The Center for Data Innovation spoke with Matt Rizai, chairman and CEO of Workiva, a data analytics company based in Ames, Iowa. Rizai discussed how modern data technologies and standards can improve how the private sector and government regulators operate in the financial marketplace, and how data analytics can reduce a company’s carbon footprint.
This interview has been lightly edited.
Joshua New: Companies use your software to manage risk, boost productivity, and ensure compliance. When you started Workiva in 2008, companies relied more heavily on paper than on electronic records. How has this influx of easy-to-use data affected Workiva customers?
Matt Rizai: The explosion of data within enterprises has rendered existing processes and legacy technologies inefficient at helping users find, understand, and report the most critical and relevant information on a timely basis. To create business reports, many organizations rely on manual processes, large teams, and a variety of independent point solutions. The stakes for enterprises are high; reporting incorrect, incomplete, or untimely information exposes organizations to potential liability, reputational risk, and a weakened competitive position.
To address these challenges, Workiva created Wdesk, a cloud-based productivity platform for enterprises to collect, link, report, and analyze business data with control and accountability. Thousands of organizations, including over 65 percent of the Fortune 500, use Wdesk for risk, compliance, or management reporting. Wdesk proprietary word processing, spreadsheet, and presentation applications are integrated and built upon a data management engine that collects, aggregates and manages our customers’ unstructured and structured data. With all this data, we can help companies synchronize this information, control collaboration, set granular permissions, and create a full audit trail. Our software helps mitigate enterprise risk, improve productivity and give users ability to make decisions with real-time data.
New: In 2009, the Securities and Exchange Commission (SEC) announced that it would adopt an interactive data format standard for financial reporting, and in 2010 Workiva was the first company to automate the reporting process. What was the impact of these two changes?
Rizai: Mike Starr, who currently serves as Workiva’s Vice President for Governmental and Regulatory Affairs, served as Deputy Chief Accountant at the SEC during that time, where he was responsible for the SEC’s extensible business reporting language (XBRL) initiative. Mike saw firsthand how Wdesk changed the way public companies filed annual and quarterly reports with the SEC. The SEC’s adoption of XBRL, an interactive data format, was the primary impetus behind the marketplace accepting a new way to report to the SEC. Workiva was in the right place at the right time with the right technology. With Wdesk, our customers take less time to publish and file their reports and it costs them less than the manual reporting process they previously used. Moreover, our competitors were forced to change their service offerings.
New: And how do you think the government is handling this modernization effort? Is there room for improvement?
Rizai: There is always room for improvement. However, there have also been significant steps toward advancement in the last few years.
Two major federal agencies—the Federal Deposit Insurance Corporation (FDIC) and the SEC—require that companies file financial data using XBRL. The FDIC has reported that the use of XBRL has resulted in cleaner data, improved data accuracy, faster data inflow, increased productivity, and faster data access.
During the last year, both the SEC and the marketplace have responded to concerns about the usability of XBRL data. The SEC’s strategic plan for 2014 through 2018 states the following: “The SEC is working on enhancements to data standards and XBRL filing requirements that improve the quality of structured data and reduce burdens on filers.” At Workiva, we are leading a market-driven initiative to develop guidance and validation rules that address investors’ concerns about the accuracy and reliability of XBRL data. The SEC has also made an effort to make the data more easily accessible by investors, and, by next year, I expect the SEC will further improve the quality and usability of XBRL data.
In addition, Congress enacted the the Digital Accountability and Transparency Act (DATA Act) last May, which requires the federal government to switch from a process of collecting spending information in disconnected documents and reports to an electronic process using a standardized, open data format. The Office of Management and Budget and the U.S. Treasury Department recently announced they will use XBRL for this and will establish consistent data standards for federal agencies, grantees, and contractors. Ultimately, this should increase accountability for how federal funds are received, categorized, and spent.
New: Workiva also helps customers manage utility data and unstructured data sources to help them be more sustainable. Can you talk about how this process works?
Rizai: As sustainability becomes an integral component of organizations’ business strategies, the demand for automated, high-quality energy data increases across many departments, including accounting, finance, procurement, operations, and sustainability. However, accessing and managing data from disparate locations and conflicting formats is a difficult, labor-intensive process for most companies. With Wdesk, users can integrate and control all of their data, regardless of format or location. Linking this data as it is produced helps companies monitor performance, reduce utility costs, and minimize carbon footprint. Wdesk gives executives the power to make energy-use decisions based on real-time data and helps the sustainability office bring more value to the CFO.
New: Workiva has offices in the United States, Canada, and the Netherlands. Do businesses in different countries approach data management in different ways, from a legal compliance perspective or otherwise?
Rizai: While each country has its own regulatory scheme, businesses in every country need to be able to efficiently and effectively manage, report, analyze and understand their ever-expanding volume of data. The need to leverage this data to make real-time decisions to improve performance and reduce risk is not limited to the United States. For example, companies in the United States use Wdesk to increase efficiency in documenting, implementing, and assessing internal controls over financial reporting as required under the Sarbanes-Oxley Act (SOX). Similar controls have become become a best practice among many companies outside the United States.
Furthermore, many companies in Canada, Western Europe and elsewhere list their securities on U.S. exchanges and therefore must file reports with the SEC.