There are few areas where the CIO-CFO partnership can pay off as effectively as with the implementation of the Extensible Business Reporting Language (XBRL) in reporting, risk management and compliance processes. CIOs can potentially realize enhanced process efficiencies and effectiveness, while CFOs can potentially realize speed, streamlining and flexibility of reporting functions.

The choice is whether you'll be catching up with mandated time lines and eventual peer pressure or taking advantage of a proven track record with energetic, forward-looking action targeting specific process benefits.

Complying with a regulatory mandate

Every public company is probably already hearing about XBRL due to the recently proposed rule by the U.S. Securities and Exchange Commission (SEC) that would mandate the use of XBRL for company reports to the capital markets. This proposal impacts the largest 500 companies for their 2008 year-end reports and all other public companies in the following two years. So CIOs and CFOs who are not familiar with XBRL will need to be soon.

However, XBRL goes beyond being a new, more useful SEC filing format. It is a key tool for reducing or eliminating the wide range of internal manual processes necessary for operations, management--and, yes, financial reporting. A few leading companies are already benefiting from reduced costs and reporting risk related to standardization and simplification with XBRL--what can it mean for your organization?

In the short term, the application of XBRL to company financial statements may not be a priority for many corporate CIOs due to the existing highly manual reporting and control processes. To put it simply: If company reports were cars, reporting processes would be classified in a "Pre-Henry Ford" era, where each report is manually assembled by highly skilled craftsmen.

Leverage historical examples

Manually applying tags at the very end of the supply chain is exactly what happened when bar codes (i.e., UPC) were first introduced. Grocery store managers quickly realized the benefits of standardization and pushed for earlier application in supply chain processes.

CIOs can wait for the call from the CFOs to apply XBRL earlier in the supply chain or they can proactively engage their CFOs. The opportunity exists to realize significant value by leveraging XBRL to gain control of and streamline internal processes that drive data aggregation from source applications to end reporting, and achieve compliance with the SEC mandate along the way. Here are a few examples:

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