COMMENTARY--The Sarbanes-Oxley Act aims to stem conflicts of interest and hold companies more responsible for their accounting practices. AMR Research of Boston, MA estimates that most large corporations will each spend upwards of $3 million to implement the internal controls to bring their companies into compliance. As finance executives come to grips with what Sarbanes-Oxley means to their companies, they are looking toward IT vendors for support.
The case for automating and standardizing processes and controls is clear. Of key concern is the ability to reliably trace from a reported figure back through the business processes and source data that generate the figure. To help address these new requirements, many are turning to XML, an enabling technology that allows tighter controls over data formats, integrity and transformation.
While far from perfect, companies have successfully harnessed computers to manage the vast amounts of business data. Terrabytes of data are routinely managed by corporate IT. In contrast, while corporations have succeeded in managing data volume, they still struggle to manage data complexity. Consider the fact that, from a standards perspective, commercial database vendors support only a few interchangeable data types such as strings, integers and currency values.
Yet, even the simplest business manages, manipulates and reports on hundreds of different types of data. For example, while revenue and profit are both fundamentally the same type of data (currency) from a database perspective, they are drastically different from a finance perspective. Furthermore, the exact meaning of data types like revenue can vary from organization to organization depending on the business type, current accounting rules, etc.
Where business systems currently fail is in the lack of a standards-based way of capturing not only business data, but also the "data about the data" or business metadata. Metadata allows data types such as profit and revenue to be described and managed as accurately and predictably as current technologies manage simple bits and bytes. XML is a metadata language that was developed to bring order to the data environment on the Internet. In that environment, the XML language has been shown to be flexible enough to model complex data "taxonomies," inter-program communications, web page layout and process modeling, just to name a few uses. Broad industry support for the standard has made tools inexpensive and plentiful for working with XML.
MetraTech's native XML infrastructure and the enhanced operational features of its recently released MetraNet 3.5, are helping customers as they struggle with new compliance requirements. MetraTech's suite of XML-based products provides powerful tools to manage and audit the entire billing process.
Mark Kelly, CTO of ACT Teleconferencing Inc. stated In a recent interview with eWeek, "We had a complicated situation with nonstandard billing and nonstandard financial management systems. If we really wanted to grow, we had to put some regimented processes in place. Standardizing systems makes it easier for management to feel confident in the numbers it reports". Formed from the merger of several regional phone companies around the world, Golden, CO's ACT chose MetraTech Corp.'s MetraNet billing software for its global operations.
As the finance community works to bring even greater accuracy to their reports and processes, they are turning to XML to help automate and streamline their compliance efforts.
biography
As CTO of MetraTech, Jim Culbert leads the company's technology strategy, product innovation and standards initiatives. He joined the company in 1998 as vice president of engineering and has nearly 20 years of experience delivering innovative solutions from Internet application development in the network layer through complex Web Services.
