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Home Writings	The Meaning of Transparency in Today's Data-Centric World People should be able to ask and answer their own questions without you doing it for them or even anticipating the questions. < A New Feeling at a Concert    Turning Inspiration Into Our Own >
	With the financial meltdown, newly discovered Ponzi schemes, and other problems, the question of how transparent various institutions have been comes up. We are "just finding out" what has been going on for a long time. Heretofore unexplored interdependencies have reared their ugly heads. People ask, "Why didn't we know? What should we do so this won't happen again?" I think that we need to refine our understanding of what it means to be transparent. The classic definition in finance is about disclosing information, and providing accurate, non-fraudulent reports. In today's world people expect, and need, more. Reports are too static and too anticipatory. Today, to be transparent means that you are providing data in such a way that anybody with access can drill down on the data and ask unanticipated questions. They should be able to explore interrelationships that were not thought of by those that provide the data. In the old days, you were doing people a great favor by crunching the raw numbers for them and giving them the "answer" in a report. It was very helpful to have a standard balance sheet and income statement, along with an auditor certifying that it was determined by following "generally accepted" principles. Unfortunately, if you had a question that couldn't be answered from the distilled results provided you were out of luck. If you wanted to apply different accounting principles, or compare, contrast or aggregate at a different level, you were out of luck. Today many people have access to, and know how to use, computer-based tools for analyzing almost any amount of data. With the help of standardized formats and Internet connectivity, almost any form and amount of data may be made available to others with little cost (especially compared to the cost of creating, printing, and distributing the old 4-color glossy reports). Third parties can access data, perform their own analysis and create their own methods for displaying and accessing it, and then make those results available to you. Individuals, companies, and news organizations are "mashing up" data from different sources along with maps and other visualization tools to give us views on situations that were unimaginable previously. A simple case was after the 2009 Super Bowl when the New York Times posted a Flash application that let you see, minute-by-minute, which words were most popular in each state in Twitter tweets throughout the country. You could restrict the display to just words related to advertisements or player's names. You could follow the ups and down of emotion, and state-by-state loyalties, with the swipe of a mouse. Compare that to the old state-of-the-art of the results of a 5-question telephone poll right after the game. More and more companies and other entities are providing their data in raw, but accessible, form. For example, the official guidance for implementing the Recovery Act of 2009 stimulus bill directs some ways to ensure that "the recipients and uses of all funds are transparent to the public." In Appendix 1, it states that "agencies are required to provide a feed (preferred: Atom 1.0, acceptable: RSS) of the information so that content can be delivered via subscription." The guidance then goes on to specify mandatory data fields, such as recipient name, federal funding amount, recipient D&B number, address, and more. Specifying that this is a feed means that this is ongoing, updated data, not just a static report at the start. The report or method to evaluate it isn't mandated as much as the raw data. It is up to others to figure out what the numbers all mean, so different approaches can be applied. We've seen situations such as when the web site www.FiveThirtyEight.com (named for the number of votes in the electoral college), whose mission is "to accumulate and analyze polling and political data in way that is informed, accurate and attractive" was able to come out of nowhere and take the data from many diverse pollsters during the run up to the 2008 U.S. presidential election and give us more valuable and accurate analysis in comparison to what was generally available before. Investors, citizens, and people in other roles now expect to be able to drill down, mash up, and otherwise use data. They will expect it from publicly mandated data, from data companies keep about them, and in their own lives. They have gotten used to using their own old email inboxes and other folders as memory aids to find phone numbers, contact information, and even jokes. They expect to use data companies have the same way they use search engines, and online map and weather services, to answer a myriad of questions unanticipated by the providers. The world has changed. Transparency continues to be important, but what it means has evolved. We've seen what happens when you can't ask questions. Don't just give me the answers, give me the raw data and let me figure it out. - Dan Bricklin, 9 March 2009
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