Public Sector Transformation Through E-Government

by Christopher G Reddick

  especially in the area of XBRL implementation, the task of building XBRL

  taxonomy was outsourced to Adobe Systems. XBRL project team mem-

  bers at CH worked closely with Adobe Systems to create Adobe Intelligent

  Forms (AIFs) to support the fi l

  fi ing of the audit-exempt accounts. However,

  the strength of the SEC’s IT department to overcome the diffi

  c

  ffi ulty of tag-

  ging thousands of data elements in the corporate fi

  filings was evident during

  the experimentation and implementation of the voluntary fi lin

  fi

  g program.

  In addition, the phase-in implementation approach allowed the SEC to

  focus on a small number of resourceful corporate fi

  filers and subsequently to

  take on a larger number of small fi

  filers.

  3.5 Access to External Technical and Non-technical Support

  and Information from Stakeholders and Top Government

  The strong interest and support of XBRL adoption among XBRL Inter-

  national Inc.’s members has contributed to building a “mass” of XBRL

  E-Government Adoption of XBRL 205

  stakeholders (XBRL Progress Report, 2008). XBRL International has

  supported the global adoption of XBRL by building a network of regula-

  tors, consulting and accounting fi

  firms, providers of information services,

  professional bodies and business organizations. This type of networking

  has been one of the Critical Success Factors that fostered XBRL adop-

  tion at CH and the SEC. This network was represented by a diversified

  group of stakeholders, composed of software vendors, professional bodies

  (ICAEW, ICAS, and AICPA), XBRL U.S. and XBRL U.K. For example,

  CH’s XBRL project manager is an active member of the Steering Commit-

  tee of XBRL U.K. In addition, XBRL U.K. provided significant technical

  assistance on the presentation and format of XBRL-based Adobe forms.

  This type of strategic partnership was evident with the SEC which part-

  nered with XBRL U.S. to provide technical assistance with building XBRL

  taxonomy structure. In addition, XBRL International provided a critical

  informational venue for CH and the SEC to meet with diff eren

  ff

  t regulatory

  adopters to share their XBRL adoption experience during the conferences

  organized by XBRL International.

  The support extended by top government bodies was a common Success

  Factor at both agencies. At CH, legislative approval and advisory support

  was acquired from CH’s overseeing top government agency: the Business,

  Innovation and Skills (BIS) Department, which played a strategic role in the

  decision making process of adopting XBRL. In addition, the BIS provided

  CH with the specialized accountancy expertise during the process of design-

  ing and building proper data structure and format of XBRL-based Adobe

  forms. The former SEC’s Chairman, William Donaldson, saw the potential

  of XBRL as early as in 2004, while Chris Cox, a succeeding chairman,

  advocated and championed the XBRL adoption process. The E-Govern-

  ment Act of 2002 provided the institutional framework that served as the

  road map for adopting XBRL at the SEC. The U.S. government, represented

  by the Congress, was supportive of disclosing interactive fi

  financial data via

  the SEC’s Interactive Data Initiative using XBRL. In addition, a generous

  fi

  financial budget of over $55 million was approved by the U.S. government

  to modernize the SEC’s electronic fi l

  fi ing systems in 2006, which was lever-

  aged to adopt XBRL. Out of this budget ($55 million), $5.5 million was

  granted to XBRL U.S. to assist the SEC with building XBRL taxonomy

  structure for corporate companies.1

  4 RESEARCH

  FINDINGS

  In this chapter, we have provided a comparative overview of XBRL adop-

  tion process at two prominent government agencies in the United King-

  dom and the United States with emphasis on the Critical Success Factors

  that have impacted this process. Based on the empirical evidence, fi

  five main

  CSFs were examined. The research fi

  findings show that CH and the SEC

  206 Rania Mousa and Yu-Che Chen

  have followed diff eren

  ff

  t routes towards adopting XBRL. CH has opted for

  the voluntary fi

  filing of XBRL-based accounts (Adobe forms), while offer-

  ing reduced electronic fi

  filing fees to encourage presenters to fi

  file in XBRL.

  The SEC followed a voluntary and then mandatory phase-in approach that

  allowed for the incremental adoption of XBRL over the course of 3 years.

  The diff

  fferences in the adoption approaches refl

  flect each agency’s policy in

  adopting new technologies as part of its existing legacy reporting system.

  At CH, XBRL was viewed as a technical solution rather than a novel tech-

  nology that was compatible with CH’s existing web and electronic fi lin

  fi

  g

  facilities. By law, small companies have to present annually their audit-

  exempt accounts to CH, and CH successfully made the business case for

  small companies’ presenters to fi

  file these accounts electronically. CH did

  not see the need to mandate XBRL fi

  filing, as it was introduced inherently in

  the Adobe forms, in which XBRL data were embedded. Small companies’

  presenters were already accustomed to the utilization of CH’s electronic

  fi

  filing facilities, so CH did not need to push any further for mandating

  XBRL. At the SEC, the phase-in approach allowed the SEC to focus on the

  corporate users’ needs, widen the scale of XBRL implementation and eventu-

  ally alleviate corporate users’ concerns about their readability to fi

  file in XBRL.

