for their analytic functions

• Reciprocity is a motivation/driver for the information sharing between financial, marketing, trading, and health organizations. The reciprocity requires “de-identification” of the data sources provided that the data sources are controlled through contracts and trusted (example, Small Business Financial Exchange)

• Decentralization improves data security : data does not leave its decentralized location


Examples of the SaaS cloud marketplaces with access to the SaaS users and their business data


SalesForce AppExchange


Intuit Marketplace

Oracle Cloud Marketplace


Current state of data exchanges

• All existing business data exchanges are “centralized” by large, trusted companies such as, for example, D&B, Equifax, Experian, Lexis Nexis.

• The centralized architecture has inherent data security issues with retaining and sharing of multiple copies of exchange data – the source copy and the copy with the companies operating the exchanges

• The centralized architecture is impacted each time a new business rule or policy at the source companies change

• The centralized exchanges are expensive due to the data security and data maintenance operations

• It is burdensome and costly for the data providers to set up and secure multiple large data submissions to different companies (D&B, Equifax, Experian), especially if those entities require different data formats. This is particularly inefficient when the centralized entity perform substantially similar data quality analysis

• Unnecessarily sharing of data for purposes other than data exchange (ex., marketing) erodes both trust in the confidentiality and support for the exchange.


Benefits of the reciprocal, decentralized solution?

• Decreases cost of information • Increases business community welfare • Improves data security : data does not leave its decentralized location• Decreases the exchange data quality cost • “De-identified”, reciprocal data aggregation and analytics• Reciprocity of the data source : no source identification in the exchange network • Decentralized business and person identification in the network• Democratization of the future digital economy in which nobody is excluded from

participation. No third party should have the ability to interfere in the voluntary dealings of other companies and people.

• Business need example: Centers for Medicare and Medicaid (CMS) issued a final rule for its risk adjustment program that would use a distributed system as a default, changing course from the proposed before centralized model due to the data security

http://www.gpo.gov/fdsys/pkg/FR-2012-03-23/pdf/2012-6594.pdf

Examples of Data Sources for the Decentralized Data Exchange

• Social networks and blogs: Facebook, LinkedIn, Twitter• Business application marketplaces : Salesforce, Intuit, SAP, Oracle, and others• Data exchange examples are: market leads, payment delinquencies, health care

collections, fraud data, product pricing, company data, vendor spend data, environmental data

• Examples of the “existing” data exchanges : Small Business Financial Exchange, National Telecommunication Exchange, Experian Small Business Exchange, D&B, Health Exchanges, and etc.


General rules of the decentralized, reciprocal solution

• In a decentralized exchange, the same information asset maybe at different value between different exchange participants

• The network consists of information assets, nodes of data providers/recipients, and links, which represent exchanges between nodes regardless whether the same information asset is exchanged

• The exchange network structure encompasses several types of decentralization of exchange : bilateral trades; market segmentation; restricted participation

• Exchange participants' payoff depends on the behavior of only those exchange participants with whom he is directly linked. Therefore, the more data providers are involved the higher is the information asset value

• All data sources, participating in the exchange, can send the exchange queries to the distributed exchange agents integrated with the data sources. The agents match (company/person ID) request to the in-house data and then store the ‘de-identified”, reciprocal aggregated/analytical response – rather than copies of the data in the message body

• The message body is a reciprocal aggregation of the responses from all data sources participating in the network


Why now?

• Maturity of the distributed business marketplaces and application exchanges : Salesforce, Intuit, SAP, Oracle

• Maturity of web services with existing exchanges : D&B, Equifax, Lexis Nexis, Experian, and others

• The Internet network bandwidth progress• Maturity of the reciprocal exchanges


Why are we best qualified team?

• 15 years of experience building reciprocal data exchanges for Equifax :– Small Business Financial Exchange– National Telecom Exchange


Decentralization is not free

• Decentralized exchange is inherently slower than unilateral • The exchange members must agree on the mutual reciprocity• The exchanges are limited to participants that sign some kind of real-world

contract to honor them in a way that makes them legally enforceable• Require some kind of security deposit to be confiscated in case of breach of

contract• Mutual trust is built into social networks such as LinkedIn

“Agent” Interfaces - ID/matching- Aggregation- Analytics

Sales Force CRM appexchange• Accounts • Contacts • Leads• Products

Application Marketplaces and existing “centralized” exchanges host the distributed “agent” web services and applications adapted to the data sources. For example, the salesforce agent is written in APEX and deployed as the salesforce native application

Social Business Networks• Profile Management• Collaboration • News

SAP/Oracle/Intuit marketplaces• Payments • Spend• SRM• ERP

Existing Exchanges• D&B• Equifax• Experian• Lexis Nexis


Metadata and ETL

ETL for data sources are automatically generated from the metadata specification

Search/Match

Commercial and Principal (Person) search match

Data Aggregation and Analytics

Data normalizationKey generationSearch IndexesMatch rules USA and UK

- Relationships between companies

- ID clustering and link generation

- Time series and state- Data Source linking

Distributed Agent Software Features (Web Services)

Data parsing and validationCompany NamePerson NameAddressGovernment IDs

- Analytics- Scores- Reports

Metadata library and data validation rules


Opportunity

Network effects• Critical mass of B2B users on existing exchanges and application

marketplaces• ID Management to link all sources of the business data• ERP/CRM/Health exchange users share information in the “secure”,

distributed, and reciprocal networks

Application Marketplaces (SalesForce, Intuit, SAP, Oracle) • Users and application developers become part of the value chain • Content and services are linked together by the distributed agents

written in “native” systems using matching/ID management

Data aggregation and analytics for data exchanges• Business Intelligence• Statistical models and scores• Reports


Decentralized informationexchange anatolymelamud

Software

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