Wednesday Mar 28, 2012

XBRL - Moving from Production to Consumption


Here's an update on what’s new with XBRL and how it can actually benefit your organization versus adding extra time and costs to financial reporting.  On February 29th (leap day) of 2012 I attended the XBRL and Financial Analysis Technology Conference at Baruch College in NYC.  The event, which attracted over 300 XBRL gurus and fans was presented by XBRL US, The New York Society of Security Analysts’ Improved Corporate Reporting Committee, and Baruch College’s Robert Zicklin Center for Corporate Integrity.  The event featured keynotes from the U.S. Securities and Exchange Commission (SEC), and the CFA Institute as well as panels covering alternative research tools and data, corporate reporting to stakeholders and a demonstration of XBRL analysis tools.  The program culminated in a presentation of the finalists and the winner of the $20,000 XBRL Challenge.   


Some of the key points made in the sessions included:


The focus of XBRL tools is moving from production to consumption.


As of February 2012, over 9000 companies are reporting in XBRL, with over 10 million facts filed to date


XBRL taxonomy extensions have dropped from 27% to 11% making comparisons easier


The SEC reports that XBRL makes it easier to analyze disclosures, focus on accounting issues


XBRL is helping standards-setters like the FASB speed their analysis of impacts of proposed accounting rule changes


Companies like Thomson Reuters report that XBRL is helping speed the delivery of data to clients


The most interesting part of the program though, was the session highlighting the 5 finalists in the XBRL Challenge competition and the winning solution.  The XBRL Challenge was launched in 2011 as a means of spurring the development of more end-user tools to help with the consumption of XBRL-based financial information.       Over an 8-month process handled by 5 judges, there were 84 registrants, 15 completed submissions, 5 finalists and one winner of the challenge.  All of the solutions are open-sourced tools and most of them focus on consuming XBRL-based data.  The 5 finalists included:


Advanced XBRL Processing from Oxide solutions – XBRL viewer for taxonomies, filings and company data with peer comparison capabilities.


Arrelle – API for XBRL processes, supports SEC Validations, RSS Feeds to access filings etc.


Calcbench – XBRL data analysis tool that can be embedded in other web applications.  This tool can combine XBRL filings with real-time market data.


XBRL to XL – allows the importing of XBRL data into Microsoft Excel for analysis, comparisons.  Users start on the web and populate Excel with XBRL data.


XBurble – allows users to search and view XBRL filings, export to Excel, merge for comparison, and includes a workflow interface.


The winner of the $20,000 XBRL Challenge prize was CalcBench.  More information about the XBRL Challenge and the finalists can be found at www.XBRLUS.org/challenge


XBRL for Sustainability Reporting – other recent news on the XBRL front was the announcement by the Global Reporting Initiative (GRI) of an XBRL taxonomy for Sustainability Reporting.  This taxonomy was co-developed by the GRI and Deloitte and is designed to make the consumption of data found in Sustainability Reports much easier.  Although there is no government mandate to file Sustainability Reports in XBRL format, organizations that do use the GRI guidelines for Sustainability Reporting are encouraged to tag and submit their data voluntarily to the GRI – who will populate a database with Sustainability Reporting data and make this available to the public.  For more information about this initiative, you can go to the GRI web site:  www.globalreporting.org.


So how does all of this benefit corporate filers and investors?  Since its introduction, the consensus in the market is that XBRL has mainly benefited the regulators and investment analysts who need to consume and analyze large volumes of financial data.  But with the emergence of more end-user tools for consuming and analyzing XBRL-based data, and the ability to perform quick comparisons of one company versus its peers and competitors in an industry group, will soon accelerate the benefits to corporate finance staff, as well as individual investors.  This could apply to financial results tagged in XBRL, as well as non-financial information such as Sustainability Reporting – which over the long-term will likely be integrated with financial reporting.   And as multiple regulators and agencies in a country adopt the XBRL standard for corporate filings, more benefits will accrue as companies will be able to leverage one set of XBRL-based financial data for multiple regulatory filings.    


