in cooperation with the MNE: 26th Meeting of the Wiesbaden Group on Business Registers Session 6 Profiling and Globalisation Neuchâtel (Switzerland) - 24-27 September 2018 Manual profiling in cooperation with the MNE: Italian experience and the quality improvement of economic statistics Authors: Francesca Alonzi & Sandra Marchettoni Presenter: Serena Migliardo Directorate for Economic Statistics - Istat, Italy

Contents Introduction and main objectives The EGR-profiling Italian team Process of contacting MNEs’ representatives Storing information on profiled groups Results of the contact phase The turnover variable: an ex-post evaluation Conclusions and future developments Manual profiling in cooperation with the MNE: Italian experience and the quality improvement of economic statistics Neuchâtel (Switzerland) - 24-27 September 2018

Introduction and main objectives The cooperation with the MNE is an extremely tricky phase for the profiling process: it may have significant advantages for the effectiveness of manual profiling; it may also result in a statistical burden increase from the MNE perspective. The final goal of contact phase should be: obtain the necessary info for the profiling analysis; but above all to create a unique access point for collecting economic data at group level to satisfy users’ needs from different domains (NA, SBS, STS). This study is an example of how a direct involvement of the profiled MNEs can contribute to the quality of economic statistics through a comparative analysis between the data provided by the groups themselves following the interview, and the data the profiling team would have defined without the cooperation. Manual profiling in cooperation with the MNE: Italian experience and the quality improvement of economic statistics Neuchâtel (Switzerland) - 24-27 September 2018

The EGR-profiling Italian team BR experts engaged in the current production of Business Registers EGR experts involved in the EGR annual process (repair action) EGR-Profiling Italian team The Italian organization model tries to assign the profiling responsibility of each MNE to the same profiler for different reference years; a regular exchange of opinions is guaranteed within the team of profilers working in a collaborative manner through motivating weekly meetings; the team has been collaborating with Italian colleagues from SBS domain and experts of FATS statistics. Manual profiling in cooperation with the MNE: Italian experience and the quality improvement of economic statistics Neuchâtel (Switzerland) - 24-27 September 2018

Process of contacting MNEs’ representatives Contacting the groups has been a step-by-step process in two ways. Starting from the contact people for the SBS surveys or, in some cases, from the investigation of references in the corporate websites and financial documents, a proactive discussion with MNEs has taken place: to find the correct people in charge of managing the data needed to the analysis; to schedule a formal visit with the GEG’s representatives on a suitable date for the group even considering the financial accounts deadlines; to identify the most appropriate way to perform the meeting: a face-to-face interview, a conference call, a web meeting. Communication process with the group can be considered a step-by-step process with regards to the different reference years of profiling analysis because in some cases of initial intensive profiling exercise which didn’t gather exhaustive data have led to more complete and productive results when a follow-up analysis has been undertaken. Manual profiling in cooperation with the MNE: Italian experience and the quality improvement of economic statistics Neuchâtel (Switzerland) - 24-27 September 2018

Respondent selection mode Contact level in the MNE Storing information on profiled groups Development of a database to store the information on the profiled groups and the main results of the contact phase. The database contains different files for each reference year. Type of contact - e-mails - telephone calls - formal letters - meeting Outcome of the contact - light cases - identification of the correct person but no cooperation - collection of core variables - no feedbakc Respondent selection mode - open sources such as corporate websites -SBS or STS respondents - personal contacts or collaborations Contact level in the MNE - corporate governance - human resources department - financial or accounting area Data provided - GEG perimter validation - LeU core variables - ENT proposal - ENT structure (LeUs) - ENT core variables Data acquisition mode - general presentation - questionnaire - structured template (usually a spread sheet) Manual profiling in cooperation with the MNE: Italian experience and the quality improvement of economic statistics Neuchâtel (Switzerland) - 24-27 September 2018

Results of the contact phase The most successful cases, in terms of outcome of the contact, are those MNEs which have received a well- detailed e-mail on the presentation, main aim and advantages of the project; telephone calls have been useful, too, in a secondary step to build a collaborative relationship. Increase in the number of collaborative MNEs from 2011 to 2015 is especially due to the follow-up activities undertaken by the Italian EGR-profiling team. Improve in the successful collection of different data is due to the growing expertise of the Italian team and the involvement in follow-up cases; thus, the ‘contact phase’ iterative condition becomes the core element of the profiling process, and contacts may be consolidated and even reinforced in the years. Manual profiling in cooperation with the MNE: Italian experience and the quality improvement of economic statistics Neuchâtel (Switzerland) - 24-27 September 2018

The turnover variable: an ex-post evaluation 1/2 Columns a and b contain not consolidated turnover which represent the first data collected by profilers during the initial desk analysis of the MNE. Column c points out consolidated turnover obtained and calculated by the profiler as the final result of the light profiling activity. Consolidated turnover figures provided by the MNE are reported in column d. Case A Case B Manual profiling in cooperation with the MNE: Italian experience and the quality improvement of economic statistics Neuchâtel (Switzerland) - 24-27 September 2018

The turnover variable: an ex-post evaluation 2/2 Some indicators (Ind1, Ind2, Ind3 and Ind4) have been measured to reveal the ENT turnover overestimation in which profilers may incur adopting different aggregates of consolidated turnover in the BR of Enterprises. Ind1 shows a first decrease of T/O variable due to the transition from BR vision of the MNE to a more economic one during the first profiler approach to the group. Ind1 increase in statistics quality for an economic study of the MNE Ind2 points out the difference between ENT consolidated turnover after the application of the light profiling technique versus the intensive one. Ind2 increase in statistics quality thanks to the MNE’s cooperation Ind3 & Ind4 represent the comparison of the ENT turnover variable between data provided by the MNE itself and turnover data collected without profiling analysis. Ind3 & Ind4 increase in statistics quality following the application of profiling methodology Manual profiling in cooperation with the MNE: Italian experience and the quality improvement of economic statistics Neuchâtel (Switzerland) - 24-27 September 2018

Conclusions and future developments The contribution is intended to highlight the importance of building up a solid relationship between MNEs to be profiled and NSIs. A direct involvement of the profiled MNEs can contribute to the quality improvement of economic statistics on a national and international level, even ensuring an higher international consistency in statistics (see the turnover example). Establishing and maintaining contacts with the largest national MNEs needs to be planned in the most suitable way and to be followed by a team of experts with a statistical and economical background. The Italian NSI is working on the development of a Large Case Unit in charge of collecting different needs, coming from the various statistical domains, such as BR, NA and SBS, and of contacting MNEs’ representatives to satisfy them. In addition, an ad hoc SBS survey on the collection of intra-flows is going to be undertaken with the aim of filling the informative gap on ENT core variables. Manual profiling in cooperation with the MNE: Italian experience and the quality improvement of economic statistics Neuchâtel (Switzerland) - 24-27 September 2018

Thank you for the attention Serena Migliardo (migliard@istat.it) Francesca Alonzi (alonzi@istat.it) Sandra Marchettoni (samarche@istat.it) Directorate for Economic Statistics - Istat, Italy Manual profiling in cooperation with the MNE: Italian experience and the quality improvement of economic statistics Neuchâtel (Switzerland) - 24-27 September 2018