“If we had a single ERP system, I think we could close the books in one day,” Hayes says. But he doesn’t think it makes sense to impose the cost of conversion to a single ERP platform on six distinct subsidiaries given how fast the organization closes already.

As Pearson’s and UTC’s experiences show, a unified technology base can make an efficient process execute faster, but Hackett Group’s Holland advises that CIOs first identify the right business processes for the ERP or other systems to execute.

In fact, that’s Pearson’s strategy, says Gorvett. With a consistent financial process in place that delivers what’s needed, the company is now able to focus on consolidating its ERP platforms. And while UTC doesn’t expect to see a single instance of ERP across all six subsidiaries, it is moving to consolidate each unit on just one ERP system.

WHY REPORTING IS DIFFERENT
Even organizations that have fast closes find it hard to reduce the time it takes to report results to investors and regulators. UTC takes only five days to close its books each quarter, but it takes another 17 days to prepare the 10-Q quarterly filings for the SEC. And the annual 10-K takes a few days more.

The review process relies largely on human effort. Lots of people—executives, legal staff, board members—have to go through the financial data and projections, as well as the legal, labor, personnel and other issues that may need to be disclosed. Even if automated tools are used to gather all the financial data for these filings (rather than just the data needed to close the books), this other information requires human judgment to articulate. And not all organizations have knowledge management systems that can track and make such information easily available, says KPMG’s Kuehn.

To speed the process and improve filing accuracy, UTC deployed a legal case tracking system so the status of all legal issues can be found quickly. The company is also using a two-year-old technology standard called the Extensible Business Reporting Language (XBRL) to tag its filings, and that’s a horse of still another color.

A NEW BUSINESS LANGUAGE
XBRL has been touted by the SEC as a way to make information more easily accessible to investors and regulators, but there’s a direct benefit to the enterprise itself. XBRL makes all information in a filing accessible through standard, tag-based formatting, as XML does for transaction data. But XBRL also provides structure for validation rules, queries and analysis rules, notes Mike Willis, a Pricewaterhouse¬Coopers partner. If XBRL were introduced throughout the enterprise’s financial closing and reporting process, rather than simply used as a report format after the fact, users would gain new controls and insights into their data, Willis says. “They can automate analytic rules rather than auditing manually, which would reduce costs and speed the process,” he adds. Plus, the use of XBRL would ensure that a company’s reports reach their stockholders (and analysts) unfiltered by third-party aggregators. “It lets companies tell their own stories,” says Willis.