COMMENTARY

Why open data standards make good sense, now more than ever

W. David Stephenson is the principal at Stephenson Strategies in Medfield, Mass., and a government/enterprise 2.0 consultant.

I’ve heard nothing in early discussions about the so-called supercommittee charged with finding more than $1 trillion in budget cuts to indicate that it is considering structural changes in how the government operates. That’s a terrible omission.

There’s little hope for long-term savings if we continue to run the government using obsolete 20th-century methods. That’s why the final package of cuts should include a management plan that builds on the proposals by the GOP and the Obama administration to radically alter the way government agencies report on their operations and process information from corporations.

The benefits could include billions of dollars in savings and improvements in operational efficiency, service delivery and transparency.

The Digital Accountability and Transparency Act, introduced by Rep. Darrell Issa (R-Calif.) in June, would require government agencies and their grant and contract recipients to report on all spending on a quarterly basis using systems based on a global open standard. The same day Issa introduced his bill, the Obama administration issued an executive order to promote greater government efficiency and accountability. It included a requirement to ensure the reliability of government spending data and collect and display that data.

By building on those two approaches, we could have a one-report system that government and business could use for daily internal operations and external reporting, with a wide range of benefits to the organizations and the public.

The key is the Extensible Business Reporting Language (XBRL), a free global standard. Its “tags” bond additional information to data to give it context. With the right support systems, the data could flow automatically and in real time to wherever it is needed. And data would only have to be entered once, thereby producing major improvements in accuracy and efficiency.

It could give employees at companies and agencies the real-time information they need to make better decisions. It would let employees better coordinate with suppliers and customers to improve efficiency and earn public confidence through transparency. The tagged data is machine (i.e., computer) readable, which would also allow many manual processes to be automated.

In addition, regulatory reports could be generated automatically from that same data, which would achieve the Republican goal of cutting regulatory compliance costs.

The key elements of such an approach are already in effect in the Netherlands and Australia under what is called Standard Business Reporting. It allows businesses to file a single XBRL report with the central government. The data then flows automatically to the relevant agencies. Companies can save as much as 25 percent on their reporting costs, while the public interest is better protected because multiple agencies can analyze the same information simultaneously. U.S. companies must already use XBRL when filing reports with the Securities and Exchange Commission.

But Standard Business Reporting is only the start of a one-report system. To realize the full benefits, agencies and businesses would need to start using an expanded version of XBRL, called XBRL Global Ledger, to run their daily internal operations. If the legislation that results from the supercommittee's deliberations mandates that government agencies adopt XBRL GL, their increased efficiency should inspire companies to follow suit.

The Technology CEO Council, a group of technology innovation companies, recently reported that the federal government could save $1 trillion by pursuing a variety of proven private-sector innovations, such as cloud computing. Single reporting could further add to those savings and allow for a smaller, more efficient government while encouraging economic growth. That would constitute 21st-century management for government and the private sector.

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Reader comments

Wed, Oct 26, 2011 Interested Observer

These XML-based standards are fine as enablers, but all the supporting pieces have to be there as well, namely: 1) Agencies must require machine-validated documents, rejecting those that do not validate. 2) Agencies must maintain validation schema(s) with new XML standards updates 3) Agencies must control the constructs of the XML to prevent the goals of the standards being put out of reach or violated. With XBRL, the Security and Exchange commission, and the managers of the XBRL standard, has failed on all these counts. The voluntary XBRL submissions are not being validated as a condition of acceptance. The XBRL standard has allowed for organizationally-defined calculation methods of arbitrary complexity to be inserted in the data. And obviously, if companies can redefine calculations, there is no schema to validate the calculations, the basic goals of transparency through a single data stream which is both human readable and machine processable, have been lost. It's not enough to have an XML standard that _could_ be used for auditable automated transparent data reporting, there must be no way to successfully follow the submission steps _without_ yielding auditable automated date reporting. Else those with an interest in obfuscating the information, whether it is the businesses themselves, or even those companies living off providing the machine-readable data to clients at a high rate of profit, will continue to do so.

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