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Why you should collaborate with competitors when it comes to data

(Image credit: Image Credit: StartupStockPhotos / Pixabay)

However, perhaps comparing data to oil is misguided: it implies that only the entity that owns the drilling rights will benefit from the data. This leads companies into thinking that they must hoard data for themselves.

Instead, perhaps we should think of data as a common good. For businesses across industries and geographies, you can generate far more detailed insights by collaborating with your competitors and sharing your data, rather than by keeping it under lock and key. As a result, these insights and discoveries will benefit your business immensely.

Now, this idea may sound like heresy to business professionals. Why give away a competitive advantage by sharing your data?

But by taking information and data from an industry, sharing it and sorting through it to find patterns, your company can learn things such as who the best suppliers are, in which areas your firm is spending dramatically more than its peers, or whether your business is exposed to fraud.

Using data in this way produces what we call “community intelligence” — the wisdom that emerges when individuals are willing and able to share information dynamically.

Consumer confidence

Community intelligence is not a new concept. This community-focused approach to sharing knowledge is already widely utilized in the consumer market.

For instance, services such as Google Maps use passively collected consumer data to assess traffic on various travel routes, and companies like Amazon and Airbnb rely on consumers providing reviews so that other users can make an informed purchase.

Another example is the navigation app, Waze. By leveraging the passive real-time data provided by a broad community of users (specifically, drivers) at once, Waze is able to paint an accurate picture of road conditions, delivering the most accurate, up-to-date driving route information to anyone using the app or its technology within another service.

Using community intelligence, B2C companies can respond quickly and remain agile by continuously course-correcting depending on what the real-time customer data is saying at any particular time.

For example, Amazon actively encourages customers to leave reviews of the products they’ve bought, which in turn informs other consumers and helps them plan their spending. But the reviews also provide a secondary benefit of helping Amazon itself provide better products and services to its customers. A product that performs poorly in reviews may be pulled from Amazon’s supply chain, while a seller who receives consistently poor customer feedback might be kicked off the platform.

In general, consumers have been happy to provide this data freely because they trust their privacy will be kept safe, it takes little effort on their part, and they understand the value they gain from it in return. Clearly, B2B businesses can learn something from the consumer market.

Intelligence in action

So how can companies generate and benefit from community intelligence in the same way as consumer businesses have been able to? Businesses cannot simply publicly post their data online, as this information may be private, confidential or commercially sensitive. However, the technological capabilities now exist to collect data anonymously on a scale not seen before.


Using platforms such as Coupa, artificial intelligence can trawl through vast amounts of data on suppliers, invoices, salaries and more, then anonymize it and share the aggregated data with a community of other businesses. Any business within that community can then get access to the insights this data generates. AI software can share recommendations for improvement, or help companies set realistic targets by benchmarking themselves against industry peers on factors such as how digitized their company is or how efficient their financial systems are. Benchmarking using actual, real-time transactional data is far more accurate and dynamic than the traditional survey-based approach.

Used in this way, community intelligence can inform businesses if a supplier is overcharging, or has a poor delivery record. It can also prove to be a huge help in detecting and eliminating fraud. 

For example, a leading US hospital, Memorial University Medical Center (real name anonymized), had a long-standing relationship with a supplier of x-ray, CT scan, and MRI testing procedures. MUMC realized there was a problem with its supplier when it noticed that other companies had rated the same supplier poorly.

Based on data gathered by community intelligence, MUMC realized that a particular supplier was 10 times more likely to have something wrong with its invoices – from charging too much to double billing. Based on this information, MUMC terminated its contracts with the supplier in question and was able to save $8 million in payments, while finding a better-rated, less expensive supplier to work with.

Clearly, community intelligence can help your business operate more efficiently and save substantial sums of money. It can also help set an industry standard for fairness and opens up a whole world of possibilities.

By analyzing billions of transactions across thousands of companies, and applying AI to analyze the data, businesses can identify behavioral patterns that make it easier to stop a problem. For instance, you could identify risky suppliers before you pay an invoice, or identify fraudulent behaviors inside your own company and take immediate corrective action.

Embrace collaboration

You might be thinking that your company already has a sufficient quantity of data to generate useful insights, without needing to collaborate with competitors. But the reality is that no single organization is likely to have enough data; as the old adage states, “None of us is as smart as all of us.”

There is already a vast amount of data in the world today, and it’s growing exponentially, with an estimated 2.5 quintillion bytes of data produced by humans each day. Businesses around the world are all becoming increasingly data dependent, so unless the community pools and shares its data, individual companies simply can’t see enough of the bigger picture to learn anything that is truly transformative.

Thankfully, the speed at which data is being shared is accelerating, and the insights gleaned from shared data are allowing companies to provide superior services to end users in ways that were unimaginable just two decades ago.

So while it may seem counterintuitive for businesses to share anything that could help their competitors to get ahead, businesses need to stop seeing data sharing as a threat, but rather as an aid.

Helen Trim, Senior Vice President, Coupa Software

Helen Trim is Senior Vice President Marketing, EMEA & APAC at Coupa Software.