Last month, Morningstar announced that it will be sun setting its web-based research service, Morningstar Document Research (MDR), effective August 31st, 2016. MDR, which is more commonly referred to as 10K Wizard, has long been revered by the SEC document research market for being a cost-effective solution that helps users navigate corporate disclosure filings and fulfill SEC filing research requirements. Morningstar’s departure from this space has left its current and prospective clients feverishly scouring the market for an affordable alternative that doesn’t compromise on functionality.
The necessity for SEC filings research has been well documented, as best-in-class organizations incorporate the review and analysis of peer and competitor public filings into their corporate disclosure and filing processes. This practice is proven in boosting compliance, increasing competitive awareness and providing the context and justification required to make sound strategic decisions. Whether you’re looking to replace 10K Wizard, or are reviewing SEC filing search engines for the first time, here are four reasons why disclosure research is an indispensable practice in most organizations:
1. It Keeps Your Company Competitive
Consistently performing disclosure research helps improve your business in a variety of ways, but one of the most common uses of corporate disclosures is to gather meaningful competitive intelligence on industry peers.
In fact, 90% percent of Fortune 500 companies are already conducting competitive analysis on their peers, so you should be too. Documents such as 10Ks and 10Qs contain crucial metrics and narrative surrounding, among other things, company financials, plant and property, directors and officers, and foreign operations. Essentially, competitive intelligence uses market research to answer targeted questions on specific peer groups. As this Inc.com article asserts, “In a competitive marketplace, up-to-date information can make the difference between keeping pace, getting ahead, or being left behind.” Effectively utilizing these tactics can serve as an early warning sign for changes in the competitive landscape.
2. It’s the Most Effective Corporate Health Litmus Test
The information contained in SEC filings is also an effective tool for benchmarking against peers, and provides companies with a foundation of comparative data to identify performance gaps within a particular industry, as well as ways to bridge those gaps. There’s no shortage of literature touting the importance of benchmarking; among other things, it allows executives to capture specific data on cost and performance of their company relative to peers, which fosters continuous improvement. The best means for maintaining a formal benchmarking process is via a robust disclosure research solution that provides quick, easy access to this information, allowing your company to make benchmarking an ongoing, proactive process.
3. It’s Essential for Identifying Risks and Opportunities
Another way disclosure research can improve the business is through analysis of data and trends to help identify crucial risks and opportunities. Not only can SEC filings be leveraged as templates for best practice disclosures, resulting in improved compliance, they can also help mitigate the risk of restatements as a result of misrepresentation of financial data. In addition, disclosure research presents business opportunities by helping companies leverage competitive insights to produce more accurate forecasts and drive innovation. It also acts as a catalyst to external reporting teams to enhance the reporting process, save time, and increase productivity.
According to a 2013 report from EY, “Forecasting the future is risky, but businesses that fail to look forward will almost certainly be left behind in an increasingly competitive, globalized world.” In the pursuit of entrance into an emerging market, or growth in times of economic downturn, companies must reposition themselves by cutting costs and increasing efficiency in order to flourish.
4. It Delivers Real Results
In a recent survey conducted by DisclosureNet, 82% of respondents said that their disclosure research solution saves them time, while 54% stated that it improves their financial reporting process. In addition to saving time and improving the external reporting process, 59% of those surveyed claimed their productivity has increased by more than 50%, while 23.2% reported productivity increases of over 75%.
Without a disclosure research and analytics tool, there is little to no time for organizations to perform proper analysis to help improve overall company performance and strategy. Using an SEC document research solution increases the efficiency, accuracy, and controls surrounding corporate disclosures while simultaneously decreasing redundancy, repetition, and time-consuming manual searches in regulatory sites like EDGAR and SEDAR. The right solution means that employees will no longer be inundated with time-consuming, low value work and can focus efforts on more meaningful tasks.
DisclosureNet is the single source for SEC filings that fills the gap left behind by Morningstar’s 10K Wizard. With DisclosureNet, users can effectively conduct comprehensive research on 20+ million public company filings from the U.S., Canada, Australia and UK financial statements. It also provides access to the latest accounting rules and regulations which are full-text searchable and directly linked to real life precedent examples of how other companies have handled specific accounting rules. Real-time updates from SEC EDGAR & SEDAR plus full-text search capabilities and over 40 search filters are just a few more of the features that will help guarantee the most precise search results possible.
Using DisclosureNet, you can also set up automatic alerts on peers and merge, compare, or easily share research with your colleagues. This powerful combination in one single, cost-effective solution ultimately leads to higher productivity and better quality disclosures, leaving extra time for data and trend analysis to improve performance within the organization.
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