You may have heard the hype about XML in its many flavors and forms, and all the benefits it can bring to those who deal with the electronic dissemination of financial information.
You may have heard that XBRL, an XML sub-language, will transform the way you report results and that NewsML will standardize the business of press releases.
But this revolution in IR web sites isn’t a rapid-fire affair. It’s a gradual process that will see the much heralded benefits of XML realized only as listed companies, IR service providers, software vendors and third-party data providers agree on which standard sub-languages to use and when to use them.
There are hundreds of XML sub-languages and the number that impact on IR professionals is growing. But it’s not too confusing if you consider that all share the basic benefits of XML over HTML.
These are both mark-up languages; they describe information in a way that allows web browsing software to know what to do with it. In HTML, for example, the mark-up tags are included in angular brackets. So the HTML tags Net profit = $300,000 will tell a browser to display that equation in bold type. With XML you can also use tags that tells a browser what that content is, not just how to make it look on the screen.
The biggest advantage of XML is that by defining what that specific content is, smart browsers and other software can perform more complex tasks such as fine-tuned searching, comparison and analysis. Data formatted in XML can also be more easily transferred between incompatible systems.
Work in progress
Although XML’s first specifications were published by the World Wide Web Consortium (W3C) in 1997, it is still very much a work in progress. The developer community has gradually been embracing it in one form or another, with hundreds of specific versions of XML being developed for niche industries and business areas.
If your investor relations web site is hosted by an outside service provider that specializes in IR services, then basic XML has probably been playing a part in your site for over a year. But more specialized languages are now gaining momentum.
Recently XML has been pushed to the forefront of investor relations, not only by the working groups and industry associations continuing to develop and promote XBRL and NewsML, but also by the announcements of branded XML offerings from two US-based web site aggregators, CCBN and Shareholder.com. Called IR-XML and irXML respectively, there could well be some confusion about the names, but they are actually quite different when you drill down to the details. In common, however, they both allow IR departments to get the same level of service as before while hosting their web sites behind their own firewalls for quick and easy updating and maintenance.
Who’s doing what?
Shareholder.com announced in October that all of its clients’ web sites would now be developed entirely using irXML, the development solution it launched and filed a trademark for back in June. The company is trying to sponsor irXML as an industry standard and build a community around it to help develop the standard further – much as Reuters has done with NewsML. A look at the web site www.irxml.org, however, shows that things are at an embryonic stage.
Don Mayo, lead irXML developer at Shareholder.com, says that as the sites of its 700 clients come up for redesign they will be written or translated into irXML. ‘Larger cap clients might redesign every eight months, but smaller clients might go longer than a year,’ he comments. ‘We expect that within 12-18 months 95 percent of all clients will have web sites developed totally with irXML, whether they be hosted on our side or behind their own firewalls.’
By using its new XML standard, Shareholder.com hopes to benefit both its customers and itself. Clients get increased flexibility and portability because irXML enables them to migrate a web site currently hosted at Shareholder.com to any type of server worldwide. Whether it’s the entire site or just one or two pages, they can maintain the web pages themselves, or have the service provider do it by accessing their server through the firewall.
Shareholder.com itself benefits by standardizing all its data feeds, both inbound from third-party sources and outbound to its distribution channels. This gives it the flexibility to build systems that have a really generic interface as opposed to the many ad hoc systems that it had been working with over the past five years or so.
‘Clients like it,’ sums up Shareholder.com CEO Ron Gruner. ‘Particularly as they become more sophisticated, the decision of who is responsible for the IR web site is migrating from one person, perhaps the IRO or CFO, to a team where the webmaster is involved, IT teams, marketing people and so on.’
Chris Campbell is web communication manager at Exabyte Corp, a Denver-based manufacturer of tape storage devices. He says his company was keen on the XML delivery of data feeds as well as the total XML web design offered by Shareholder.com because it had an internal web development team that felt it could handle many of the tasks involved in the IR site.
‘We used to have a model like a lot of companies where if we needed to have something changed on our IR web site we had to go through our provider and they had to go through their project management process,’ he says. ‘We’re lucky enough to have some very good programmers of our own who can work with this stuff very quickly. Now we don’t have to exchange e-mails, make calls and wait a couple of days just to get one sentence changed on one page.’
CCBN, with its IR-XML offering also launched in June, has taken a different approach, although it too touts flexibility as the driver behind XML. It was already using XML to deliver its Company Boardroom product to major portals, and its StreetEvents events calendar product to investment professionals for around a year and a half, so extending it to IR web clients was a logical move. But IR-XML isn’t trying to become a special subset of the language. Rather, says product manager TJ Keen, CCBN uses ‘pure’ XML – the standard set of data tags agreed upon by the W3C – to deliver various kinds of data feeds, currently to around 30 of its 2,500-plus clients.
