Big Data is more than a catch phrase, and it sure as hell isn't a fad.
The SEC knew it when it told public companies that they had to start filing their financial reports via XBRL. The MACPA knew it when it introduced XBRL to the non-profit world.
Now, Hudson Hollister wants to make sure the federal government knows it, too.
Hollister is executive director of the newly launched Data Transparency Coalition. It's a group of technology companies and non-profits that want to see federal data standardized in ways that promote consistency, transparency and efficiency.
The Coalition's goal is simple: It wants to see data from the federal government published online “in electronic formats that make the data easy to search, sort and download.” That means getting all federal agencies to use standardized formats — including XBRL — for publishing their data.
That's easier said than done. Here's one example why:
“The Treasury Department uses a two-digit code in its systems to refer to government agencies, and the Office of Management and Budget uses a three-digit code,” Hollister said. “Those codes are not compatible with each other. What that means is that Treasury's budget systems and OMB's budget systems cannot talk to one another.
“If we can get consistent codes and consistent markup languages adopted, that would mean huge strides for transparency, for the tech industry, and for efficiency in government,” he added. “… We believe that consistent, standardized structure for data will make all types of (federal) information more transparent, will generate new industries as tech companies invent tools to deal with these types of information, and will help the government manage itself better.”
The tools that will eventually be developed to deal with standarized federal information will be nearly as important as the standardization itself.
“Given the right tools, we can better understand the economy and perhaps prevent another financial crisis,” Hollister said. “Given the right tools, analysts in the financial industry can anticipate accounting fraud and recommend short sales and prevent the accounting fraud before it starts. Given the right tools, a government agency that wants to improve employee performance can figure out which employees to focus on. Almost any area you can think of where important details exist in disparate data compilations or are collected in different ways can be improved once the right tools are developed.”
As a longtime believer in the power and potential of XBRL, the MACPA is one of 14 founding members of the Coalition. The others are Microsoft, BrightScope, Elder Research, Level One Technologies, invoke, IPHIX, IRIS, MarkLogic, Rivet Software, RR Donnelley, Symplicity, Synteractive, and Teradata.
And that raises the question: Why should CPAs care about this stuff?
“Because eventually, the tools that CPAs are going to use to look at companies' finances are going to be connected to the tools that are being invented to look at Big Data compilations,” Hollister said. “CPAs are going to have to get used to the idea that a company's financial statements will be just one component of massive assemblies of different data compilations. In their work, they may have to look at other sources of information besides just the company's financial systems and financial statements. Perhaps the work of auditors and the work of data analysts will converge. If that sounds theoretical, that's because it is. It hasn't happened yet. But because of the ways in which Big Data tools are developing, and because of the invention of methods of organizing data — like XBRL — we can expect it will happen.”
I spoke with Hollister at length recently about Big Data's potential and the work being done at the Data Transparency Coalition. Listen to what he has to say in this MACPA podcast.
Then, check out what the business media is saying about the Coalition:
Learn more at the MACPA's Innovation SummitHollister will be among the Big Data advocates on hand for the MACPA's Innovation Summit on June 27 in Baltimore. XBRL and Big Data will have a prominent role on the agenda, and the Summit is worth 8 hours of CPE. Get details and register here.