XBRL -- Extensible Business Reporting Language -- is a taxonomy specification that uses XML-based data tags to describe the information in companies' financial statements. The U.S. Securities and Exchange Commission this month launched a pilot project to assess the viability of XBRL tags within financial statements. Such tags would make it much easier for computers to access and make use of that data.
Robert Kugel of Ventana Research provides a nice overview of XBRL in a story we're running from Intelligent Enterprise. Moreover, he predicts that analysis of competitors' XBRL-tagged information will become a required expertise at most companies.
"This information can be used for competitive assessments, operational benchmarking, sales planning and other activities," Kugel says. "We advise finance organizations to establish a competitive intelligence unit responsible for providing information -- about competitors, customers, markets, trends and so forth gleaned from XBRL data -- to business units in a useful form."
The SEC hasn't pushed companies very hard to adopt XBRL-based reporting. But XBRL-tagged information on publicly traded firms is on the horizon, from private suppliers such as Edgar On-Line. Once the data becomes widely available, expect a competitive analytics explosion. Such analysis is still mostly in the "idea stage," but it's precisely at this moment that the smartest companies begin to investigate potentially horizon-transforming changes such as XBRL.