‘We’re really targeting sophisticated clients that understand the technology and want to integrate it in some imaginative ways,’ Keen explains. ‘If you look at some of our competitors’ feeds, they really commingle the data with the presentation. So you can get XML formatted in HTML, which fundamentally doesn’t make any sense when you look at an XML feed. They’re kind of saying, Give us your ticker, pick a palette and we’ll ship you some XML that is formatted the way you want it. We’ve taken a different approach.’
Keen is also not convinced that there needs to be a special investor relations XML standard and says that promoting one could lead to unnecessary confusion among corporates about what various forms of XML can actually do for them and whether they need the new technology at all.
Sub-standards
Osbert Kho, the chief technology officer with irasia.com, an investor relations platform for listed companies in the Asia-Pacific region, is sitting on the fence. He plans to evaluate irXML once Shareholder.com posts the schema on the web site at www.irxml.org, but wants to wait and see if it actually becomes widely adopted. To become a true industry standard it will require a diverse community of developers to support it – not just the one company that initiated the idea.
Like many other web site services companies, irasia.com is already using XML internally, creating new data tags as necessary to fit its applications. It has standardized its own slightly altered version of XML for its internal use, but also has to deal with the proprietary XML formats used by third party data providers. It does this by using tables to translate the different tags.
And there’s the rub. Although the W3C has agreed on a standard set of data tags for ‘pure’ XML, there really is no requirement to define data in a particular way. Companies can create their own set of XML tags specific to their needs.
However, it’s obvious that if a standard for certain types of content were to be universally agreed upon, then delivery and management of that content would be much simplified. The problem is that even well supported XML derivatives, with clear boundaries of application and promising useful new functionality, are only gaining acceptance relatively slowly.
Exabyte’s Campbell says he is looking at both XBRL and NewsML, but is not certain there’s a need for them right now. ‘Partly it is a cost issue, but second it’s a question of what it could do for us that existing service providers cannot do for us,’ he says. ‘There are some pretty powerful features in there, but it will take a while before they become more widespread.’
Write once, read many
The consortium developing XBRL is close to having working definitions in many markets worldwide. Some companies in Australia and the US are already creating their financial reports using the language. The benefit is that the reports can be created once then reproduced in a variety of formats, including on the web. Moreover, analysts and investors will be able to access and analyze financial statements in their own models.
But Keen says that although CCBN has developed prototypes using XBRL for financial reporting, it hasn’t yet heard any requests for it: ‘Right now a lot of the clients just want to get the data in; they want to start small,’ he says. ‘But if you look at what we were offering a year ago in terms of XML, we’ve come a long way. So it’s very possible that at this time next year we will be using XBRL for all our financial reporting.’
XBRL is being heavily pushed by accounting industry bodies in various countries. Unlike other members of the XML family, XBRL will have to be adapted for each market because of the differences in accounting and disclosure regulations from one country to the next. With the backing of the accounting industry and sometimes governments, accounting software vendors are beginning to promote new XBRL-enabled software.
All of this should help to build awareness among listed companies, especially if they are keen to make their accounts more user-friendly for investors and analysts or just to be seen as technologically up-to-date. Finally, those companies that have such relationships will begin to ask their IR web site and distribution service providers to support the language.
According to irasia.com’s Kho, this stage is just being reached. ‘There are actually very few companies publishing reports in XBRL right now, but we are beginning to see more interest,’ he says.
Likewise, investor relations service providers have yet to fully embrace NewsML for press releases, but with thousands of IR customers between them it will be a boost to the standard when they do. They are also quick to point out, though, that the third party data feeds they receive directly from some news vendors aren’t in NewsML format yet either.
Gruner says he is a big fan of both NewsML and XBRL and that Shareholder.com is getting more and more involved in both. ‘It’s safe to say you’ll see NewsML and aspects of XBRL integrated into irXML in a period of months as opposed to a year or so,’ he adds.
Whether companies choose to source data feeds direct from providers and develop and host their own IR web sites, or outsource the IR pages in whole or in part, it is just a matter of time before XML becomes the lingua franca for investor relations.
Tracking peer companies
Investis, a London-based provider of online IR solutions, has launched Peer Group Monitor (PGM), a web-based tool to give an IRO a range of analytical information about a company’s peer group in one place.
Justin Walter from Investis explains PGM’s origin: ‘One of our clients asked us to do it for him and now we have developed it as a product available for all our customers.’
With PGM, you can select your own peer group of international companies and view their performance via comparative charts, tracking movements in consensus estimates and sector valuations. The product also gives your IR team breaking news on your peer group as it’s released, and downloadable Excel data that can be integrated into internal reports and analysis.
Virtual communication
Genesys Conferencing has introduced Genesys Meeting Centre (GMC), a new platform that uses both the telephone and internet to create a virtual conference room.
GMC lets you conduct all kinds of meetings with the same impact as in-person get-togethers, according to Genesys. Users need no formal training because ‘it’s remarkably easy to use,’ says Suzanne Murray, senior telecoms engineer at global internet network Terra Lycos.
