Private business data is being distributed widely through estimating systems

Jan. 1, 2020
Have you ever read the fine print associated with your current estimating system's "Terms of Usage" in your contract?
Passwater data control privacy issues

Web-based information sharing in our industry obviously has its merits; however, my approach is a cautious one because of the issue of privacy. Have you ever read the fine print associated with your current estimating system's "Terms of Usage" in your contract? If you're like most people, probably not. It basically says the information providers have the right to do just about anything they wish to do with the data they receive through their proprietary network during your estimate uploads. Not that this is nefarious by definition, but it does raise the question of who controls your data and for what purposes.

If you have a business relationship through a direct repair program (DRP) agreement, it has been reluctantly understood that the claim data that is processed through the information provider for a specific insurer will be collected, aggregated and reporting will be resold back to the insurers (and others) about your customers' vehicles repairs, and also your performance to their matrix (see my ABRN column May 2009). However, any data you store in your estimating system that is not uploaded remains your information and completely private. Now with any Web-based product, all estimating data has been effectively uploaded and stored online and then subject to aggregation and reporting. That's not just the claims and estimates that are through a business relationship DRP, but all walk-in customer pay estimates, fleets, and all insurers with or without a DRP business agreement in place.

For the most part, the collision repair industry is a collection of private businesses, which are not bound to release financial data. With the current estimating data being captured – sales (severity), labor rates charged, paint and material charges, P-Page (manual entries) additions, cycle days, supplement ratios and a number of other ratios – I pause to think how this information could be manipulated and/or misinterpreted to portray an inaccurate picture of a given market area.

With online management systems, the data includes all of the above, but adds all cost of goods sold figures as well. Costs for all parts and flagged labor costs are just the basics that will now be accessible for "aggregation and reporting." Some systems today converted to Web-based will also provide the hours actually clocked into each job by every technician, and the total gross pay for every technician.

I was driving with my 20-year-old daughter the other day and I was thinking about this column. I explained to her about the online estimating and management systems our industry is rolling out along with the exposure of the private financial data. Her reply was, "If you don't have anything to hide, why would it be a problem?" Well, she simply missed the point! It is not about "hiding anything." It's about having a privately held business remain private, without the worry of how the data will be used.

Don't misinterpret what I am attempting to point out. I am not saying that technology should not continue to advance. I believe in the concept of Web based or cloud computing because it is in our future. What has become unacceptable is the power and revenue this information has provided to the collectors of our data, how it is being manipulated, as well as used against our industry.

For this reason, I urge every one in the industry to review their data and the terms for its usage. Clearly identifying the terms of usage only makes good business sense. Reporting private business data shouldn't be viewed as an automatic function. Our data should not be shared unless we allow it based on very specific criteria and limitations that we as individual private businesses agree to.

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