Switch to open data could save companies $10B annually
A switch to standardized, open federal data formats could save U.S. companies roughly $10 billion in annual compliance costs, according to new research.
The practice of replacing document-based reporting with standardized and open data formats, or standard business reporting (SBR), would reduce compliance costs and allow for the implementation of software that could remove much of the current complexity and overlap in the regulatory process, Hudson Hollister, interim president of the Data Foundation, told FedScoop this week.
“Standardizing data saves so much time and money,” Hollister said. “If policymakers make changes to the way they interact with the private sector, it will probably eliminate most manual compliance tasks. There will be more investment in what companies do and help lift people out of poverty.”
According to a 2014 study by the National Association of Manufacturers, current federal regulations cost private companies roughly $2.03 trillion per year.
Hollister said the $10 billion figure reflects the early-stage estimated savings of an SBR program, although it would depend on varying factors of implementation, he said.
Hollister’s comments Monday to FedScoop coincided with the release of a report by the Data Foundation and PricewaterhouseCoopers that found a switch to SBR in the U.S. would not only significantly trim regulatory costs but also reduce or eliminate repetitive reporting systems.
The report, “Standard Business Reporting: Open Data to Cut Compliance Costs,” analyzed the governments of both Australia and the Netherlands, both of switched to SBR in the past 15 years.
SBR saved Australia’s government and private sector a combined $832 million in 2015-16, a figure the report’s authors predicted will continue to rise as the nation’s SBR efforts expand.
Australia’s GDP in 2013 was $1.5 trillion, roughly 10 times less than that of the U.S.’s $16 trillion. The Netherlands, which has an SBR program dating back to 2002, has reduced its unique data elements to roughly 4,500 from hundreds of thousands and automated many financial statements and tax declarations, among other regulatory filings.
The report’s authors admitted that a U.S. SBR program would face more challenges than that of the Netherlands and Australia simply because of the exponentially larger economy and compliance costs.
