Big Data and XBRL
by Gerald Trites, FCA

For those who think in terms of data, few ideas are more obvious than that any technology that promotes the ability to exchange and mobilize data is something of value. It enables companies to create value from the data they need, and that pool of data is growing exponentially.

In June, 2011, McKinsey Global Institute published their landmark study, "Big data: The next frontier
for innovation, competition, and productivity". Since its publication, the study has gained influence in business, academia and research. Big data has become a major watchword of the 21st century.

When we talk about big data, we mean the vast quantities of data that are created and consumed every day in our world. Not very long ago, we discussed data in terms of megabytes. Then came gigabytes and in larger systems, terabytes. Each exponentially larger than its predecessor. Now we are talking about exabytes.

To get an idea of the meaning of exabytes, one of them is equal to a byte times 10 to the 18th power. That's equal to one quintillion bytes. To put it another way, one exabyte is more than 4000 times the total information stored in the US Library of Congress.

The data is being created at a growing rate through internet traffic, media, research and many other ways. A significant portion is generated through social media, mobile devices, the cloud, etc.

From a business point of view, the data represents a vast resource for defining customer needs, designing new products, determining business trends and developing strategy. The value of data is becoming so important that its presence marks the dawn of a new revolution in business, one in which the success and even the survival of a business depends on its ability to create value from the data, to direct it to the creation of strategic advantage. Companies are beginning to realize this and are ramping up the search for talent that has analytical abilities; something that is becoming a major industry in itself.

But the creation of value from data is subject to a number of constraints. The old ERP and CRM systems, while designed to direct data analysis to strategic decision making, were never designed to cope with the vast volumes of data in the big data world, nor were they designed to cope with the data that comes from social media, although Social CRM has been moving in that direction. The analytical sophistication of these business systems needs to be seriously improved. Also, corporate systems tend often to be segmented into different platforms, thus restricting the mobility of data and the ability to analyze it.Finally, too many managements and their advisors don't get it yet - are not "data-minded" and therefore will miss the strategic advantages that come from big data. And the shortage of people with serious data analytical abilities limits the ability of business to create that value, even if they realize it needs to be done. Absolutely a big challenge for educators and corporate trainers.

The ability to consume data needs to be done in an environment that is data friendly. XBRL is a tool that can make it so. XBRL can be used to incorporate metadata into data in a standardized way so as to make it readily identifiable and understandable. XBRL and XBRL GL can be used for almost any type of business data, right down to individual transactions. Designed to place standards around the identity of the data in a way that transcends platforms and legacy systems and that enhances the ability of personnel to analyze the data, XBRL is a tool made for the Big Data Era.  

For a copy of the McKinsey report, go to the McKinsey Global site here.