  As corporate fi

  filers were ready to confi

  figure their fi

  filing systems to be

  XBRL-compatible, the SEC gradually moved to the next stage and applied

  XBRL mandate to provide the required legal authorization of XBRL usage.

  XBRL business case was made for CH and the SEC as XBRL was per-

  ceived as a critical component of their regulatory fi

  filing systems which

  would improve data quality, dissemination and disclosure. This supports

  the regulatory provision for pushing the global efforts toward further devel-

  opment of XBRL capabilities to streamline government operations. The

  SEC was mainly driven by improving the quality of the data dissemina-

  tion and disclosure, while CH viewed XBRL as a reporting medium that

  facilitates capturing and manipulating XBRL data, which could be sold to

  diff

  fferent Internet users and data aggregators. This difference refl ec

  fl ts the

  varying nature and mission of each government agency’s data management

  policy. SEC strictly uses data for fi

  filing and disclosure, while CH discloses

  basic business data to the general public, while selling other bulk data to

  potential data aggregators. It w
as also found that XBRL compatibility to

  CH and the SEC’s electronic fi

  filing systems was an integral part of XBRL

  business case for both agencies, which facilitated the XBRL adoption pro-

  cesses at both agencies.

  A significant fi

  finding in the comparative assessment highlights each agen-

  cy’s technical capabilities. While CH struggled with acquiring and retain-

  ing technical experts, the SEC was strongly equipped with a full-fl edg

  fl

  ed

  IT and service support departments. Given the lack of CH’s technical

  expertise, the task of building XBRL taxonomy structure was outsourced,

  while the SEC relied on its in-house experts to develop XBRL taxonomy,

  in collaboration with members from XBRL U.S. Despite CH’s ability to

  E-Government Adoption of XBRL 207

  overcome the shortage in technical skills, it is important to note that CH’s

  reliance on outsourcing could potentially undermine the agency’s ability

  to strengthen its own IT department. Such a weakness could have its own

  future ramifi

  fications, as CH plans to expand the use of XBRL for the fi lin

  fi

  g

  of large companies’ audited accounts, which contain thousands of data ele-

  ments that need to be tagged.

  Stakeholders’ participation was found to be a key Success factor. The

  literature highlights the signifi

  ficance of having top government support,

  which facilitates the allocation of needed resources to drive e-government

  initiatives. Top government support was represented by the strategic assis-

  tance extended by the BIS and the U.S. government offi

  c

  ffi ials who pro-

  vided appropriate technical and fi

  financial support to CH and the SEC,

  respectively. Several IT experts at government agencies, represented by

  the IT professionals at the SEC, and those at the private-sector software

  industry, represented by Adobe Systems, were among the most important

  providers of external technical support during the XBRL adoption pro-

  cess. Through formulating strategic partnerships with several members at

  XBRL U.S. and XBRL U.K., CH and the SEC managed to acquire and

  complement specialized technical expertise, which expedited the process

  of implementing XBRL.

  5 CONCLUSIONS AND PRACTICAL SIGNIFICANCE

  It can be concluded that the assessment of the Critical Success Factors

  across CH and the SEC provides an insightful comparative overview of the

  XBRL adoption process. The fi

  findings of this research support the impor-

  tance of overcoming technical complexities, mobilizing organizational and

  technical resources, making the technology business case for the adopting

  agencies and potential stakeholders and seeking external support through

  building strategic partnerships with public and private-sector organiza-

  tions. Understanding the Critical Success Factors encountered in adopting

  electronic government initiatives is a high priority for policy makers. This

  was evident at CH and the SEC which recognized the functionalities of

  XBRL as a remarkable data reporting and processing tool that transformed

  the electronic fi

  filing process and enhanced their e-government efforts. The

  process of adopting XBRL and identifying the Critical Success Factors

  aff

  ffecting it highlight the importance of electronic reporting technologies to

  government agencies, and the applicability of the CSFs in devising strategic

  action plans for developing potential large-scale government projects in dif-

  ferent national contexts.

  This research has generated several practical management recommenda-

  tions. We suggest that a broader critical mass of existing XBRL regulatory

  adopters and stakeholders is essential for fostering the XBRL adoption pro-

  cess for any future XBRL adopter. Evidence also suggests that strengthening

  208 Rania Mousa and Yu-Che Chen

  the in-house technical capabilities of government agencies is an important

  driving force in e-government adoption. If technical capacities continue to

  be lacking, the process of adopting e-government initiatives could be severely

  undermined. Heightened awareness campaigns featuring success stories of

  XBRL adoption and building successful business partnerships are important

  catalysts in the adoption and development of sustainable e-government.

  NOTES

  1.

  http://www.cpa2biz.com/Content/media/PRODUCER_CONTENT/News-

  letters/Articles_2007/CorpFin/Serious_About_XBRL.jsp

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