1 : What can you derive from reporting in the cloud? Otherwise unaffordable or unattainable computing capacity. Elimination of costs and tasks associated with locally deployed software. And dramatic economies of scale.
2 They say necessity is the mother of invention. It certainly was for Benjamin Franklin, whose various contraptions and contrivances arose as much in response to a particular need as to some quirky intellectual curiosity he might have had. Deeming hearth fires dangerous, Ben invented the iron furnace stove. Finding lightning equally dangerous, he invented the lightning rod. He invented the first odometer to measure postal routes accurately and to preclude his having to get down from his carriage every dozenor-so yards to lay out his tape measure. And when he found he couldn t reach books on the highest of his library s shelves, he invented the Grabber now available from Ronco for just $9.95, plus shipping and handling. But sometimes, invention can be the mother of necessity. That, too, was the case with old Ben, who invented bifocals but only because Giordano da Pisa had already invented glasses and having to change back and forth between his distance and reading specs was driving Ben crazy. Such also is the case with computers. Once they d been invented, necessity followed. And because every good solution deserves a proliferation of problems, we ve been adapting, modifying, expanding, improving, enhancing, customizing, optimizing, supplementing, and complementing hardware and software ever since. 2 Well, the higher the bar, the more innovative the response, with one solution topping another. When we finally looked around, we weren t in Kansas anymore, Toto. We were computing in a cloud.
3 That cloud. It s in Minnesota, right? No. That s St. Cloud. We re talking about the cloud. Though it does exist, it s not really a place. It s more like the squiggly line techies draw to encircle a complex matrix of infrastructure, platforms, and applications that work invisibly to facilitate an equally complex level of computing which tends to make people almost as queasy as trying to imagine if and where the universe might end. But, like the universe, the cloud is real and formidable. And, like the universe, its potential is endless. Good thing, too, because the alternatives were getting expensive. The hard truth about software. Successful businesses learn one thing very quickly: Software may be able to manage and yield data at ever-increasing speed in ever-increasing volume with ever-increasing precision, but hardware drives the bus. And installing and maintaining both at leading-edge caliber is tricky and costly. Cue Software as a Service or SaaS. 3 SaaS is much like the faucet or plug that connects us to the water or electricity we need to sustain us, without requiring from us any actual investment in the building and maintaining of the sources of that water or electricity. The only difference is that SaaS connects businesses to the cloud, from which otherwise unaffordable even unattainable computing capacity flows forth, eliminating many of the costs and tasks associated with implementing software and affording economies of scale not otherwise possible. So, what s in that cloud for me? you ask. Everything you could need or want but what you get and how you get it is up to you. Even the choices are easy:
4 You can use us as a Managed Service Provider (or MSP). Then, all you ll need is a subscription for the application you want to run, and we ll install it at the location of your choice. We ll manage it and perform all maintenance, upgrades, optimization, and troubleshooting expertly and remotely. And we ll provide valuable assistance when integration to and from other systems is required. You can choose On-site Installation with Managed BCP Services. That gives you all the functional opportunities of locally installed software, plus the business-continuity and disasterrecovery services most local installations lack. You ll get fail-safes for current data versioning, as well as accessibility to the functionality you need to complete the work required in a tight compliance reporting timeline. You ll also be able to use automated scheduling services to send copies of your data to us, using a virtual data room (VDR) as the switch. We, then, create a public SaaS configuration for your company, accessible to your users, loaded with the data from your most recent on-premise transmission, to facilitate timely compliance in the event 4 of a disaster. By using the public/shared software option, you ensure access to your system in the event of disaster or other interruption. As Ted Nugent would say, ya gotta love that. You can opt for Public/Shared SaaS and enjoy all the benefits of a customized software application, plus all the benefits of quintessential cloud computing, wherein multiple users sharing the same hardware and software also share aggregate development, management, and deployment costs for significant economies of scale. More discerning still? You can select Private/Dedicated SaaS an architecture in which the very same services available in the public/shared arena are provided, but installation of the software and the servers that it runs on are fully dedicated to a single company or affiliate companies under one umbrella agreement. Add managed security and administrative services a la carte, and you ve got yourself a SaaS system as fully dedicated as it is customized.