For more information about the latest developments in XBRL, check out the XBRL US or XBRL International web sites:  www.xbrl.org, www.xbrlus.org.


For more information about what Oracle is doing to support XBRL, here are some links:


http://www.oracle.com/us/solutions/ent-performance-bi/disclosure-management-065892.html


http://www.oracle.com/technetwork/database/features/xmldb/index-087631.html


Feel free to contact me if you have any questions or need more information:  john.orourke@oracle.com

Monday Dec 19, 2011

EPM Resolutions for 2012


With 2011 coming to a close and 2012 quickly approaching, many organizations are wrapping up their plans for the New Year.  While 2012 planning may be mostly financial in nature, organizations should also think about setting some goals and objectives for how they can improve their performance management processes.  With that in mind, here are my top 10 recommendations for EPM/BI process and system resolutions for 2012:


Streamline the period-end close.  With increasing regulatory and stakeholder reporting requirements like IFRS and Solvency II, many organizations spend too much time and resources on the financial close and reporting process.  Review your process and look for areas that continuously present hurdles or bottlenecks – such as data integration, account reconciliations, regulatory reporting, and XBRL-based filings.  These low-hanging fruit could be ripe for review and updating and targeting with software solutions that can help shorten the entire close and reporting process, like at Menzies Aviation.


Bring XBRL tagging in-house.   When first adopting XBRL, most organizations have chosen to outsource XBRL tagging to third party publishers.  But as detailed tagging of footnotes and disclosures drives up the cost of outsourcing, and organizations realize they can’t make last-minute adjustments to their filings – many are bringing XBRL tagging and filing in-house.  Integrating XBRL tagging with the financial close and reporting process, like StealthGas, can reduce the costs of outsourcing, improve accuracy and increase your ability to accommodate last minute changes.


Align planning processes.  Many organizations suffer from planning processes that aren’t aligned across functions and are supported by disconnected spreadsheets.  Look for ways to better integrate long-term, strategic planning with financial budgeting as well as operational planning.  Reel in processes that still rely on spreadsheets and use web-based software applications to eliminate time and resources spent on data collection and aggregation.  Connecting strategic, financial and operational planning like Societe General will also help improve resource alignment across the organization. 


Focus on forecasting.  Most organizations still have an annual budget process, but many are placing less focus and effort on this and are relying more on monthly or quarterly forecasts to update planning assumptions and implement changes to operating plans.  The rolling forecast technique is being utilized by many organizations like Sunshine 100 Real Estate to maintain a steady view of the business 4 – 6 quarters into the future.  This approach increases business agility and ensures better utilization of resources.


Leverage predictive modeling techniques to improve forecast accuracy.    Predictive modeling is being used in business forecasting by leading edge companies like Ingersoll Rand to bring statistical analysis and techniques such as Monte Carlo simulations into the mix.  These techniques can augment the forecasting be performed by line managers and can be used to validate those forecasts based on historical information, and to produce a broader range of outcomes to consider in decision-making. 


Get more granular on profitability and cost analysis.  Many organizations rely on corporate-level or divisional views of profitability and don’t regularly allocate revenues and costs down to the individual product, service or customer levels to understand which lines of business are adding or detracting value from the business.  Having a repeatable, accurate process and system for allocating revenues and costs, like Shenhua Gouhua Power, can reveal hidden insights about which parts of your business are truly profitable and which aren’t.  It can also help in allocating resources, adjusting pricing or customer service programs, or driving marketing campaigns.


Integrate sustainability reporting with financial reporting.  To address increasing stakeholder demand for more detailed disclosures regarding energy usage and carbon footprint, many organizations are producing a sustainability report or voluntarily submitting data to organizations such as the Carbon Disclosure Project (CDP).  However the processes used to collect, aggregate and report this type of information is often manual – relying on spreadsheets, email and other processes which are unreliable.  Leverage existing business processes and systems like Dong Energy to collect, consolidate and report sustainability metrics and ensure that the non-financial information you are providing to stakeholders has the same level of accuracy as the financial results.


