PricewaterhouseCoopers' new Technology Forecast identifies technology trends that help companies achieve greater transparency and accountability.
This year's forecast details how standards such as eXtensible Business Reporting Language (XBRL) and improvements in business intelligence and integration technologies can help corporations by giving them a real-time view of operations and allowing executives to make decisions more quickly and effectively.
“This year's Technology Forecast highlights a series of technologies that enable companies to manage information more effectively and react more quickly to changing business conditions,” said Eric M. Berg, managing director at PricewaterhouseCoopers' Global Technology Centre and Technology Forecast editor-in-chief. “Corporate transparency continues to be at the forefront of discussion in the business world and provides an important incentive for businesses to make use of these capabilities.”
XBRL, one of the key emerging technologies detailed in the Technology Forecast, will significantly change business reporting in coming years. XBRL is an electronic format for simplifying the flow of financial statements, performance reports, accounting records, and other financial information between software programs. Until recently, there were no standards that would allow financial information to be automatically communicated between different applications. Companies often manually assemble financial information from different systems in order to prepare financial reports and the lack of standardization makes it difficult for consumers of business information to track a company's performance and assemble information from multiple corporations for analysis. XBRL defines a consistent format for business reporting and will streamline how companies prepare and disseminate financial data, and how analysts, regulators, and investors review and interpret it. As a result, XBRL will save time and money when information consumers within and outside of a company analyze complex data. XBRL is a standard based on eXtensible Markup Language (XML) and is supported by a consortium of over 200 corporations, financial markets, accounting firms and regulators.
“The effect that XBRL will have on the business community will be more significant than the transition from paper and pencil analysis of financial information to the use of electronic spreadsheets,” said Mike Willis, founding chairman of XBRL International. “In the next three to five years, XBRL will move from the early adopter phase to become the generally accepted way to report business information. As a result, corporations will simplify the process for issuing business reports, and the public will find it easier to get the information they need to make informed investment decisions.”
Other key technologies discussed in the Technology Forecast will help companies make faster and more effective decisions.
Business intelligence systems, which traditionally processed highly aggregated historical data, have expanded their scope to monitor and manage individual transactions and business processes in real-time. As a result, they can generate alerts when an important event occurs or there is a departure from expected behavior. Key performance indicators can be monitored continuously and displayed on digital dashboards that are tailored to meet the needs of different individuals, from a logistics manager to the chief financial officer.
Business integration technologies have evolved beyond the previous generation of enterprise application integration (EAI) middleware to include process integration servers, which use explicit models of business process logic and add the ability to handle long-running transactions (which can last hours or days) alongside short-running transactions (which typically last less than a few seconds). Long-running processes are particularly important for business-to-business integration because it is undesirable for a business process to come to a halt while awaiting a response from a trading partner, as would happen with most earlier EAI middleware.
Supply chain event management capabilities provide real-time information about order status and inventory levels, as well as other supply chain events such as deliveries, shipments and production. These capabilities will dramatically increase during the next few years with the growing use of radio frequency identification (RFID) technology, which allows pallets, cartons and individual units of inventory to be labeled with tags that can be read electronically.
Expanded use of XML will provide the basis for developing specifications and standards for automating business process within and between enterprises. XML also provides the basis for Web services, which will eventually replace the current model of the Web – people looking at Web pages – with automated communication between software programs, allowing information to be accessed and processed without the need for human intervention. For example, Web services will allow company financial reports in XBRL format to be automatically retrieved by a financial analysis program, eliminating the need for an investor to first locate and download the information.