Platforming - what can NGOs learn from AirBnB and Amazon?

Tuesday, May 30, 2017

Cash programming is being used by operational agencies and donors to revolutionise the entire humanitarian sector. Cash has opened issues regarding accountability and choice, and made us rethink the levels of trust we have in those we serve and the levels of control we impose in return.

We continue to pivot the cash programming model, constantly looking for improvements, but we are still missing something. Even the cash evolution is not enough to truly put people at the centre of our humanitarian work. I believe that harnessing the power of technology to transform the humanitarian sector’s outdated business model will bring about the needed seismic change. 

In 1955, Fortune Magazine listed the 500 largest companies. Then, technology that enables the creation of platforms “happened”’. Today only 12 per cent of those companies still remain.

From publishing to hospitality, banking and transportation, technology has revolutionised the way the private sector generates value and how they organise themselves to do it. In comparison, the humanitarian sector has, for the most part, remained largely untouched by the change in technology.

Platforms are not a new thing. In the private sector, malls have linked consumers to merchants, and newspapers have connected subscribers and advertisers for years. What has changed in the past years is the use of technology to make it quicker and cheaper to connect with the users of the platform. This in turn has enhanced the ability to capture, analyse and exchange huge amounts of data. Today, data equals income.

This technological advance has enabled whole industries to move from being a pipeline to being a platform. Think Airbnb, Amazon, Uber, Apple’s iPhone. These companies are no longer organised in a linear value chain model to transform inputs into outputs. They are networks that generate high value transactions between their members. The rise of platforms is transforming competition in the private sector and reducing the number of actors in any given industry – such as Borders Books, Kodak, Blackberry.

Rethinking business models

Humanitarian agencies like World Vision are rethinking their business models, but for some the change is not fast enough. Recently Rutger Bregman  called for “getting rid of the vast industry of paternalistic bureaucrats [and] hand over their salaries to the poor they’re supposed to help”. The writing is on the wall: it is time technology transforms the humanitarian sector.

The humanitarian community has intuitively identified the need to move in the platform direction. Last year saw the birth of two platform-like ideas: the Collaborative Cash Delivery Platform for NGOs, and the Humanitarian-2-Humanitatrian (H2H) network. But we still haven’t seen the uprooting change that the hospitality or publishing industry experienced. Why?

The problem is our aid business model. Humanitarians still see aid as a pipeline where we produce a product that is managed from one end to the other. We constantly refer to “delivering assistance” as if it was an artefact – because for the most part that is what we have been doing, delivering things. In contrast, a platform is more than an aggregation of pipelines for common delivery of products. A platform recognises its biggest asset is not the real estate nor the intellectual property, it is the intangible network of people who need services and those who can deliver them. A platform is more than a pact of no competition or coordination for information sharing, it is a true transformation of the supply chain.

For a business to use technology to effectively transform into a platform it has to change two main things: its assets and supply chain. Point in case, Airbnb and Amazon.

Airbnb is worth 25 per cent more than hospitality giant Hilton, and is growing at a faster pace than any other hotel chain. Airbnb added 229,000 rooms to its business last year, yet they don’t own a single one of them. Airbnb revolutionised the hospitality industry because it transformed the assets that form the core of its ability to produce value. The real asset in Airbnb is the network itself – the community and the resources its members own and contribute to, be it rooms or ideas and information.

The value of data

From this lens, humanitarian NGOs have a lot in common with platforms like Airbnb. Actually, we are in the same business – user data. Platforms like Airbnb capture, analyse and exchange huge amounts of data. We tend to do the same, particularly in cash programming where we collect a wealth of data from beneficiaries to avoid inclusion errors and to connect them to financial service providers. We currently use this data mainly to manage risk, but the humanitarian cash sector is starting to recognise the power of it as an asset.

Are NGOs ready to transform data into our most valuable asset? Despite existing standards on data protection, some might say we are nowhere near being ready. Others might say the tech tsunami is imminent so we need to make ourselves ready.

I’m in the second camp. I think we need to globally agree on a set of standards to protect the use of the data we collect from the people we are trying to serve. We should then build on top of that the right technical solution that will enable us to bring immediacy to the way we interact with beneficiaries. A principled approach to technology will enable the transformation of aid from a pipeline to a platform.

When this change happens in cash programming, NGOs will no longer be valued by their ability to link with a financial service provider to deliver a cash grant, but by the amount and type of information they collect from beneficiaries and how they use it. NGOs will be valued not only by the amount of cash grants they manage to disburse, but by the size of their networks and the positive connections made between actors in each particular environment while delivering the cash grant (be it beneficiaries, local NGOS, private sector, government, etc.)

This idea is equal parts inspiring and terrifying. World Vision recently produced an excellent discussion paper on Data Protection, Privacy and Security summarising the main concern around new technologies: “We must understand these technologies and assess their utility and potential risk to our beneficiaries with regard to information security and privacy while preserving the highest possible ethical standards.”

How far are we willing to go in this transformation? 

A platform approach

To briefly share the obvious, the quantity of publicly available information about individuals to be found online is vast. Every action we take on a platform – social or commercial – doubles as data collected to understand our individual tastes to predict what we will like or need in the future. Amazon, for example, knows what I need to buy before I buy it.

Amazon alone is worth more than all major publicly traded department stores in the United States. Amazon is not valuable because they do logistics, they are big because they collect and analyse data about my needs that makes my user journey profitable to them and enjoyable for me.

Now, imagine if humanitarians responsibly analysed the information we collect anyway on beneficiary needs, and used it to understand them and their contexts so well we would know what beneficiaries need before they need it. We could deliver our accountability to beneficiary commitments by using the time vulnerable people already invested in participating in our programs to improve the service we provide to them.

This is going beyond emergency preparedness, it is about transforming our supply chain to generate value where it is most needed. It is moving from a pipeline approach that creates value by optimising every step of the supply chain, to creating value through timely and relevant interactions.

This would shift the focus of humanitarian operations from optimising the cost efficiency of processes and systems that start and stop with every response, to forming a network of ongoing community engagement that is truly protective, predictive and responsive to community needs.

A platform approach to our humanitarian work in cash transfers has the potential to shift the incentives for growth by localising the drivers of humanitarian response and organically merge humanitarian and long-term development operations.  

I am not saying that this platform idea is flawless or complete. Is it only feasible for cash programming or could it be useful for the whole sector? How do we marry data protection, cyber security and humanitarian principles into operational standards?  How do we ensure non-humanitarian actors protect data they collect from the vulnerable people we aim to serve? Despite all these questions this is a digital era of unprecedented technological advancement that could enable us to address the terrifying and unprecedented scale of humanitarian needs.  

Technology has made it possible for platform businesses to bring together people that need something with people who can provide it in immediate high value exchanges. That same technology is available to the humanitarian sector – how do we use it to deliver an Agenda for Humanity relevant for 2030?

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