Jeff Thomson – Vice President Institute of Management Accountants (IMA) 201-474-1586
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Transcript of Jeff Thomson – Vice President Institute of Management Accountants (IMA) 201-474-1586
Jeff Thomson – Vice PresidentInstitute of Management Accountants (IMA)
201-474-1586
A Practitioner’s Perspective: How XBRL Can Enable Decision Analytics
April 27, 2005
“It’s not the strongest of the species that
survive, nor the most intelligent, but the
one most responsive to change” ….
Who Said It ????
A Practitioner’s Lament: Where were you when I needed you ? ?
XBRL-GL Enablement for Decision Analytics
Newbie Perspective: XBRL Issues and Challenges
IMA’s Role in Transforming Business Reporting
AGENDA
A major telecom successfully implemented two major decision support capabilities PRIOR to the height of their popularity: An integrated set of measures for decision support, planning and
control (aka Balanced Scorecard) Data Mining
But, these successes were not sustainable Punch Line: Future Sweet Spot for XBRL-GL ?
A Practitioner’s Lament
A Practitioner’s Lament (cont’d)
Decision Tool Initial Success
Why Not Sustainable
XBRL-GL enablement
Balanced Scorecard, aka, on-line Dashboard
Deployed in 60 days; financial & non- financial measures: customer, people, operational, financial (“EVA, PVA, CVA”).
Cost prohibitive – integrating transaction & summary data from disparate systems (CFO, HR, etc.)
Tagged relational data easier to source and integrate within a “domain”. Filtering/alarm functionality.
Data Mining Identified quality sales force leads by correlating seemingly unrelated transaction and summary detail across databases.
Cost prohibitive – data reprocessed and transformed. HUGE issue – consistent Customer Identification across databases.
Data re-processing and re-keying minimized or eliminated. Consistent Customer tagging across databases enabled (maybe not solved) by XBRL.
XBRL seems to be a “natural” for helping to transform the internal information supply chain (but much work needs to be done):
1. Business Reporting
2. Decision Analytics– Balanced Scorecards/Integrated Performance Mgt– Data Mining– Continuous on-line auditing– Business Activity Monitoring (BAM)– Other web based auditing and modeling capabilities
XBRL – GL Enablement for Decision Analytics
How do you efficiently move detailed information between disparate accounting systems?
How do you deal with different transactional XML standards and efficiently map them to GL systems?
How do you represent the information in back-end accounting in a standardized format for data transfer, archival and audit purposes?
How do you drill down from XBRL reports to the underlying detail?
Problem Statement: Per “Professor” Eric Cohen
XBRL GL, the Journal taxonomy Integrates accounting systems Provides detail later summarized in
Financial reporting Tax Performance
Represents almost anything categorized to "accounts“ Customer and vendor master file information Detail journals Information represented in US, Japanese or European
general ledger packages
To Meet the Need: XBRL-GL
Different Data Dictionaries: Field names, field order
System 1: AccountNo, Amount, Date
System 2: MonetaryAmount, PostDate, AccountNumber
System 3: PostingDate, Account#, Value
System 4: Date, Journal, Account, Amount
Similar Data
Account, Amount, Date
Different Representations for the same concepts in common data field
Journal: PJ, Payroll Journal, Payroll
Date: 12-31-03, 20031231, 12/31/03
Different
Data Formats
CSV
ASCII
WKS
XBRL GL provides platform for agreed-upon and well defined list of concepts –
make sure my “Account” and your “Account” means the same thing (not
bank account or customer account but GL account.)
Based on XML, XBRL GL is order independent; sharing element names
for import/export means that AccountNo, AccountNumberm
Account# and Account will all be express as one common name;
applications will know what to expect inpublishing and consuming data files.
So many external data formats; XML provides a popular and increasing
supported / demanded data format.
Once you have agreed on data field standardization, software applications require agreement on content in many cases. XBRL GL provides enumerated
values to supplement XML data standards to help in this area.
XBRL Spans the “GAP”
AT&T Dashboard
Data mining is a process of determining relationships and correlations across seemingly unrelated data elements (often transaction level), using pattern recognition technologies and advanced statistical methods. Editor’s note: Tagging would help!
According to the MIT Technology Review, Data Mining is one of the top 10 emerging technologies that “will change the world”.
What is Data Mining?
Data Mining is a standards-based, iterative and adaptive process
Sales leads Countering Sports
Terrorism Management
Data Mining is employed in a variety of fields ….
Scour data looking for duplicate
payments, large payments, missing
billable units or payment addresses (to
find ghost vendors or employees), etc.
“Another area to watch related to data mining and BI is XBRL and the impact this will have on financial reporting”… AICPA, Nov/Dec. 2004
Data Mining Applications in Finance
Data Mining Revenues – U.S. Only(Software Licenses and Maintenance $M)
Source: IDC
0
100
200
300
400
500
600
1999 2000 2001 2002 2003
Revenues
Assisting Firms with the ROI of XBRL
Ability to extract and correlate data from underlying feeder systems and G/Ls represents a depth of sophistication that does not exist today Must push the proprietary software vendors Need an overall information architecture/data centric vision
(Finance needs to lead, not follow!)
WHO will lead the adoption of XBRL in the internal information supply chain ? ……….
A Newbie’s Perspective: XBRL Issues and Challenges
The IMA is ….
Leading association for management accountants working in industry.
~ 70K members, with strong international growth. Award winning periodicals (e.g., Strategic Finance) Multi-million dollar investments in marketing, research,
learning systems & conferences Provider of the gold standard advanced certification for
Management Accountants – the CMA. Continuous learning opportunities as you move up the
ladder from finance professional to business partner!!!
IMA’s Role in Transforming Business Reporting and Analytics
Now/On-going….. XBRL visibility at annual IMA conference
(Boston, June 18-22) and future events (e.g., International conference 2006)
Articles in the IMA’s premier publication, Strategic Finance (XBRL editor: Neal Hannon)
IMA Web site – education and training … Press Releases – Position statement, etc. Visit us at www.imanet.org
IMA’s Role in Transforming Business Reporting and Analytics
Longer term/Helping to lead change…..
We believe there is a Crises in the management accounting profession resulting from the overwhelming volume of data and information requests from outside and inside the firm.
CFO must lead the design and development of an integrated performance management process within the internal information supply chain that is timely, efficient, accurate and actionable.
DO YOU AGREE ………………………………….?
IMA’s Role in Transforming Business Reporting and Analytics
Longer term/Helping to lead change…..cont’d
In addition to defining the integrated measures across multiple domains, we need a data centric technology vision enabling production of reporting and decision analytics on a timely and efficient basis AND
We will take a lead role in this space by providing thought leadership, best practices, case studies, training, etc. to help transform the internal information supply chain, enabled by XBRL..…..
………………………… MAKE SENSE????
IMA’s Role in Transforming Business Reporting and Analytics