Jeff Thomson – Vice President Institute of Management Accountants (IMA) 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 ToolInitial 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 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 Data Mining Applications in Finance

Data Mining Revenues – U.S. Only (Software Licenses and Maintenance $M) Source: IDC

 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 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

THANK YOU Contact information… Jeff Thomson Phone