BFM2013_4_08_Converging transparency initiatives

Increased transparency is a side-effect of e-government that is already with us.

As an example, consider your pricing approach: what would happen to your customer satisfaction if you were requested to publish all the pricing parameters online on a single, government-sponsored website, where any prospective customers could compare in few minutes your prices and services with the ones applied by your competitors, watching their own Digital TV and using their remote control to switch suppliers?

E-government, like the governance initiatives spurred by Enron (SOX) and others (e.g. Basel III and maybe a future Basel IV), is just part of a common trend toward transforming Adam Smith’s “invisible hand” into a worldwide, shared reality, by using technology to remove asymmetries in information.

By “asymmetries in information” we imply that some economic actors, despite all the non-disclosures and rules on insider trading, always had information that was used to make informed decisions before the rest of the market received the same information.

Sometimes, they had this information because they were suppliers or customers of the investment target, and were just good observers; sometimes, it was just sheer lack; quite often, these factors were compounded by “back door” information.

Increasing transparency will probably remove some intermediaries, as already done by companies like e-bay and industry-wide initiatives to lower the cost of supplies by pooling procurement resources.

A properly working market economy requires a level playing field, and e-government will progressively move further deep inside your organization the threshold for the delivery of “public” information.