I am very proud of my contribution to the SICONFI project of the Department of Treasury in Brazil as the architect of the SICONFI XBRL Taxonomy, published yesterday and available for download here.
First of all, I am proud because of the remarkable results that the SICONFI Taxonomy Development Team achieved in just over two years.
Starting with little or no XBRL knowledge or experience, they were able to quickly get to the point in which they could fully leverage one of the greatest benefits of this technology. XBRL is a platform that allows business domain experts to represent their knowledge of the data to be collected and of the requirements for it to be complete, useful, and valid, in an “executable” format, so that the IT function does not have to interpret that knowledge and embed it into software applications. The leadership of Project SICONFI recognized the value of this key XBRL feature from the very beginning, eager to reap its benefits in terms of quick execution, flexibility of the project IT infrastructure, and minimization of maintenance costs due to requirements that typically evolve and change over time. That vision survived through the various stages of implementation, something that did not happen in many other projects that I have been part of, and the first results are already there to be seen.
The other reason why I am proud is that SICONFI is a groundbreaking project in many ways.
It is about Government-to-Government reporting, unlike the vast majority of XBRL programs, which are typically business-to-Government concerns. I have discussed previously the impact that the Project SICONFI experience is having on similar initiatives in other countries, such as the DATA Act in the United States. More in general, its relevance for data transparency and open government initiatives worldwide is certainly significant.
One of its key objectives is to enable better, more efficient reports generation processes for its regulated entities, which frequently have very limited human and IT resources to meet their institutional goals, let alone for reporting. Given the frequent complaints about the complexity and the perceived costs related to the generation of XBRL reports, it may seem counter-intuitive that SICONFI selected XBRL to fulfill this requirement. The truth is that in many XBRL programs out there this requirement is not necessarily an explicit focus, and when it is, it is generally left to “the market” – as in the solution providers market – to come up with ways to make the generation of reports efficient and affordable. Problem is, “the market” loves proprietary solutions, and business models that do not necessarily align with these objectives. Project SICONFI took a more proactive approach by including in its taxonomy architecture XBRL Global Ledger (XBRL GL), an XBRL taxonomy published as a Recommendation by XBRL International that enables one-click conversion of accounting and financial data in XBRL reports. When Brazilian Government agencies, States and Municipalities will start reporting using XBRL GL later this year, they will find that generating XBRL reports can indeed be easy and inexpensive, and SICONFI will have the added benefit of enhanced data quality in the reports they receive.
I really look forward to the next steps in the implementation of Project SICONFI, I am certain that it will provide a wealth of lessons learned and best practices that many other XBRL initiatives will benefit from.