XBRL – Changing Paradigms,
Presenting Opportunities
David Hill, CFA – FactSet Research Systems Inc.
January 18th, 2006
What does FactSet Do
FactSet provides workflow solutions to
buy side analysts.
– Integrate financial information into one library
– Allow for deep company analysis
– Serve lots of quantitative applications
The more data, the better
The more comprehensive data, even BETTER
Why Am I/FactSet here
– Historically, new technology developments
have greatly improved the analyst’s day
– Great interest in current challenges and
potential solutions
– Time constraints and complexity are never
ending problems
– How can we help deliver a blossoming new
efficiency tool to our customers
Role of Product Development
– Customer has a problem
– Customer communicates this problem to
solution provider
– Solution developed by business to solve a
clearly defined problem
Consumer Goods (?)
Inverse of Product Development
– Solutions provider notices a paradigm shift
• Technology, information, trend, etc.
– Explore means to productize this
– Make customer aware of unknown problem or
inefficiency
– Confirm the solution causes improvement
– Capitalize on the new opportunity
Creation of the PC Spreadsheet
Historical Timeline
History: Chapter 1
History: Chapter 2
History: Chapter 3
Today: Chapter 4
Analyst Demands of Today
– Increasing value placed on original buy side
research.
Integrity Research Associates projects that buy-side firms will
increase their investment in internal research from $2.44 billion in
2004 to $4.86 billion in 2009. Such an increase will represent a gain
of approximately 15 percentage points in market share, from 26.2% in
2004 to 41% in 2009.
Analyst Demands Today
– Increasing value placed on original buy side
research
– Growing coverage list. Find more alpha
– Must become familiar with various industry
accounting practices
– More complex accounting issues
• FASB 123, IFRS, Accounting of Goodwill
Future: Chapter 5
Future
– More structured format to financial
information
– Greater transparency
– Greater insight into new accounting
regulations
• What is the data format
• Industry comparisons
All improvements for the buy side analyst
Future
– XBRL presents a potential Paradigm change
– But, some questions remain
• Requirement
• Adoption
• Delivery
– How to turn structured data into buy side
products
Future – Lunchtime thoughts
– Integrate with Buy side organizations
– Get the $4.00 latte
– Leverage those that touch the buy side user
• Factset, Thomson, Morgan Stanley, Research firms
– Create real life examples
• Volunteer filing data, EDGAR Online data, Morgan
Stanley research
– Appeal to their sense of economics
Future – Lunchtime thoughts
– Need to create demand side pull within large,
well funded, and well connected buy side
firms.
Questions (?)
Immediate questions or comments ?
Time allows for questions as a panel as well