The Data Dive

Month: February 2014

Compliance and analytics – Two sides of the same coin

Thanks to US SEC, we now have tagged financial data freely available. What are we doing with it? Imagine this – someone has acquired the data (thanks to an accounting system), someone has prepared the data (courtesy of CFOs and their teams) and someone has labeled the data (this time thanks goes to the person who did the XBRL tagging), someone made sure the labels are correct (the ever suffering auditors get the credit this time) and finally someone made sure all this was done according to some process someone has established and monitored (this time our thanks goes to the SEC EDGAR validation system).  Wow! All we now have to do is to figure out what model to use and what colors to apply in the graphs – we have analytics and visualization!

Data visualization – Pulling data from various data files from SEC filing

This all sounds too simplistic, right? That is because the picture I just painted is just that.

There are tons of issues that are hidden in this simple process. The devil is always in the details. What is the quality of this tagging? How much details are in the financial tables versus hidden in the notes Sections? How granular is this information? Is the information sufficiently functionally related so that a complete picture can be drawn? Is it possible to query the model built based on this data? Does the model give us enough data points to forecast anything reliably? How much data is really tagged? How much of this tagging is consistent across multiple quarters? How consistent are different companies in tagging the same concept with the same element? How much of the data is using extended customized tagging? All of these are valid questions and raises a lot of very legitimate issues.

But what is really the primary question we should ask? To me, that question is:

“Does this tagged data help build better analytics than what we could before there was no tagged data available?”

A company snapshot

As someone who has been working on data analytics for quite a number of years, I can safely say that the answer is an emphatic YES!  Yes, there are problems. Yes, it is not highly reliable or accurate or sometimes even usable, but it is better than what we could have done previously. We now have tools that can build quick models, connect relevant data, compare performances and even make predictions. And this trend has not been completely missed either. Leena Roselli, Senior Research Manager at  Financial Executives Research Foundation, Inc. (FERF) recently authored a report titled “Data Mining with XBRL and Other Sources” and explored some solutions that are just hitting the market including I-Metrix (RR Donnelly), Ask 9W (9W Search) and Lyticas (Apurba). While we are still pioneering in the financial analytics and visualization space using XBRL as the primary source of data, the initial solutions are quite promising.

The bottom line is that this mandate has given us a golden opportunity to move from data mandate to data consumption, from the avoidance of punishment to generating deeper Business Intelligence. Join us in that voyage!


Data Ocean

The other day I was watching Tron: Legacy and there was one point where our hero’s were flying over a vast ocean of data chased by the bad guys. The bad guys were trying to shoot them out of the sky or force them to drown in the deep ocean of seemingly random data before our hero’s can get to the island of insight and get the hell out of dodge.

Quite a big data problem our hero’s have. So how did they cope. Well they had an aircraft (system) with the ability to fly fast and to allow them to shoot back (efficient architecture). Now the enemy aircraft were coming at them in volume, velocity and variety.

Okay for those of you who,watched the movie I guess I am taking this metaphor way too far. But the upshot is to not drown in this sea of data one must look at ones own enterprise architectures whether it’s data, application or I.T.

Anyway more later. Gotta get on my lightcycle and get to work. Even as CTO I can still get derezzed

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