5 And speaking of customization, you ll be glad to know that whatever option you choose, SaaS delivery is easily tailored to include precisely the capabilities your company needs to meet your specific statutory and tax reporting requirements, your specific IT requirements, and your specific budget requirements. That gives you one more very specific advantage: control. No, really. You are in control. Reporting in the cloud allows you to create reusable interfaces from any data source quickly and easily, thanks to five primary interfacing models. Four are available through Microsoft Excel. The fifth is our custom mapping utility. Collectively, they offer many significant features, including: Reusable Excel workbook templates which pre-configured for cell referencing to your own personal worksheet data enable you to upload worksheet data directly into the correct location on any statement page or tax return simply by placing range names on selected data 5 XBRL (or extensible business reporting language) tagging that facilitates the of use XML tags in a spreadsheet to link your trial balance for upload to the annual statement and make your information available to other systems that consume XBRL formatted data The standard integration maps required to access and use data files created to interface with your previous vendor The ability to access data for completing customized cross-check calculation, source-system reconciliation, or transferring the year-to-date numbers requisite to annual and quarterly filings
6 The automated task-scheduling capabilities that expedite pre-scheduled data importing and exporting, file monitoring and adjustment, and configuring and applying the dedicated security attributes required to export data to a secure FTP server as part of business-continuity, or simply as an alternative to standard backup procedures all while you sleep. Literally. That s an awful lot of flexibility and functionality which equates to an awful lot of time and money saved. It s also just the beginning, Become one with the cloud. When data, even ostensibly identical data complete with its redundancies, overlaps, and inconsistencies is stored in many different databases, the result is chaos. Information chaos. A tangle of system-to-system data-exchange links capable of devouring 40 percent of a company s IT budget in integration costs and creating expensive delays in developing and launching critical applications. 6 When you operate in the cloud with its shared, real-time environment you store one set of numbers in one common database, from which consistent information is accessible to all users in real time without the confusion, errors, and duplications multiple databases generate. It s sensible, accurate, inexpensive, and efficient. It s also a lot more fun. Data entry becomes effortless. Annual and quarterly statements take shape quickly and easily. And the preparation status of statements, filing forms and tax returns are visible anytime, anywhere all of which is so sane and well, modern.
7 Breaking news: The world isn t flat. And up in the cloud, databases aren t, either. They are relational and dynamic capable of seeking out and finding connections that make the data within even more valuable. Take tables, for example: In a flat-file database, tables are solitary, detached, and largely unaware that other tables even exist, which is just sad because there s nothing more dysfunctional than a lonely table. But in a relational database, the tables are aware of each other and highly congenial. They communicate readily, sharing each other s company at the occasional neighborhood bridge tournament or ice-cream social. And because they actually like each other, they make it possible for users to locate related material across multiple sources automatically and at lightening fast speeds which makes them very popular because of their ability to get most of their work done during commercials. Because relational databases use a structured query language (or SQL) that delivers prompts 7 in plain English, users get the benefit of SQL-based development. And they never feel as if they re eavesdropping on conversations between computers on Pluto even though that s precisely what users are doing. Nice, huh. (Of course the cloud s on Pluto. You didn t think the cloud was down here, did you? Did you see it down here?) Relational databases have other advantages, as well. They can be expanded to meet growing needs. They offer enhanced privacy, since they can easily be capped with an interface comprising however many levels of security are needed. That s good news for companies handling sensitive information, such as credit card numbers, little black books, and hat sizes.
8 And cloud databases are well rounded, too. Maybe even a little portly. In fact, in the cloud, there s an integrated module for every reporting need and a few you might never have imagined. It may sound counter-intuitive since it s so far away, but from Pluto, you ll be able to prepare annual and quarterly statutory financial statements and tax returns with faster and fewer resources by connecting all users and reporting locations in one real-time, collaborative reporting environment. By logging all user and statement activity that shows who did what, as well as where and when, to help identify errors and reconcile data. And by saving pages as Excel workbooks and building cell references that map to your data so it can be read back into the reporting system. You ll see dependent and precedent formula references update automatically when statement pages, filing forms, and tax returns open. (Try THAT on your abacus.) You ll be able to embed statements with perfectly formatted notes to financials, organizational charts, and secured PDF files, eliminating edit and review time. And you ll be able to run multiple tasks including 8 validations and gum-chewing concurrently, in real time, continually error-checking numbers so problems can be addressed early in the preparation cycle. Additionally, you ll be able to display NAIC and custom validations and their respective statement pages onscreen to enhance accuracy and reduce reconciliation time. You ll be able to execute the filing process (except in states that have abolished the death penalty) in a single, fully automated step including pre-file audit reports. And you ll be able to produce cost-efficient print ready electronic files and ensure fast, simple delivery of completed statements. Yes. Pluto s a long way up there. But wouldn t it be worth getting over your fear of heights for that much oomph?
