FOUR IT TRENDS
While use of big data, analytics, cloud computing, and social media is mainstream in the IT community, it is also pervading the broader, global business world today. The terms "big data" and "analytics" are used somewhat interchangeably because they are so closely related to each other. Analytics— looking for patterns, trends, insights, and outcomes—are performed on big data sets, but it seems that the more evocative term of big data is what has caught on and is most commonly used. Little work has been done to examine the relevance of these big trends for integrated reporting, but we think that all can be relevant.7
Big data is defined as a vast quantity of structured and unstructured data from traditional and digital sources inside and outside an organization that represents a source for ongoing discovery and analysis.8 From the perspective of integrated reporting, its power lies in the ability to access sources of information ignored by traditional IT systems and to offer proxies for performance outcomes that are difficult to measure (e.g., the value of intellectual property or the benefits of employee engagement) or difficult to track (e.g., customer satisfaction or social impacts). When it comes to big data, companies are doing more than just talking about it; they are spending money on it. According to Gartner, big data investments in 2013 continue to increase. Compared with 2012, in which 58% of organizations surveyed were investing or planning to invest in big data technology, 64% of organizations had taken the plunge.9 To date, the main areas companies have addressed through big data concern customers (enhanced customer experience, new products/new business models, and more targeted marketing) and internal operations (process efficiency, cost reduction, and improved risk management).10
Big data can be both structured11 (prepared according to a well-defined convention) or unstructured12 (not prepared according to a well-defined convention). For integrated reporting, both financial and nonfinancial data are important. While they can both be structured or unstructured, non-financial information is more likely to be the latter. Both can be delivered in terms of three different formats, ordered from least to most useful: (1) human-readable data,13 (2) semiautomated data,14 and (3) intelligent, machine-readable data. The type of data format a company uses for its integrated report heavily determines how quickly, accurately, and cost-effectively a company and its audience can use that information to make decisions.
The most useful, accurate, efficient, and cost-effective form of data is intelligent, machine-readable data. Intelligent data has built-in validation rules, calculations, and formulas that verify its accuracy. It can also be linked to other data or narrative information in order to illustrate its relationships and interdependencies. The latter is important for fostering integrated thinking because it makes it easy for the user to see how one piece of information is related to others. Finally, it contains tags of "metadata"15 (data about data) that point to other useful information, such as the accounting standard on which the information is based if it is financial information, or the standard or method of calculation used if it is nonfinancial information. Intelligent, machine-readable data means that almost no human intervention is necessary to work with it: the data go directly from the entity's machine that produces it to the entity's machine that consumes it.
To enhance its utility and value while reducing the amount of manipulation and risk of error later in its life cycle, data should be created as intelligent, machine-readable from the outset. XBRL, a proven global technology for making business information machine-readable, offers one way to accomplish this. As only a handful of the world's largest companies currently provide data in this format for their annual reports on their websites, this is an area of immense opportunity for companies to improve their corporate reporting and their integrated reporting.