Download Cross Industry Standard Process for Data Mining (CRISP-DM)

A Practitioner’s Perspective: How XBRL Can
Enable Decision Analytics
April 27, 2005
Jeff Thomson – Vice President
Institute of Management Accountants (IMA)
201-474-1586
Who Said It ????
“It’s not the strongest of the species that
survive, nor the most intelligent, but
the
one most responsive to change” ….
AGENDA
 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
A Practitioner’s Lament
 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 (cont’d)
Decision Tool
Initial
Success
Deployed in 60 days;
Balanced
Scorecard, aka, on- financial & nonfinancial measures:
line Dashboard
customer, people,
operational, financial
(“EVA, PVA, CVA”).
Data Mining
Identified quality sales
force leads by
correlating seemingly
unrelated transaction
and summary detail
across databases.
Why Not
Sustainable
XBRL-GL
enablement
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.
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 – GL Enablement for Decision Analytics
XBRL seems to be a “natural” for helping to transform
the internal information supply chain (but much work
needs to be done):
1.
2.
Business Reporting
Decision Analytics
– Balanced Scorecards/Integrated Performance Mgt
– Data Mining
– Continuous on-line auditing
– Business Activity Monitoring (BAM)
– Other web based auditing and modeling capabilities
Problem Statement: Per “Professor” Eric Cohen
 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?
To Meet the Need: XBRL-GL
 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
XBRL Spans the “GAP”
XBRL GL provides platform for agreedupon and well defined list of concepts –
Similar Data
make sure my “Account” and your
“Account” means the same thing (not bank
Account, Amount, Date account or customer account but GL
account.)
Based on XML, XBRL GL is order
Different Data Dictionaries:
Field names,
field names
order
independent;
sharing element
for import/export means that
System 1: AccountNo, Amount,
Date AccountNumberm
AccountNo,
Account# and Account will all be
System 2: MonetaryAmount,express
PostDate,
as oneAccountNumber
common name;
Different
applications will know what to expect
System 3: PostingDate, Account#,
Value
inpublishing and consuming data files.
Data Formats
System 4: Date, Journal, Account, Amount
CSV
So many external data formats; XML
provides a popular and increasing
supported / demanded
Representations
for thedata format.
Different
same concepts in common data field
Journal: PJ, Payroll Journal, Payroll
Date: 12-31-03, 20031231, 12/31/03
ASCII
WKS
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.
AT&T Dashboard
What is Data Mining?
 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”.
Data Mining is a standards-based, iterative and
adaptive process
Data Mining is employed in a variety of fields ….
Sales leads
Countering
Terrorism
Sports
Management
Data Mining Applications in Finance
 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. 2004
Data Mining Revenues – U.S. Only
(Software Licenses and Maintenance $M)
Source: IDC
600
500
400
300
Revenues
200
100
0
1999
2000
2001
2002
2003
A Newbie’s Perspective: XBRL Issues and Challenges
 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 ? ……….
IMA’s Role in Transforming Business Reporting and Analytics
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 www.imanet.org
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????
THANK YOU
Contact information… Jeff Thomson
Email [email protected]
Phone 201-474-1586