Finance & Information Technology April 2010

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Finance & Information Technology April 2010



FERF would like to thank Gartner for sponsoring this issue of

Finance & IT News


Discover CFO Priorities for 2010

Join us Tuesday, May 4, for a complimentary webcast where we will discuss the most critical survey findings and what they mean for your organization as you navigate the recovery.


2 times available!

Register for the 10 a.m. EDT Session    |    Register for the 2 p.m. EDT Session


The 2010 Gartner-CFIT-FERF Technology Survey captured 482 senior financial executives’ views of technology—double the responses compared to 2009.


The study provides a consistent picture of the CFO’s view of technology and offers an important opportunity for you to benchmark your internal initiatives and perspectives with those of other finance organizations.


In This Issue

Webinar on Results of CFIT’s Annual Survey of Technology Issues

CFIT Meets at Microsoft

o    Finance at Microsoft

o    IP Portfolio Optimization at Microsoft

o    GRC at Microsoft

o    Cloud Strategy at Microsoft

o    Gaming the Forecast with Crowdcast

Intel to Host Next CFIT Meeting

Cloud Computing: Harnessing the Power of Simplicity

Survey on the CFO/CIO Relationship


SEC’s Public Seminar on XBRL: Webcast Now Available

XBRL US Labs Introduces Online Consistency Checks

AAA XBRL Teaching Workshop

Audit Committee Checklist and Assessment

FEI’s Committee on Finance & Information Technology (CFIT)



Webinar on Results of CFIT’s Annual Survey of Technology Issues


·         The CFO is a major technology influencer, with potentially more clout in technology investment decisions than the CIO

·         Web-oriented software, cloud computing, social networking, and GRC are viewed as leading technologies in the finance organization

·         Organizations are addressing data quality issues, and ramping up efforts

·         The XBRL opportunity is misunderstood, and current initiatives are mainly outsourced


These are just some of the key findings from the new FERF research report, Technology Issues for Financial Executives: 2010 Annual Report. On Tuesday, May 4, John Van Decker, Gartner Research VP and Bill Sinnett, Director of Research, Financial Executives Research Foundation, will discuss these and other findings. This Gartner Webinar will describe trends for the use of technology in Finance, Finance’s perspective on the use of technology in the enterprise, and compare the survey results to the 2009 study.


FEI’s Committee on Finance & IT (CFIT), helped develop the questions for the 2010 survey, which captured 482 senior financial executives’ views of technology—double the number of responses compared to 2009.


The study provides a consistent picture of the CFO’s view of technology and offers an important opportunity for you to benchmark your internal initiatives and perspectives with those of other finance organizations.


For more information, and to register, click here.

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CFIT Meets at Microsoft

The March 2010 CFIT meeting was hosted by CFIT member Taylor Hawes at the Microsoft Executive Briefing Center in Redmond, Washington. CFIT members heard a number of presentations on top of mind issues, including GRC (Governance, Risk and Compliance), Forecasting and Cloud Strategy.


Power Point presentations from the meeting are posted under “meeting information” on the CFIT Web site. (Login is required.)


Finance at Microsoft

FEI member Bob Weede, Microsoft’s Assistant Corporate Controller, reviewed Microsoft’s quarterly close process, and how they leverage technology with Share Point.


Bob first discussed Microsoft’s expectations of Finance:

·         No material weaknesses or significant deficiencies at any period end;

·         Rapid response to remediate deficiencies;

·         Control improvements = process improvements;

·         Efficient implementation to minimize external audit costs;

·         Sustainable processes; and

·         Continued commitment to internal controls by operational and financial management.


Bob described how Microsoft Finance uses Share Point in the close process. He then listed the benefits achieved:

·         Reduced consolidated close by five days;

·         Produced the 2009 annual filing in 29 calendar days;

·         Completed the quarterly filing simultaneously with the earnings release;

·         Completed the XBRL filing simultaneously with the 10K and 10Q;

·         Streamlined the auditor engagement;

·         Avoided any significant deficiencies or material weaknesses;

·         Reduced the e-mail pileup with enhanced productivity.


IP Portfolio Optimization at Microsoft

CFIT member Taylor Hawes, CFO, Intellectual Property & Licensing, discussed patents at Microsoft.


Taylor said that the real value of a company is its Intellectual Property (IP). He said that there are four categories of Intellectual Property:

·         Patent

·         Copyright

·         Trademark

·         Trade Secret


Taylor then described an IP Optimization Framework:

·         Goals and Tactics: Develop taxonomy and playbooks to execute tactics and goals

·         Investment Value: Discern between financial, defensive and competitive value

·         Method of Optimization: Design portfolio optimization techniques given constraints and objectives.