9 Pluto s perfect form. And here s something we almost forgot to mention: From the cloud, you ll be able to complete state financial filing forms with ease by having immediate access to more than 2,500 state forms and compliance reports, including premium tax forms, all provided by the respective DOIs. (Clever, those Plutonians.) Forms include all lines of business including surplus lines with values populating from data entry, formulas, and linked cells, enabling you to trace origins within the statements. (In a truly cosmic coincidence, a financial compliance manager in Bedsore, Mississippi, traced his origins all the way back to Pluto, which explained his green skin and the eyes under his ear lobes. Unfortunately, it didn t make it any easier for him to get dates.) Forms can be locked so that external linked values do not update, automatically preventing unexpected changes. And all finished forms are stored in a completely locked state to disable changes. 9 Think that s it? Not so fast. In the cloud, you ll be able to file premium and municipal tax forms effortlessly as relational databases allow pertinent premium tax-return data to flow to and from the annual statement state pages and others, updating and populating them automatically. (On Pluto, they don t even think that s magic.) You ll be able to save returns in Excel workbooks, within which they can be edited and imported back into the database. You ll be able to display returns, along with the work papers that populate them, in PDFs that can be adjusted with new data. You ll be able to override data elements. And you ll be able to add cell comments to any field.
10 You ll be able to populate forms provided right on state DOI websites with data, formulas, and linked cells then reconcile them in real time against annual statement data, locking the data on the form once it s completed. And last (but never least), you ll be able to calculate the amortization of GFA payments (with yearly credit amounts flowing to their respective returns), management reports, GFA summary reports, estimated payment computations, and check requests to help monitor and streamline preparation processes. Some people have suggested similar functionality might also be available from Mars. It isn t. We checked. What s in your portfolio? It s a little-known fact that Pluto was first colonized by a roving gang of space-storming accountants. The truth of that is borne out by the fact that the cloud also enables you to make short work of portfolio accounting and reporting by using the same intuitive database to do all 10 kinds of astounding things, such as: Guarantee transactions and reports are created accurately Modify transactions and rerun reports for any time period using Schedule D reports that are as easy to create as they are to reconcile Create Schedule D reports on Statutory or GAAP bases by switching company type Develop standard reports such as Investment Reconciliation Reports, Projected Cash Reports, and the Average Life Reports to complement Schedule D reporting Use automated tools to enter transactions efficiently including customizable imports from your bank-transaction file
11 Update posted transactions, which internal controls prevent from going out of balance between reporting periods Provide detailed audit reporting that checks for data inconsistencies and errors Enjoy comprehensive Excel compatibility for ease of use and modification. Lost and Found. Finally, you ll be able to file those Unclaimed Property Reports as easily as you file any other regulatory report via a single, simple, standardized online experience that fully leverages digital technology to enable submission and validation of records, reports, and payments in all participating states. Using only your browser, you ll securely access, upload, manage and report unclaimed property over the Internet. Easily convert data from your old unclaimed property or source systems to enable the import of unclaimed property records. Develop custom-designed integration maps that take advantage of standard outputs from source systems. Enjoy strong validation routines that check for errors to assure uniform, and correct, data formats. Output unclaimed property data in Excel format for mass updating and custom reporting. Forecast future liabilities. Calculate dormancy based on the state and the property type. Use customreporting fields to track related information for embedding in search letters. Produce search and due-diligence letters with Word for limitless letter customization. View audit trails that show who changed what and when for documenting all of your compliance activities. Create reports to state-specific specifications using simple step-by-step prompts. 11
12 Concerned about back-end export integration? Who isn t? After all, exporting data in the same file formats allowed during the import process is vital for users who want create a template for reconciliation or custom reporting purposes that can be repurposed for use by other applications or services. Just think about what you go through to ensure that the data contained in your financial statements agrees precisely with the data in your general ledger? (Yeah. Aspirin anyone?) Well, here in the cloud, you simply load your original general ledger data into Excel, then export the data from the annual statement into the same worksheet to compare it for balancing purposes. And the same thing holds true for Schedule P, when you re trying to validate your premiums and losses back to your source data and for your auditors, when they want tie annual statement data back to the general ledger. Now think about how complex integration for management reporting usually is. (Can I offer 12 you a Tums?) What company doesn t dream of eliminating manual input, minimizing the reconciliation of data, reducing preparation time for financial projections and other data models, controlling the data source, and allowing users to develop and manage their own productivity tools? What company doesn t dream about using statement data throughout the annual and quarterly preparation process to develop analysis models available both during and immediately after the close? And what company doesn t dream about empowering staff while ensuring that everyone uses the same source of data? The answer is companies that have access to: Rating agency models that provide financial data to the CFO for estimates in preparation of S&P and A.M. Best discussions.
