The federal government is littered with IT modernization projects that cost too much, took too long and delivered too little. When Richard Heroux joined the Securities and Exchange Commission to head up modernizing its electronic disclosure system known as Edgar, he was determined to learn from that legacy of failure. Armed with a master’s degree thesis that plumbs the depths of federal modernization mistakes, Heroux applied his research to the SEC’s three-year, $22.5 million project.

Heroux’s academic work paid off. The revamped Edgar system was successfully deployed on time, on budget and met its stated goals. In use since 2001, the modernized Edgar (short for electronic data gathering, analysis and retrieval) is a Web-based system that increases efficiency, streamlines bureaucracy and reduces the burdens of regulatory compliance. It has improved the financial disclosure filings system for a varied and sundry group of constituents both inside and outside the SEC, and is now the recipient of an Enterprise Value Award. Gregor Bailar, executive vice president and CIO of Capital One in Falls Church, Va., and an Enterprise Value Awards judge, cites Edgar for "literally redefining the interface among the investor, the actual stock share issuer and the SEC."

Broad Mission

As the regulatory agency that oversees capital markets in the United States, the SEC’s main mission is to protect investors by ensuring the integrity of the securities industry. With Edgar, the SEC is now better equipped to carry out that mission. Edgar automates both the collection and dissemination of the financial data that public companies and their affiliated executives and officers are required to file with the SEC. By making that data available to investors via the Internet within 78 seconds of receipt, Edgar gives investors a foundation for making more informed decisions. William G. Heninger, an assistant professor of information systems in the School of Accountancy and Information Systems at Brigham Young University in Provo, Utah, has studied Edgar’s effect on the market. "When the filings hit [electronically], there was a significant change in stock prices," says Heninger, something that didn’t happen with the SEC’s previous paper-based disclosure system. He says that Edgar has also created a level of fairness that was not available before: "Edgar put detailed information out into the hands of the average everyday investor." Previously, such information was the exclusive domain of investment companies, pension fund managers and other investment professionals. In short, Edgar?by furnishing investors with timely and actionable financial information online?enables the SEC to increase both the fairness and efficiency of capital markets. At a time when investor confidence is battered and the SEC’s leadership has garnered criticism, Edgar offers hope that e-government can work.