The Need For Standards In Business Reporting
Standardised communication is a common feature of our everyday lives. We see it in road signs, maps, music, architecture and many other fields. They all use consistent rules to convey something, such as "do not enter here" or "play these notes". It does not matter who the composer was or which manufacturer produced the road signs, consistency is maintained. Without such rules, the readers of these messages could easily misinterpret them, leading to confusion or in some cases danger.
If the importance of consistency of expression is understood in these scenarios, so why not in business? Many organisations will have a design specification, outlining which colours and fonts are to be used, but this is not often extended to data visualisations. Instead, it is left up to the report designer's personal preference as to which chart type is best, how to lay out a dashboard or what title to give a report.
What Should These Standards Look Like?
A common visual language for business communication makes data simpler to understand, resulting in better informed business decisions. So how can this be achieved? There are various visual properties at our disposal. Some, such as size and position, are already used in the way we represent numerical values in visuals. Others, such as colour and pattern, are used at the discernment of the organisation or individual creating the report. We are tasked, then, with assigning meaning to these properties so that they can be used consistently.
An effective communication standard would also need to give guidance on structure and presentation of reports. What should go on the page and where?
Finally, these standards need to be easily comprehensible and universal themselves, in order to achieve widespread adoption.
The International Business Communication Standards (IBCS) are practical proposals for the design of business communication. They were developed by Dr. Rolf Hichert and Dr. Jürgen Faisst based on many years of research and experience in the field of business reporting. In 2013, the IBCS Association published the Standards under the Creative Commons license, enabling widespread access and international acceptance.
The IBCS standards are based on Hichert's SUCCESS formula, which can be broken down into three categories:
- Conceptual rules - using an appropriate storyline and structure.
- Perceptual rules - using appropriate visual design.
- Semantic rules - using a uniform notation.
These rules give guidance as to how to design and present reports, dashboards and presentations for the most effective business communication. When adopted throughout an organisation, managers will no longer need to decipher an analysts preference to chart type or their design flair. Rather, reports will be visually consistent, regardless of who authored them. Understanding a report becomes almost instant, resulting in a better informed interpretation of the data and easier decision making.
IBCS Reporting With XLCubed
Implementing the IBCS approach in your reporting first requires software that allows you to do so. Some aspects of the rules can be applied using most software, but only a relatively small set of products cover the full set of requirements, and ease the process of creating reports which follow the standards.
XLCubed enables advanced report creation in the well-known and easy-to-use environment of Excel. The addin allows you to work with all the Excel formatting functionality that you already know, with the additional of powerful, data-connected grids, slicers and dynamic charts.
XLCubed 10 passed the IBCS certification shortly after it's launch in June 2020. This version significantly extended the charting capabilities within XLCubed, introducing new chart types specifically targetted to be compliant with the IBCS rules. The update was driven by input and feedback from many customers and partners already aware of IBCS, and has since had overwhelmingly positve feedback.
XLCubed Create Message is a tool for creating final-version annotated reports for formal communication, following IBCS standards for report layout. It allows for tables and charts to be easily transformed into a standardised view where a core message, title and annotations can be added quickly, easily and with consistency. This view can then be exported to XLCubed Web or PowerPoint.
XLCubed offers a range of chart types especially useful for presenting business scenarios. In addition to the standard line, column and scatter charts, we provide waterfalls, variance charts and overlapping bars/columns. All charts can be displayed as a single chart or in a small multiple layout displaying individual charts for each category being analysed. These can be used to create IBCS-compliant reports and interactive dashboards: for example, vertical waterfall charts are effective in displaying structural contributions to a total, or a variance chart would be used to show the change between two scenarios, with red representing a bad change and green a good one.
All chart types can be inserted into a standard Excel worksheet and connect directly to your data with a simple drag-and-drop design interface.View our financial chart gallery and use cases
The 'Unify' rule of the SUCCESS formula states that semantic notation should be applied all components of a report. Content that means the same should look the same.
These rules are for all important and recurring aspects of business communication. In particular, scenarios should be formatted in a consistent manner. When analysing a chart or table, it should be immediately obvious if you are looking at measured, expected or fictitious data. IBCS provides suggestions for how actuals, previous year, plan and forecast scenarios should be displayed by styling each with a different area fill.
Scenarios with real, measured data should be filled by a solid dark gray fill. Data from previous years should also have a solid fill but in a lighter shade.
Plan scenarios with fictitious data are distinguished by outlined areas. The data is not yet actual and so it does not have a fill to signify this.
Many re-forecasts may be created after the formal plan. Forecasts can include some actual data, but are still not reality. They are given a hatched fill pattern to signify their logical fit between plan and actual.
XLCubed provides 'Business Rules' as a way to map elements of your data to different scenarios. When these are then plotted in charts, they will be automatically displayed with the correct solid, outlined or hatched formatting.
These Business Rules can also specify accounts that are expenses, ensuring that they are plotted in a negative direction, and which variances have a good impact on the business (green) and which are bad (red).
Once created, Business Rules can be reused in other workbooks and shared among report creators, meaning charts are immediately displayed correctly irrespective of the author, and with no extra formatting effort.
All examples below follow the IBCS templates and were created in Excel with XLCubed charts.
Stacked Column Charts
Display development of data contributing to a total over time
Stacked Bar Charts
Display structure of data contributing to a total at a given point in time.
Multi-Tier Bar Charts
Compare data structure of different scenarios along with the absolute and relative variance.
Vertical Waterfall Charts
Visualise the summation of a data structure and compare the difference across scenarios.
Multiple charts representing the breakdown of a data structure and sharing a common scale, allowing them to be easily compared.
Present trend between positive and negative values across many time periods