Attachment_J-1_EDGAR_Modernization_Goals_and_Objectives.pdf

Modernization Goals and Objectives

J.1 The Goals for EDGAR Modernization

The main goals for the larger EDGAR modernization are to:

Reduce complexity (such as technical, rule, process, data, etc.), Reduce costs to the agency, such as:

o Staffing costs, o Equipment costs, o Development costs, o Operational costs, both business operations and Information Technology.

Reduce costs and burden to the filing community while providing more services and assistance, Reduce costs and burden to the data provider community while providing more data in easier to use formats, and

Seek more advantages from automation for all EDGAR stakeholders than currently exist.

The SEC intends to pursue these main drivers through innovative ideas, solutions, and recommendations that will help revolutionize Electronic Disclosure at the SEC. Innovative thinking, with focus on the main goals, will reduce costs to the filing community, data provider community (and, in turn, the investment community), and the SEC. Here are some examples of topics that are on the table to be analyzed during the period of this contract to help reduce complexity and burden:

Reduction in the number of form types, Reduction in the duplication of information collected, Reduction in the number of acceptable data formats, Simplification of the fee collection and balance management process, which, in turn, will help reduce complexity and resources spent on backend account management function, Review of the timing of filings, late filings, hardships, and deadlines to manage such inputs more efficiently or with automation, Integration of more commercial products to replace existing custom code, and

Other innovative ideas that the contractor will bring to the table and that the contractor will identify in their interviews with stakeholders.

On the functional innovation side, the SEC intends to pursue improvements in input and output, communications between filers and SEC staff, and functional look and feel tailored to a better filer experience and investor experience. Listed below are some examples of innovative thinking in this area:

A question and answer input mechanism. Currently, filers must know the appropriate form type when filing on EDGAR. This leads to many filings coming into the Commission using the wrong form type when a filer doesn’t know the exact form type and they guess incorrectly. Modernized

EDGAR is envisioned to assist the filer by walking them through a series of questions that leads them to the correct form type. Of course, there will also be a path that allows more experienced filers to quickly traverse through the questions.

A single use document. Currently, for some form types, such as 10-Ks, filers must create multiple document files with all of the same data to satisfy requirements for its use. One file is sent to the print shop to print glossy copies for shareholders. Another file is created for use on the company website. Another file is sent to the SEC for filing purposes. Each of these files has to be reviewed by attorneys, accountants, and corporate officers to ensure it is accurate and consistent. The SEC is anticipating the exploration of the concept of a single use document, where filers create one file to be reviewed by attorneys, accountants, and corporate officers that can be used to satisfy the formats for all three user groups.

Mergers and acquisitions. Currently, the SEC does not link companies as they are purchased by or merge with other companies. Modernized EDGAR is envisioned to be able to trace the history of companies easily through the phases of its life cycle of ownership and affiliation.

Automation and Analytics. Currently, EDGAR resembles a paper process that has been automated. It gathers, stores, and allows review of documents using computers as if they were paper, much like a large document library system. The SEC is anticipating that modernized

EDGAR will take advantage of technology by performing analytics in real-time or near real-time as documents are coming into EDGAR, then routing them to the appropriate SEC staff for review or comment. Modernized EDGAR may store structured data instead of documents, where it makes sense, to allow better and more frequent analysis of that data, tailored output of the data, and better analysis for a company from one year to the next or for a number of companies grouped together for comparison. Better back end tools are envisioned to assist SEC staff in their review and comparisons as well, such as red-lining and exportation of the data.

The bullet lists in this section are not exhaustive. The SEC is looking for innovative ideas for its EDGAR

Modernization from the successful offeror. During this contract, contractors will be required to interview stakeholders who have a good understanding of and experience with electronic disclosure at the SEC on both the producing and consuming sides, as well as SEC staff who have a good understanding of the internal workings of how EDGAR helps them to do their jobs and how it might be improved to assist further.

J.2 Objectives for This Contract and the Larger Modernization Effort

This section describes two different sets of objectives:

1. The set of objectives that pertain to this contract specifically (to be acquired by this contract), and

2. The set of objectives that pertain to the larger Modernization of EDGAR (to be acquired by a subsequent contract).

The set of objectives that pertain to this contract specifically are important for the execution of this contract and must be adhered to by the contractor.

