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Some ideas …. Task XBRL as a business performance and financial reporting standard (with its various taxonomies). 2.

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Presentation on theme: "Some ideas …. Task XBRL as a business performance and financial reporting standard (with its various taxonomies). 2."— Presentation transcript:

1 Some ideas …

2 Task XBRL as a business performance and financial reporting standard (with its various taxonomies). 2

3 Area of contention I There is no urgency to adopt mandated interoperability standards. We should consider long-term alternatives before moving to avoid locking into a present solution. Accounting & financial reporting standards are proliferating rapidly. Someone need to establish a baseline toward which other standards may align and migrate. The time for action and widespread adoption of mandated solutions is now. 3

4 Area of contention II Accounting and finance are the languages of business. Other possible interoperability standards could aim ultimately at A&F centric solutions as an alignment point. We should implement these standards as quickly as we can and let the natural alignment of other business areas to those standards occur naturally. Natural language is the language of business. There are a multitude of different perspectives to the business reporting standard development process. We should try to develop solutions with higher structural and semantic interoperability aspects, so ultimate alignment and integration is based on ontologically preferable structures. 4

5 Area of contention III Interoperability is a complex implementation process about which little is presently known. We need to get working standards up and running to observe needed changes. The prototyping model works best. Interoperability is a complex implementation process about which little is presently known. We should structure the components of the first set of solutions just as we would the components of the long-term solution, so disruptive realignments and restructurings are not necessary. 5

6 Area of contention IV More than 80 % of the long term benefits accruing to financial and accounting interoperability can be realized almost inmediately with the standards in place. The rule does not apply in the case of the interoperability implementation path. There will be a smooth progression of benefits as we move from syntactic interoperability to structural interoperability to semantic interoperability. 6

7 Area of contention V Taxonomies naturally migrate toward longer term framebased and logic-based solutions. Best to do this now and manage migration well. Frame-based systems naturally migrate toward longer term logic-based solutions in ways that taxonomies cannot evolve. Best to start here. Only logic-based solutions migrate toward logic-based solutions. Best to start here. Business and industry will rarely need higher expressivity solutions. Start where success seems more imminent and manage migration when changes are needed. 7

8 General Research Issue One goal of the discipline of Wirtschaftsinformatik is the meaningful integration and automization! 8

9 Context of REA and XBRL (my personally point of view) 9 Strategical Level Tactical Level Operational Level Horizontal integration Vertical integration XBRL - Reporting - Aggregations (Granularity) - Multidimensionality (OLAP) - … REA - Relational World - … Subset of Business Intelligence? external Stakeholders

10 Zachman Framework as integration support 10

11 Research Problem A problem we would like to solve with these research suggestions is that there are many interoperability standards and they all diverge. With a more general underlying ontology we will have common requirements or common principle so these standards can more easily converge. We propose to show that common principles will lead to SEMANTIC interoperability. An integrated approach of REA and XBRL supports the goal of horizontal (business processes and transactions) and vertical (reporting operational to strategic level) integration. 11

12 Research Propositions XBRL is a language for specifying taxonomies + a set of taxonomies. would like to extend XBRL language to so as it is a subset of common logic, so it can be integrated. REA is a language for capturing economic phenomena. We would like to extend REA, so it is a subset of common logic, so it can be integrated. Specify REA more explicitly with a more explicit underlying theory. 12

13 Common Logic We propose a project to research the possible integration of REA and XBRL The analysis of meta-meta-level, meta level, object level, and instance level is relevant. Common logic provides a semantic foundation for both levels. We should explore expressing REA and XBRL in Controlled English. 13

14 Why is XBRL so Detailed While REA is Not? We propose a reseach project to investigate specification of attributes in the REA model. Why has XBRL so many details? Would there be a better interoperability if REA had more attributes? REA is not specific enough to assure semantic or other interoperability. Can we more usefully specify an underlying ontology that covers both REA and XBRL, so it can be used as a basis for integrating between REA and XBRL to improve interoperability between stakeholders. 14

15 Involve broad community An underlying ontology would provide a principled basis that will allow a wider community to participate in future development and extension of REA. So far it is in the hands of Bill, Guido and standards setters. The same applies for XBRL, it is also in hands of developers and standard setters. There are multiplicities of projects that can address these points, not only computer science and accounting projects. 15

16 Time-Benefits-Expressivity Analysis We envisage that migration from standards with weak interoperability to standards with strong interoperability would be much more difficult when dealing with a whole community that would need to be persuaded to migrate. We therefore favor working on standards with strong semantic interoperability now even if this takes longer. 16

17 Research Issue The journey is the reward! 17

18 © Stephen A. Brobst, Chief Technology Officer Teradata, NCR Information Evolution (Terms we have also heard in the workshops context) 18

19 The journey can be understood as thinking in Maturity Levels Example (biMM ®) Stage 1: Pre-defined Reporting (XBRL?) Stage 2: Department-oriented Solutions (Think big, start small!) Stage 3: Enterprise-wide Solutions (Integration, BI!) Stage 4: Enhanced Decision Support (Extra-enterprise and logic) Stage 5: Active Knowledge Management (logic) Business Intelligence-Study ® 2004 und 2006, Steria Mummert Consulting 19

20 Value for the enterprise business-oriented validity Support of analytical processes Support of planning and steering processes FlexibilityQuality Standardization of components Profitability Formalization of system-oriented processes Business expertise Organization Technology Business Intelligence-Study biMA® 2004 und 2006, Steria Mummert Consulting Attributes of biMM ® Maturity Levels – Usable? 20

21 Research Proposition II A maturity model can be understood as journey (independent of stage or continous representation). Dimensions of maturity models: What? How? How much? Verification? 21 known from Zachman Framework

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