Finally, Taylor described the financial objectives for portfolio optimization using a quantitative discipline that enable optimized results:





Patent Portfolio

Top patent issuance and quality

Optimized portfolio investment by business division

Investment Tradeoffs

Invest in secondary market

Measure value trade-off in alternative strategies

Manage Costs

Aggressively defend Microsoft in litigation

Use alternative vehicles to minimize cost of litigation


IP investments by business groups assessed independently

Uniform measurements for ease of comparison and decision making


GRC at Microsoft

Jerry Leishman, Senior Program Manager Compliance Solutions, and Marilee Byers, Director, Corporate Finance, discussed Microsoft’s Governance, Risk and Compliance Management Suite.


Jerry Leishman first described Microsoft’s GRC solution areas, including:

·         Regulatory Compliance & Controls

·         Risk Analytics & Reporting

·         Security & Privacy

·         Business Continuity

·         Document & Records Management


Jerry said that the solutions for these areas would become part of Microsoft’s System Center, its GRC Management Suite, which would be launched in April.


Marilee Byers described the objectives of Microsoft’s System Center:

·         Support compliance programs;

·         Improve integration with automated controls; and

·         Migrate to one GRC platform to leverage compliance efforts across the company.



Cloud Strategy at Microsoft

Bob Anderson, Senior Director, IT Business Evangelism, discussed Microsoft’s cloud strategy.


Referencing the NIST (National Institute of Standards and Technology) definition, Bob said that Cloud Computing is a model for enabling:

·         Convenient, on-demand network access

·         To a shared pool of configurable computing resources

·         That can be rapidly released with minimal management effort.


Bob said that Cloud Computing has five essential characteristics:

·         On-demand self-service

·         Broad network access

·         Resource pooling

·         Rapid elasticity

·         Measured service


Bob said that Cloud Computing was the fifth generation of computing:

·         1970s – Mainframe

·         1980s – Client/Server

·         1990s – Web

·         2000s – Service Oriented Architecture

·         2010s – Cloud


Bob said that there were at least three Cloud scenarios:

·         Move – Migration of existing applications

·         Enhance – Addition of service capabilities

·         Transform – Building scale-out applications


Gaming the Forecast with Crowdcast

Mat Fogarty, CEO of Crowdcast, discuss how to leverage collective intelligence for real-time, accurate forecasts.


Mat said that Crowdcast, from “Crowd Forecast,” quantifies the wisdom of crowds. He explained that:

·         Forecasts are often subject to bias, stickiness and gaming

·         Crowdcast leverages the wisdom of employees and partners

·         It is based on a prediction market

·         It produces unbiased, real time forecasts of key metrics

·         It can be valuable for new products, key projects and external metrics


Mat then described a prediction market:

·         Based on stock market or betting market

·         Aggregates knowledge of diverse groups

·         Players weight forecasts

·         Players are rewarded for early, accurate predictions

·         Anonymous and meritocratic

·         Accurate players are given more weight over time.

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Intel to Host Next CFIT Meeting

CFIT’s next meeting will be hosted by Intel Corporation in Portland, Oregon, on June 17 and 18, 2010. For more information on the CFIT committee, please contact Bill Sinnett at (973) 765-1004.

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Cloud Computing: Harnessing the Power of Simplicity

The concept behind cloud computing is simple: it lets you run computer applications over the Internet, without having to buy, install or manage your own servers. You can run your company's IT operations with nothing more than a browser and an Internet connection. Applications, operating systems, servers and network switches are all managed by your cloud computing vendor.


Cloud computing differs from conventional software in a number of ways:

·         Fast deployment: You can be up and running with ERP, CRM or e-commerce applications, on a local or global scale, within a few months, rather than the six to 12 months it would take to install and troubleshoot conventional servers and software

·         Optimized performance: The cloud adjusts to your performance needs, dynamically assigning server cycles whenever and wherever you need them, and automatically adjusting to spikes in your business.

·         Subscription-based pricing: You pay as you go, often on an annual basis, unlike conventional systems where you have to make a major up-front investment in licenses, hardware and software.

·         Low overhead: Upgrades, maintenance and system administration take place in the cloud and are managed by the vendor.

·         High availability: Cloud software architectures are designed from the ground up for maximum network performance, so they frequently deliver better application-level availability than conventional, on-premise solutions.

·         Security: For many companies, the level of security and availability, disaster recovery and back-up provided by a software-as-a-service provider far exceeds that which they can provide themselves.

