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IBCS – Importance of Standardization in Business

In this article we'll make a case for the importance of having standards in our lives, explain the basics of IBCS, show a lot of examples of IBCS compliant reports, and finally show you what it takes to implement IBCS in your organization.

1. Why standards are practical

Standardization is the process of developing and implementing technical standards. It can help to maximize compatibility, interoperability, safety, repeatability, or quality. (source)

Stop sign

Wherever you're from, you know what to do when you see this

Having standards in our daily life is beneficial for many reasons. They simplify our decisions, enable us to work more efficiently, often even make our lives better - just to name a few.

We have standards in the tools we use, the processes we follow, the way we give and receive information, etc.

Here are four well-known examples of standardization:

  1. Writing. In the majority of the world the Latin alphabet is used to write text. There are also other "standards", like the Cyrillic, Arabic and Chinese alphabets.
  2. Electricity. Mains electricity is standardized worldwide in the form of alternating current (as opposed to direct current). However, different voltages and frequencies of electric power supply exist, which prompts the use of different (standardized) plugs and sockets to provide protection from accidental use of appliances with incompatible voltage and frequency requirements.
  3. Traffic. The traffic signs are standardized worldwide. With billions of vehicles on the road every day, having standards is essential to keep them moving as smoothly as possible.
  4. Music. The musical notation has been standardized for more than a thousand years, allowing musicians from all over the world to play music from the same sheets - even if they are centuries old.

However, there hadn't been any initiative to standardize the presentation of financial and business data. Until recently.

Traffic Maps Music Business

Traffic signs, maps and music sheets are standardized. What about business communication?

Standardization of business communication

Business communication is the materialization (e.g. creation of printed reports, digital presentations, ...) of quantitative information for analytical and reporting objectives. (source)

The International Business Communication Standards (IBCS) are practical proposals for the design of business communication.

Rolf Hichert

Rolf Hichert

In 2004 Dr. Rolf Hichert took on a challenge to standardize the way analysts and controllers present data in their reports, dashboards and presentations.

Without standards in place, the CEO might get blue line charts for sales from one financial analyst, and a red pie chart from another. Someone else decides that columns or bars are a better fit for the data.

In this case, the design of the reports and, even worse, the design of the individual objects (charts and tables) on the reports is decided by each author individually. This leads to confusion for the management team that receives these reports, poor decision-making and often even complete disregard for the reports they were given.

The suggestion of the IBCS association is to use the same expressions and the same visualizations for the same content. If the content is not the same, it should not look the same.

The IBCS standards are based on Hichert's SUCCESS rules and are comprised of three pillars:

  1. Conceptual rules - how to organize your content so that it gets your message across.
  2. Perceptual rules - which visualizations to use in any given case.
  3. Semantic rules - introduce the IBCS notation. This is the actual standardization of business communication. It covers the unification of all important and frequently used aspects of business communication: terminology, descriptions, dimensions, analyses, and indicators.

They are the result of intensive work by Hichert and the IBCS association, with large portions of it based on works of several authorities in the visualization field: William Playfair, Willard Cope Brinton, Gene Zelazny, Edward Tufte, Stephen Few, and Barbara Minto.

Thus, the standards are built on top of scientific, experimental, and practical experience foundation.

2. IBCS Examples

See more examples of IBCS reports in our gallery.

3. IBCS Implementation

All business communication problems can be fixed. If the following 3 preconditions are satisfied, the success is guaranteed.

  1. Concept. You have to have a clear concept with a set of rules on how you plan to make the internal business communication more effective, understandable and standardized. The IBCS Standards offer a straight-forward way of doing this.
  2. Software. Without software you cannot fix any business communication problems. This was rather difficult 5 years ago. There was Excel, but no other tool existed. Today, the situation is very different. See below for the role of software in the implementation of IBCS.
  3. The right management. The management must be on board with the change. Currently this point is proving to be the toughest of the three. People are hesitant to change their concept. They're proud of what they've done and don't want to suddenly start following some external rules. If, however, the top management (CEO, CFO) is on board, the changes can be passed on to the lower levels. There are certain organizations that have rolled out these concepts on a worldwide scale. But it's not a weekend job, it took them 3-4 years to do it.

The role of software in the implementation of IBCS

Software plays a crucial role in fixing the business communication problems.

You cannot write a booklet, send it to all of the people in your organization and say "Follow those rules". People don't want to learn every IBCS concept by heart.IBCS certified software seal - Zebra BI

And with the new software tools available on the market (like Zebra BI), they don't have to. Now everyone can create best practice reports in just a few clicks.

The users don't have to care about the IBCS rules. They just prepare the data (for different business scenarios: previous year, actual, budget, forecast) and the software ensures the charts created from the data are IBCS compliant.

The software knows what is previous year, sales or head-count. There is a meta layer in the software where certain rules are defined that incorporate IBCS into the software.

In order for a software tool to be officially accepted as being able to create IBCS compliant reports, the IBCS association offers a certification process. The software must pass strict testing procedures to ensure the charts created and reports produced are in line with the IBCS specifications.

 

On June 8th, Zebra BI passed the IBCS certification process, becoming the first "IBCS certified charts + tables" software.

 

Standardization of business communication leads to improved decision-making which ultimately leads to better financial results of your company.

When will YOU start?

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