The XBRL Trigger Effect

Michael Vizard

To a lot people, the new XBRL format for financial information is yet another requirement that has to be met so a company can check off yet another box in the never-ending quest to meet compliance requirements.


But James Fisher, SAP vice president of marketing for enterprise performance management and finance solutions, says companies would do well to look beyond simply checking off another compliance box when it comes to XBRL. Once in place, Fisher says XBRL will provide a foundation for a new generation of collaborative financial management applications that will have a profound effect on business.


For instance, XBRL will greatly accelerate the financial disclosure management, which Fisher says should result in companies being able to close their books at the end of every quarter a whole lot faster. In addition, Fisher says SAP envisions leveraging XBRL to enhance the next generation of its enterprise performance management (EPM) and business intelligence applications.


Like most compliance-related technologies, there's a fair amount of grousing about having to implement a new technology at the behest of some outside regulatory body. But in the case of XBRL, Fisher says this new format for sharing financial data will actually serve as a trigger for a whole range of more sophisticated financial management applications that greatly enhance a company's ability to manage its finances.

 

So while to a certain degree XBRL may feel punitive, in reality it is the beginning of a major transformation in financial management that should occupy IT organizations for years to come.



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Mar 18, 2011 3:58 AM Steve Levine Steve Levine  says:

James is correct in his perspective on the future of XBRL.  XBRL has the potential to enhance both enterprise performance management and business intelligence applications. The compliance aspect of XBRL is just the starting point for the adoption of XBRL. The compliance effort does have the beneficial effect of creating a supply of XBRL data that can be used for both internal and external benchmarking. We'll know that the new generation of XBRL-based collaborative financial management applications has arrived when XBRL is discussed by developers and IT organizations; not by the users who just see the benefits.

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Mar 21, 2011 5:46 AM Stewart McKie Stewart McKie  says:

It's good to see that SAP is waking up to the potential of XBRL. They are only a decade or so behind the curve. But then most ERP vendors are.

When FRx produced one of the first executions of XBRL for financial reporting back in 1999 and I and others were all writing breathlessly about the potential of XBRL, we had no idea it would take the rest of the industry 10 years to see the same potential we did back then.

Unlike Steve Levine I see the problem in the reverse. To date XBRL has been all about developers, IT and 'tekkies' generally. Many end users just don't get it because the applications that are actually delivering the benefits are thin on the ground and many benefits will not be realized until, for example, ERP vendors embrace XBRL tagging at the transaction/account level so that XBRL tagged data 'flows through' to financial reporting.

Of course it's good to see that the slumbering giant is awake. Let's hope that's a positive thing for XBRL generally. But more importantly, let's hope others follow and XBRL can help more end users improve their financial information communication.

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Mar 21, 2011 9:21 AM Mike Willis Mike Willis  says: in response to Stewart McKie

The implementation approach dictates the cost/time/controls implications.  Bolt-on/outsource to increase cost/time; Build-in to decrease cost/time while enhancing controls.  Standardize to Streamline current manual assembly and review process steps.  Making Sense of XBRL in the US and the UK here:  http://tinyurl.com/4bnp6jx

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Aug 27, 2011 5:58 AM XBRL Software XBRL Software  says: in response to Stewart McKie

The idea behind XBRL is simple. Instead of treating financial information as static text-as in a standard internet page or a printed document-XBRL provides an identifying tag for each individual item of data, whether numeric or textual. This tag is computer readable and allows the information to be used interactively. Now KDK Software is launching XBRL.

About its cost follow this link: http://www.mca.gov.in/XBRL/pdf/KDK_Softwares_%28I%29_Pvt_Ltd.pdf

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