Centralize enterprise dimension management.  If your organization is maintaining dimensions and hierarchies such as charts of accounts and organizational structures in multiple systems, this would be a great time to centralize the management of this information. Centralizing and automating enterprise dimension management like Anglo American can lead to better IT governance, reduced costs, more consistency in reporting and high return on investment by eliminating manual, redundant administration across EPM, BI and ERP applications.


Standardize business intelligence (BI) tools.  Most large organizations have a variety of BI tools and data delivery systems and processes being utilized across different departments, business units and functions.  This often leads to different versions of the truth, duplication of effort, and higher support costs for IT.  Organizations like Presider and Home Credit Group that are standardizing BI tools and information delivery are able to improve user productivity, ensure more consistency in decision-making, and reduce costs of ownership and maintenance for IT.


Last but not least – go mobile!   Don’t be left behind – Gartner predicts that 33% of BI will be consumed on mobile devices by 2013.   Most of today’s BI tools provide support for deployment on today’s popular mobile devices.  Think about the mobile road warriors are in your business who can most benefit from having management dashboards and key metrics delivered to them anytime, anywhere to improve decision-making and customer service.


I hope these resolution suggestions give you some ideas to think about for your organization.  Best wishes for the holidays and continued success in 2012!

Wednesday Nov 09, 2011

What's New with XBRL?

The answer is – quite a bit!  Over the past 2 months I had the chance to attend and speak at the XBRL US Conference in Nashville, as well as the XBRL International Conference in Montreal.  The adoption of XBRL as an electronic standard for business communications is accelerating around the world, with many companies adopting it for financial reporting and many new projects underway.  Here are the highlights and key points I took away from the two conferences.


XBRL US Conference – The XBRL US National Conference for 2011 was held in Nashville September 26 – 27th at the Gaylord Opryland Resort.  The conference had about 300 attendees, roughly half of which were accounting/finance staff from corporate filers, and the rest representing vendors, consultants and service providers.  Before the conference started, XBRL US held its Committee and General Members meetings.  The conference agenda included general sessions with keynotes and panel discussions on various topics, as well as XBRL Essentials Training sessions for corporate filers.


Some of the highlights from general sessions included:



  • Public Company Viewpoint – Frank Brod – Chief Accounting Officer, Microsoft

  • Regulatory Viewpoint - Mike Starr - Deputy Chief Accountant, US SEC

  • XBRL Panel:  Beyond the SEC - Corporate Use of XBRL to Communicate with Other Regulators, Industry Groups and Other Stakeholders

  • XBRL Panel:  Investor Communications

  • Corporate Competitive Analysis Panel

  • Corporate Actions Panel


Key takeaways from the sessions included:


By integrating XBRL with the financial close process, Microsoft reduced the reporting cycle – released earnings sooner, 10Q on day 20, late changes to filings are supported through in-house projects.  Microsoft filings posted in HTML on Investor Relations site, with XBRL data source  


The US SEC says there will be 6500 active filers by the end of 2011, 8300 when all are phased in.  Foreign filers are waiting on the IFRS taxonomy to be approved – SEC anticipates approval of IFRS taxonomy in first half 2012.  Concerns:  detailed tagging, concurrent filings, capacity.  Benefits:  easier analysis, identify outliers, easier to consume disclosures, more software licenses.  Trends:  costs will drop, in-house tagging will increase, more authoring and consumption tools, industry group standards, clearer disclosures.  Expectation that industry extensions and disclosure formats will standardize over time.


XBRL has made it easier for regulators like the FDIC to consume and analyze bank filings.  Easier for the banks to file since XBRL handles many calculations


Corporate filers expect to see more benefits when XBRL can be used to file with multiple agencies/regulators.  In other countries, Standardized Business Reporting (SBR) efforts are yielding results with multiple agencies either mandating XBRL or accepting on a voluntary basis – i.e. Australia, Belgium etc.


Aggregators are using XBRL data – massaging to provide consistency across companies, analysts and investors starting to leverage XBRL data directly and from aggregators.  Some concerns about data consistency with extensions.  Tagging of earnings press releases would be helpful to investors and analysts.  Industry taxonomies will help improve comparability.


