|Section Eight: Case Studies
Beckon Microparts Case Study Parts A and B
Part A: John Usexml, Chief Executive Officer of Beckon Microparts, a multinational corporation, has a problem. As a world-wide distributor of computer component parts, his company needs to provide parts accurately, quickly and at a fair price. The company has built a large International following by finding special component parts from suppliers over the Internet and has always rated high when new customers use search engines to find component parts. Lately, however, John has noticed the average response time to a customer sales query rising and delivery times slipping. In addition, the growth of the Internet and the inability of search engines to keep up as caused a drop in new orders from this source.
Turning to XML
Sensing that a major problem is brewing, John calls his staff to a meeting. Brittany, the new VP of Information Systems suggests that the company look into conducting e-business in domestic and International marketplaces. She points out that if the company embraced XML, Beckon Microparts could take advantage of faster response times to customer inquiries and higher relevance in new customer Internet searches.
Colin, the XML developer adds, "XML makes searches smarter. You see, the component parts would contain tags that give further definition to the parts. That means customers will not only get the right part, but will find the part faster. We could also use the information to communicate directly with our suppliers." Brittany mentioned that this would be accomplished by sharing a DTD or XML Schema with all of their suppliers so they would have an exact translation from our parts catalogue to their manufactured part, virtually eliminating ordering mistakes. With an XML-based order, all our requests are XML documents that contain a
Jacob, the VP of Distribution, was impressed, but wanted to know what would happen if we changed the numbering of our parts. He pointed out that last week alone, more than 400 parts were either added, updated or removed from our system. Brittany smiled. She then explained, "Because we use XML to represent our data on the Internet and within our supplier chain means that our suppliers and customers are insulated from any changes we might make to our infrastructure. We're insulated from any changes in their systems as well. Data interchange is one of XML's strengths, so we're able to move data across different systems without losing anything in translation."
John wondered about the speed of the new system. How could adding additional code to every element in the system actually speed things up? He asked why this wouldnt take longer to process. Colin responded. "All of our suppliers will send data about their inventory and prices in XML. Our department has authored agents, or bots, that process that data intelligently. For example, we have agents that watch certain memory chips in our inventory control system. When only a few of a particular item are in stock, our agent checks with all our vendors to find out which one has the part in stock and has the best price. Using XML has given us a clear advantage over our competitors."
"Ok, Brittany," said John, "but what about attracting new customers?" Brittany responded that the XML-based parts information from our database turns up on XML search engines all over the world. Customers can use our XML-based approach to find exactly what they're looking for. John smiled, then turned to Laura, the Chief Financial Officer. "Laura, XML sounds great. What can you do with this new technology to straighten out our financial reporting problems?" Laura said, "John, can we hold that question for the next meeting?" John agreed.
Beckon Microparts Finance Department Discovers XBRL
Part B: John Usexml, chief executive officer (CEO) of Beckon Microparts and Laura Usexbrl, chief financial officer (CFO) met to discuss how the financial department could start taking advantage of XML technologies within the finance function. Brittany, the VP of Information Technology, her XML programmer Colin and Sergi, the VP of finance are all in attendance. The companys financial reporting problems are many. First, the Security and Exchange Commission (SEC) reports have been late for the last two quarters. Second, both the Ireland and the German subsidiaries have been late sending monthly closing information to headquarters. In addition, the budget chief has been complaining that information about actual performance is also late. To top it all off, the company has received 18 different requests from financial analysts who follow their stock for detailed information. Laura, the CFO, fortunately has a plan.
"Laura", says John, "have you been able to investigate using XML to help the financial department?" Laura says yes. "Sergi and Colin attended a workshop on XBRL, the new business reporting language based on XML. They are very excited about the possibilities for helping Beckon Microparts." "So, what is XBRL and how could it help us?" said John. Sergi explained, "XBRL, or eXtensible business reporting language, is an open specification that uses XML-based data tags to describe financial statements. XBRL was developed by an International community of financial professionals and is free to use."
"XBRL", Sergi continued, "allows users to place industry standard XML-based tags on financial statement data. Once the financials are tagged, they can then be used again and again without re-inputting the data. For example, the XBRL tagged data can be sent to the SEC, to financial analysts and the budget department without re-working the information. The time savings will be substantial." Colin added that XBRLs strongest point is its ability to do data exchange. The financial closing data from Ireland and Germany, coded with XBRL, will take half the time to consolidate. Laura also mentioned that the 18 requests from the financial analysts, which normally had to be handled one at a time, can now be processed at the same time.
"How is that possible?", asked John. Colin responded, "When using XBRL, I can send tagged data from our system directly to each financial analysts system. As long as we share with them the document rules in our XML Schema, they will then be able to extract any information they wish."
"Our German subsidiary is required to report financial results to the German government according to German generally accepted accounting principles (GAAP)", added Laura. "We can provide them with two sets of XBRL taxonomies, one representing German GAAP and one in US GAAP. They can use the same base data to report in compliance with two different sets of accounting standards."
"Ok, this sounds good. What steps do we need to take to make this happen?", said John.
Copyright © 2008 Saeed Roohani, XBRL Education