Business Intelligence and eXtensible Business Reporting Language

 

Summary

XBRL and Business Intelligence

Greater transparency is good, but it does not mean more credit

MUSING and TDWI Symposium Amsterdam

XBRL and Business Intelligence

There are several reasons to join the two concepts of business intelligence (BI) and eXtensible Business Reporting Language (XBRL). Both concepts have in common the support and automation of the management process of reporting and analyzing business information. Whereas XBRL tries to describe the meaning of business data and to standardize data exchange, BI seeks to analyze and report these decision-relevant data. Both come from different perspectives, XBRL from semantic description of data within an XML environment and BI from search of knowledge in data.

In a simple way we can understand XBRL as an automated process of business reporting and therefore as a part of BI. Otherwise BI provides a broad set of algorithms to explore the structure and meaning of data. All the data scrubbing and pre-processing (extract, transform and load: ETL) has to do with the mapping of meta data and can be neglected when we leverage clean and meaningful (XBRL-) data.

So why not use the semantic layer and taxonomy of XBRL to go beyond reporting and do more in-depth analysis of financial transactions as can be found in a general ledger? Real-time control of business processes is currently hyped within the data warehousing industry. As every business process should possibly be traced in the accounts of a company a constant flow of financial data in XBRL-format into a BI-system will be necessary for a continuous control of operations, for early fraud detection and BI as a source of compliance systems.

The intelligent real-time enterprise of the future will be based on these technologies. This challenge is the driver of one of the main objective of MUSING, namely to point out what future research must be done to develop analytical applications with a high degree of intelligence and very low reaction time based on XBRL and BI. Therefore the MUSING consortium is planning a kick-off event of a permanent forum of professionals and researchers interested in XBRL & Business Intelligence related topics that may live beyond the official timeframe of MUSING. A specific section on the project's dissemination website (xbrl@musing) will be created soon to support the early phases of this community.

Greater transparency is good, but it does not mean more credit

Great debates around the credit. In fact, everything is complicated by the particular structure of the european industry. Most companies have less than 20 employees, and  the largest part of those companies have even fewer than 10 employees. Medium-sized enterprises (with more than 5O people, and which have structures, technologies and markets) are a minority. Basically, the customer of the bank is often a small enterprise, faced with the so called “credit crunch”.

That said, it turns out that there are some surprises in the credit situation. The first is that banks are in the trouble with large customers, in particular the large groups that became insolvent - in whole or in part – because of mismanagement.
In other terms, claims for credit losses are on the increase not for the troubles of small and medium-sized enterprises, but precisely because of larger companies. Credit to small businesses was complicated by different reasons. The most important is that their financial statements (drawn up by the accountant downstairs) usually do not say anything or almost on the state of health of the company. And so the banks, when they lend money to those firms, they do not give credit to them, rather to their customers. In essence, the banks anticipate invoices issued by small businesses to their customers: if these customers are good (middle-to-large and solvent) there are no problems. If SME’s customers are in turn small - and undecipherable - the credit process come to a halt and for obvious reasons: nowadays give money around  is risky, and more than ever to companies of which you cannot assess the financial soundness and the real turnover.
And here there are not many solutions available, apart from enhancing - in terms of accuracy, completeness, timeliness and comparability -  the information flow from businesses to finance. This is exactly where XBRL takes off; small businesses can benefit from XBRL adoption by standardizing and simplifying their assembly and filing of information to the banks, thus improving the relation through provision of more transparent and user-friendly information. On the banks’ side, loan management departments can obtain data quickly and reliably via automated reporting and compare and analyze financial information much more reliably, fully and effectively using automated processes. MUSING pilot online self-assessment is an effective example of how XBRL can be leveraged to this purpose.

However, improving company reporting is not a panacea for the credit disease and it cannot, by itself, create the minimal conditions required to give money to small businesses. Then, the only solution seems to be what many call with the expression "neighborhood credit", i.e. of friends, partners, providers. According to some observers of the industrial realities, however, the only "neighborhood credit" reachable in times of crisis seems to be the private equity (if any) of the holder of the company or his/her family. It is difficult that the district trader is available to finance Mr Smith’s small firm of electrical installations (of which he knows nothing, similarly to a bank). In the end, if  behind a small company there are not heritages, savings or customers whose invoices can be readily anticipated by the bank, it is probably going to be red-marked.

With a danger. Above these troubled small businesses, there are medium-sized enterprises, which remain fairly solid even during the crisis, because they have  robust capital structures, customers, and  technologies. But this group of companies actually live much of  the work of small businesses (which are their suppliers): if the latter fall, they former end in troubles too.
The matter, as we can see, is complicated. SMEs continue to be fundamental elements for the proper functioning of the economic system; but it might take years to recover from the credit crisis. And this, for many small businesses (although valid) means inevitably an enduring threat of closure and exit from the market.
 

MUSING and TDWI Symposium Amsterdam

MUSING will be hosting a stand at the next TDWI (The Data Warehouse Institute) Symposium in Amsterdam from the 16th November through until the 17th November 2009.  The event will take place at the Holiday Inn Amsterdam Schiphol and will feature other projects and companies involved in business analytics. There will be an opening keynote address by Dave Wells titled "Business Analytics in Troubled Times" that will challenge you to think differently about how to run your business in the future. You will also have the opportunity to get the latest product and technology information directly from the vendor's with a minimum of hype and hassle.

On the education side you have the opportunity for in-depth discussions and learning on some of the key areas that most directly affect the success or failure of your DW/BI projects. The TDWI BI Symposium will cover four key topics that will directly impact the success of your DW/BI project. These courses will be taught by Dave Wells and John O'Brien, both of whom are considered key thought leaders and industry experts in BI requirements gathering, BI project management, data modeling and data integration. This will be an excellent opportunity for you to learn the best practices from the experts and how to implement them practices in your projects. In these challenging times we can afford not to "get it right" the first time.

MUSING will have a stand for the two days of the event and project representatives will be on hand to answer any questions and queries about the project. For more information please see the event website:

https://www.tdwi.eu/en/events/conferences/tdwi-2009-europe.html

For any further information about the MUSING project please contact: info@musing.eu

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