·         Ease of access at anytime, and from anywhere: Cloud computing is "always on," making it easy to grow your business and support remote workers and locations, or support a highly mobile sales or service team, because people can access the cloud any time, day or night, from any browser, desktop or mobile device around the globe, 24x7.

·         Energy savings: By eliminating the need for on-premise hardware, cloud computing reduces overall server room electric consumption as well, which can save a mid-size businesses more $10,000 or more per year, according to a recent sustainability impact study.


[This article was taken from “The Benefits of Cloud Computing,” posted on the NetSuite Website.]

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Survey on the CFO/CIO Relationship

In offices across the world, CEOs are asking “How do we seize more opportunity against competitors as we come out of this recession?” followed not too far by “And how will IT help us do this more quickly?” and then “How do we know what value we are getting from IT?” Whether the enterprise is recovering from a near-death experience or flexing muscles to leap over weakened competitors, increasingly automated enterprises are relying more on IT for enabling profitable revenue.


CFOs report several needs. Three stand out for many enterprises:

·         Working with CIOs to better allocate business-IT project funding and measure the value;

·         Working with CIOs to understand the dependencies of business initiatives on IT and then use IT to reduce the risk in those initiatives (such as a new product or distribution channel); and

·         After lean times, improving financial management systems to get better visibility and/or automate recent compliance burdens


Through all this, there is an emerging view of a new CFO-CIO (and often strategy leader) partnership to help CEOs, COOs and business line leaders improve products more quickly, gain more share from customers and open new sales paths.


To respond to these questions, there is already a reasonable body of knowledge. This is highlighted by recent work that shone a brighter light on practical approaches such as:

·         Managing IT as a cost structure, rather than just costs;

·         Creating IT metrics that tie better to both business objectives and the business-IT investment portfolio; and

·         Using IT to better manage business risk


In addition to this “hard” analysis, the industry press is filled with stories on financial management applications and words of wisdom from individual CFOs and CIOs. In reading war stories and opinions, the reader wonders, “Is this right for my circumstances?” “Which practices are most relevant to me?” “What is the next thing I need to fix?” In a world of scarce time and money, leaders would like insight more tangible than “once upon a time in one company and one circumstance…” 


To gain more systematic, you can help yourself and your colleagues by “taking ten” minutes to join a short survey to build more practical knowledge of what works. As you’ll see, this is not another high level “pulse” survey. Instead, it is designed to understand needs, maturity and effectiveness, and then to point to top priorities for further research.


You’ll receive the benefits of the survey in several ways:

·         Learn the shared insights in upcoming FEI and FERF publications;

·         Your CIO can read the collective CFO perspective as the insights appear in publications for CIOs;

·         You and your CIO will receive improved best practice guidance from ISACA, the 86,000 constituent, 160 country IT management organization; and

·         You will prioritize future “what works” research that will flow from this survey.


To join your colleagues today, just click to take ten minutes to help .


[This article and survey was submitted by Brian Barnier, who has a split career between “the business” and IT. He works to bridge the two sets of needs to get greater business benefit from IT. He has a unique vantage point because of his experience in practical projects, best practices committees, research, writing and teaching professional education across industries and countries. His writing includes contributing to the book Risk Management in Finance (Wiley, 2009). In 2009, he presented to over 1,000 people in live events and nearly as many in webinars. He is currently with ValueBridge Advisors and previously was with IBM, Lucent and AT&T. He can be reached at]

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The SEC has launched a new portal,, as a single stop for information about XBRL, particularly information about creating and submitting XBRL-tagged interactive data files in compliance with Commission rules.


This new portal page provides:

·         links to existing SEC-produced material;

·         a “What’s New” section to make it easy to find the most up-to-date information; and

·         a section that enables you to contact the SEC’s Office of Interactive Disclosure via e-mail, phone, or postal mail.

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SEC’s Public Seminar on XBRL: Webcast Now Available

On Tuesday, March 23, the Securities and Exchange Commission (SEC) staff conducted a public seminar to help companies and preparers comply with rules requiring financial reports to be filed using eXtensible Business Reporting Language (XBRL).  An archived copy of the webcast has been posted, along with the slides and an index that provides a basic outline of the issues discussed during the seminar. 

All three are available at

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XBRL US Labs Introduces Online Consistency Checks

XBRL US has launched the XBRL Consistency Suite, a set of online XBRL tools that help public companies identify inconsistencies in XBRL documents related to the use of the XBRL US GAAP Taxonomy.  In the over 1,400 XBRL financial statements that have been submitted to date, thousands of errors have been identified, including incorrect use of signs, missing XBRL-tagged elements, and tags that should not have been reported, among others.


