Where I live, in the UK’s West Country, a silo is somewhere you keep manure. Something smelly that you want to keep isolated from the rest of the farm. It’s not much different in IT data-management. A silo is an isolated datastore and much of the effort of corporate IT departments is focused on getting silos to talk to each other. So it’s useful to remember that XBRL is also an important mechanism for driving the data interchange used for integrating silos.

I was reminded of this by the impending release of GRC-XML. Comprehensive Governance, Risk and Compliance (GRC) often depends on knitting together a bunch of ‘silo’ tools and applications to cover a diverse range of  needs, especially in multinational corporations subject to all kinds of constantly evolving regulatory controls. But like many software use-domains, including ERP and CRM, GRC has no standard mechanism for data-interchange.

Arguably data interchange standards have hardly moved on much since ASCII – today’s most widely used data interchange formats are essentially text files. The problem with text files is that anything goes. There’s no inherent logic to them. That’s why XML/XBRL is in fact ideal for use as a data-interchange standard because the data is ‘defined by’ an agreed taxonomy, a key element missing from text-based data interchange.

While the key driver for XBRL has been as a means for standardizing financial reporting, it may be that the real action in the future is in the development of a series of taxonomy-driven data interchange standards across a wide variety of use-domains, bringing all the silos together in a Hollywood-style happy ending.

This entry was posted on Friday, April 16th, 2010 at 2:14 am and is filed under Communication, XBRL. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.