No event can be separated from the underlying data defining the event. Philosophically speaking, just as the microcosm and the macrocosm are built on the same plan, data underlying the occurrence of an event is encased within the event itself and therefore carries its properties and attributes.
Michelangelo famously said, “Every block of stone has a statue inside it and it is the task of the sculptor to discover it.” Modern businesses have a similar task – that of discovering the relationship within the wealth of information they possess and finding the true meaning of data. To do this, you not only require data at the most granular level but also the underlying context and interconnectedness of every piece of data with others. Only then can you correctly interpret information and derive insights.
From Data to Insight: Then & Now
Gone are the days when the world of data and information was dominated only by news, research, and information firms. Today, everyone is a publisher. Yes indeed; from individuals to enterprises, everyone has access to a publishing platform and a world of possible interested readers. With the proliferation of the internet, mobile, and now big data, the mathematics of data is ousted. Automation and machine-driven algorithms are the way forward. Rather than existing as separate silos, content today is driven by technology that is deeply embedded within existing workflows. Today access to data need not be in lumpy data sets; instead, everyone can have access to the contextual data presented in its smallest form/unit.
In this era of exponential data growth, there ought to be a greater focus on the quality of data as well, especially concerning accuracy and transparency. In the world of business and financial information reporting, structured data standards such as eXtensible Business Reporting Language (XBRL) are driving this focus on data quality. Not just that, XBRL is disrupting the way data is being created, collected, and consumed.
XBRL: The Future of Data
Due to the lack of an established data standard so far, data aggregators, be they regulators or information providers in the business of publishing financial data/ information, have been collecting company information in myriad formats and storing them in databases through a highly labor-intensive process. However, with more and more regulators the world over adopting XBRL as ‘the’ reporting standard, this is changing and changing fast.
In 2007, the Harvard Business Review identified XBRL as a breakthrough idea. Since then, over 50 countries have adopted structured data and more specifically XBRL, leaving a tremendous opportunity for another 150 to follow. In 10 years, the adoption of data standards will be universal, with XBRL likely to lead the way in the absence of other meaningful alternatives.
With the adoption of XBRL, aggregators, regulators, or for that matter, corporate users of data and information face the challenge of transforming their business processes and upgrading capacity to be able to handle and process structured data formats.
The Way Forward: The Move from Aggregation to Analysis
Adoption of a new standard can often be overwhelming, and users need to plan and implement solutions that are adaptable and offer long-term benefits over short-term wins. It’s imperative for them to partner with players that have a core focus in the space of structured data and can stay ahead of the curve by shaping the path of its evolution.
Here are some key questions that an aggregator needs to consider when implementing a solution that can help them move to the next level of data analysis:
- Is our adoption of a structured data standard such as XBRL driven merely by a regulator mandate or are we looking at leveraging the inherent benefits that come along with it?
- Is our priority low-cost conversion of data through a hard-coded solution or adoption of a generic automated solution?
- What is the level of change management that we need to handle? Is there a need to change existing business processes and train employees on XBRL?
- Is the solution ready to adapt to a rapidly changing and dynamic reporting standard?
- Have I considered the total cost of ownership, in managing and maintaining the solution? Is there tangible business value and long-term benefit that can be quantified?
- Is the solution technology-agnostic and easy to implement?
A well-thought-out plan and defined roadmap will help data aggregators adopt the right solution for their needs and reap the benefits of XBRL in the years to come.