The XBRL Consistency Suite ( performs over 6,000 tests against a company's XBRL document and produces a report that shows taxonomy-specific errors that have been made.  Companies, or their service providers, should run the tool on their XBRL-formatted financials before they submit them to regulators and investors as a final step in the XBRL creation process.  It also includes access to a database of XBRL documents submitted to the SEC, updated regularly. 


Subscribers can perform basic analytics on the database to see what concepts are being used by their peers and what extensions are being created by searching on the full set of filings, or searching by industry or company. 


For more information, download a white paper at  which outlines the kinds of common errors that have been identified, and visit the XBRL US web page to view a demonstration of the XBRL Consistency Suite,

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AAA XBRL Teaching Workshop

In order to help meet the needs of faculty in both two year and four year institutions who teach financial accounting, management accounting, auditing or accounting information systems and need to be familiar with XBRL, the American Accounting Association is offering an intensive three-day workshop on XBRL.


Applications are now being accepted for the American Accounting Association XBRL Teaching Workshop to be held July 28 - 30, 2010. The workshop will be taught by Skip White (University of Delaware) and Stephanie Farewell (University of Arkansas - Little Rock) at the Parc 55, San Francisco hotel prior to the AAA Annual Meeting. It will encompass both the underpinning technology foundations of XBRL and, more importantly, applying XBRL to business problems.


The workshop will give equal emphasis to the accounting and technology foundations and to the practical applications of these foundations in the classroom. Particular attention will be given to working with the US GAAP taxonomy and preparing reports with that taxonomy. Participants will become immediately productive in teaching XBRL in a range of courses within the undergraduate and postgraduate programs.


While familiarity with the Windows operating system and PC software is necessary, no prior knowledge of XBRL is needed. Space is limited for this workshop. The registration deadline is Wednesday, June 30 and space is limited. In the event that the workshop is oversubscribed, participants will be placed on a waiting list. Additional information and applications are available online at

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Audit Committee Checklist and Assessment

Audit-committee accountability, and thus independent assessment, is critical in today’s environment. The Board Institute, Inc. (“TBI”), a leading provider of comprehensive, independent, web-based evaluation tools to help directors and officers improve their boards of directors, helps boards of directors reduce risk.


The Board Institute has created professionally sound and objective evaluation tools in cooperation with best of breed, national resources and partners. The Audit Committee Index™ was developed in collaboration with Financial Executives Research Foundation. Other tools include The Board Index™, The Compensation Committee Index™ developed in cooperation with World at Work, The Governance Committee Index™ developed in cooperation with the Center for Effective Organizations at University of Southern California, and The Director Index™ developed in cooperation with Mark Edwards, Ph.D., founder of 360º Feedback.


RiskMetrics/Institutional Shareholder Services, the standard in financial risk management, recently accredited TBI’s evaluation tools as satisfying director corporate governance education requirements. Thus, for the first time, corporate directors are able to fulfill board assessment and educational mandates through a single, effective, on-line solution.


According to a recent study by PriceWaterhouseCoopers, 79% of directors believe that an effective board evaluation process is the most important technique for assuring peak performance by directors. Over 88% of public company boards now conduct annual evaluations, up from only 33% in 2002.


The Board Institute's Indexes include targeted information on best practices, Exchange mandates and regulatory requirements, which are continuously updated by a broad range of governance and research experts. The Indexes also provide response ranges, variances, anonymous comments and feedback on approximately 70 areas in each Index. The Indices may be customized to accommodate the key metrics of individual boards of directors.


For more information about The Audit Committee Index, click here.


For more information about The Board Institute, click here.

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FEI’s Committee on Finance and Information Technology

FEI’s Committee on Finance and Information Technology (CFIT) is a national FEI technical committee that addresses the needs and interests of financial executives as strategic leaders, as they strive to realize measurable and sustainable performance improvements while maintaining financial control.


For more information about CFIT, visit its Web page, log in with your FEI member password and use the left-hand navigation bar to select your interests. For example, click on “Meeting Information” and you can download meeting minutes; scroll down to “Archived Meeting Materials” and download the Power Point presentations made at the meetings.

For additional information, please contact Bill Sinnett at 973.765.1004.



Bill Sinnett, director of research for Financial Executives Research Foundation (FERF), wrote this issue of Finance & Information Technology News.

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FERF is a 501(c)(3) educational foundation, supported by individual and corporate donations and sponsorships.


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