13 Board reports that provide key financial statistics, with easy drill-down to specific driving variances in operating performance. Projection models that provide detailed across-the-board comparisons of current and prior-period balance-sheet and income-statement lines, so performance statistics for comprehensive analytical review of the statutory financial statements can be calculated, so potential errors or transactions requiring additional disclosure prior to filing the annual and quarterly statements can be highlighted, and so various strategic initiatives can be accurately modeled. Finally, think about integrating data for state examiners. (Yup. Time for the hard stuff.) Well, in the cloud, even that s easy, because examiners have access to standard examination reports to reduce the duration and expense of their review. In fact, they can load annual statement information from the NAIC data file to produce Excel reports on-demand, including: 13 Fluctuation reports that analyze balance sheet and income changes for the entire period of the examination Maps that that track all trial balance accounts in a general ledger to each applicable line item on pages two through four of an annual statement Risk-based capital reports to complete analysis Key functional activity reports that supply asset, liability, and income statement data directly from the annual statement Planning memorandum reports that tie each key functional activity to the associated fluctuation analysis result
14 Reports that assist the examiners with substantive testing for premiums, investments, reinsurance, claims/reserves, other assets and liabilities, related parties, and surplus key activities. Easy Does It is still the best advice even on Pluto. Space travel isn t for everyone. That s why most cloud-computing providers do most of the shuttle work themselves, hustling the data back and forth, dodging asteroids and meteors, and trying to reduce their customers interplanetary commutes. But it s not just being able to spend most of their time in Earth s atmosphere that makes cloud computing so advantageous to users. Cloud computing precludes the need for investing in costly infrastructure, constantly in need of a new little gizmo here or a major what s-it there. Not only is there no hardware there s no software, either eliminating technical maintenance, patches, upgrades, troubleshooting, and midnight calls from a guy named Earl. And cloud computing ensures disaster recovery and business continuity no matter what because whatever happens down here has hardly any effect on Pluto. ( Hey! Did somebody down there just burp? ) 14 When it comes to reporting from the cloud, the benefits really start to pile up. (The dishes, however, do not because cloud-based automation gives you so much more time to do them.) The upshot of all the benefits detailed in the preceding pages can be summarized in the ones you ll notice first: Improved accuracy Enhanced efficiency
15 Increased productivity Reduced expenses Greater control Immediate ROI And significantly fewer financial reporting employees leaving early to visit their therapists. Bottom Line? (Which is what really matters, right?) Reporting from the cloud may seem to be the province of Captain Kirk, Buck Rogers, and Obi Wan Kenobi at least on paper. But thanks to advanced computer technology, it s now available to you. And thanks to intra-galactic teleportation, it s surprisingly inexpensive. 15 In a very real sense, it takes efficiency and proficiency to a whole new level. Cloud level which may not have an earthly address, but does effectively address the business world s need for capacity, processing power, and affordability. From Pluto, the sky s the limit. Which is exactly the way it should be. * The distance to Pluto varies because of its eccentric and inclined orbit. And since Pluto orbits the sun, as does the Earth, so the distance between them can vary from 2.61 billion miles to 4.66 billion miles. This information is provided as a public service to our readers and other folks with equivalent amounts of time on their hands ETM: 5825 COUNCIL STREET NE, CEDAR RAPIDS, IA / PHONE: / FAX: / WEB: BYETM.COM