XBRL Essentials Training classes included:



  • Essentials Basics:  Seleting the Right Tag

  • Essentials Basics:  Checking Your Work

  • Essentials Basics:  Managing the Process

  • Essentials Basics:  XBRL Controls Process

  • Essentials Advanced:  Getting into the Details – With Detailed Footnote Tagging

  • Essentials Advanced:  Outsource vs. In-House XBRL Creation

  • Essentials Advanced:  Crossing the Finish Line – Process, Timing and Quality Control

  • Essentials Advanced:  What Comes Next:  Transitioning to a New Taxonomy Release


This conference has grown substantially over the past few years and now has a critical mass of corporate filers who are attending to get information on XBRL and attend the XBRL Essentials training.  Here’s a link to videos of the keynotes, and copies of all of the presentation and training materials:


http://xbrl.us/events/Pages/natconf2011/schedule.aspx


XBRL International Conference - The XBRL23 International Conference was held in Montreal, Canada October 25 – 27th at the Le Sheraton Centre.  The theme for the conference was “Enhancing Business Performance”.  The conference had about 300 attendees, including regulators, banks, agencies, and XBRL practitioners from the US, Canada, Europe and Asia. 


The conference started with the XBRL International Committee meetings on Monday, then conference sessions and exhibits Tuesday through Thursday.      Here are some of the session highlights:



  • The State of XBRL International

  • Roadmap to XBRL Adoption in Canada

  • UAE:  Securities and Commodities Authority Implementation Project

  • IFRS Convergence in Canada and the IFRS Taxonomy

  • The Implications of XBRL for Financial Statement Audit

  • Update on XBRL Activities at the IASB and IFRS Foundation

  • Risk, OCEG, GRC-XML, Solvency II

  • Launch of the XBRL Abstract Model as Public Working Draft

  • Standard Business Reporting:  SBR and IFRS

  • Deeper XBRL – XBRL’s Global Ledger Framework

  • Climate Change Reporting Taxonomy – Towards Integrated Reporting

  • Improving the Usefulness and Relevance of XBRL-Tagged Data

  • The Evolution to Integrated Reporting

  • First Canadian end-to-end XBRL Implementation – Deposit Insurance Corp.

  • Corporate Actions Project Panel

  • Insurance Project:  Bermuda Monetary Authority Case Study – including Solvency II

  • Global Reporting Initiative Taxonomy

  • Tax Project:  Creation and filing of Inline XBRL in the UK

  • Integrated Reporting in South Africa

  • US GAAP Taxonomy Project:  FASB Best Practices


As you can see from the session list above, there are many different XBRL projects underway around the world, and some of them overlap – i.e. Climate Change Taxonomy vs. GRI Taxonomy for Sustainability Reporting.  There were a number of sessions on Integrated Reporting and how to combine financial statement information with non-financial data tagged in XBRL with different taxonomies.  A number of countries are moving forward with Standard Business Reporting (SBR) where multiple regulators are adopting the XBRL Standard (e.g. Belgium, Netherlands, Australia).   There is also growing interest in Solvency II with the EIOPA mandate (European Insurance Occupational Pensions Authority).


Here’s a link to the XBRL International web site where you can find additional information these global projects:  http://www.xbrl.org/


What’s Oracle up to regarding XBRL? 


Oracle is providing solutions to support both the production and consumption sides of XBRL.  On the production side, we provide Oracle Hyperion Disclosure Management and on the consumption side we have the XBRL Extension for Oracle Database 11g.  Information about these solutions can be found on the Oracle web site:


Oracle Hyperion Disclosure Management: http://www.oracle.com/us/solutions/ent-performance-bi/disclosure-management-065892.html


Oracle Database XBRL Extension:  http://www.oracle.com/technetwork/database/features/xmldb/index-087631.html


I hope this information is helpful – let me know if you have any comments or questions.

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This blog will highlight key EPM market trends, recent events and other news of interest to our field, customers and partners.

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