The set of objectives that pertain to the larger Modernization of EDGAR are also important in the sense that any work performed as part of the execution of this contract must NOT exclude, constrain, or conflict with any of the modernization objectives from any future decision or recommendation made by the contractor in the execution of this contract. They are listed here to provide the contractor with a foundation by which their analysis must be bounded. Any recommendation, improvement, or decision made that may add risk or deviate from the objectives that pertain to the larger Modernization of EDGAR must be fully documented as part of this effort.

J.2.1 Objectives That Pertain To This Contract Specifically

1 – Simplify the Electronic Disclosure Requirements and Process surrounding EDGAR

Recommend improvements to the existing rule structure and organization.

Recommend improvements to synchronize the rule writing process with the software development process.

Recommend improvements in governance and enterprise coordination for the existing rule writing system being administered by multiple Divisions within SEC.

Recommend improvements to the interfaces for rule writing.

Ensure recommendations directly relate to the delivery of solutions that are technically sound, efficient, and effective.

2 – Simplify the technical complications that exist today in EDGAR

Recommend improvements over existing technical issues so that the issues are not repeated in future rule writing and solution delivery.

Identify and recommend resolutions to complexities that exist in the current implementation.

Identify and recommend resolutions to design deficiencies and deployed issues that should be simplified and/or removed.

3 – Improve the business processes that are identified for Business Process Re-Engineering

Diagram and improve current business processes that are involved in the Commission’s electronic disclosure and review activities.

Look for enterprise-wide economies of scale and functional similarities that would improve business process flow and cut down on coding differences between business functions.

Develop enterprise-wide business functions.

4 – Simplify and Improve cross-cutting processes

Recommend changes to synchronize the rule writing process with the release development process to avoid implementation risks to schedule, budget, and functionality.

Ensure problems/issues identified in one task are vetted completely in the other tasks (for example, a technical problem/issue identified may have roots in the rule writing process

(Electronic Disclosure Requirements and Process Review) and/or the business process (Business

Process Re-Engineering), therefore proper coordination amongst all three tasks is paramount.)

J.2.2 Objectives that Pertain to the Larger Modernization of EDGAR

Most of the objectives that pertain to the larger Modernization of EDGAR are development and implementation objectives. Development and implementation of a future EDGAR system are not within the scope of this contract. These objectives are listed here to assist the contractor to ensure consistency throughout the Modernization process, starting with this contract. The contractor should use this list as a foundation for decision-making, recommendations, and improvements and should avoid analysis and decisions that lead away from these objectives. In the event that a recommendation, improvement, or decision adds risk to or deviates from a modernization objective, the analysis that led to the recommendation, improvement, or decision must be fully documented so that the SEC can decide whether or not they want to take on the risk or deviate from the objective.

1 – Modernize and enhance EDGAR functionality

Improve the presentation quality and structure of SEC filings:

o Implement modification to all EDGAR subsystems supporting filing preparation, submission, processing, public access, and dissemination capabilities.

Reduce filer costs and effort associated with preparation and submission of required SEC filings.

o Provide easy to use interfaces for beginner filers and more complex shortcuts for professional filers.

o Review, minimize, and simplify data formats, validation, interfaces, etc.

Support the SEC’s responsibilities, including acceptance, analysis, and review of filings o Improve the pipeline processing and workstation applications and, at a minimum, satisfy specified modernization requirements.

Provide for rapid, reliable, fair, and cost-effective distribution of filings to all users of EDGAR data, including disseminators and developers of related value-added products.

Investigate the possibility of a multi-use document for filing with the Commission.

2 – Modernize and enhance the EDGAR architecture and create an environment that can efficiently and effectively develop solutions that meet the needs of the users, adhering to a proven standard development methodology

Provide a flexible and open architecture that facilitates the introduction of new functionality, new technologies and the future development of new products and services responsive to the needs of

EDGAR users. It is SEC’s objective that modernization of EDGAR should be towards complete re-engineering and redevelopment and not be based on incremental improvements of the current system. The SEC will require new ideas to re-engineer the current system from the ground up.

This includes more reliance on COTS products that conform to the maximum extent possible to de-jure standards and less reliance on custom code. At a minimum:

o COTS products with open nt parts of processing, including control of automated processes, management of processing queues, validation, and parsing may be effectively implemented in COTS) interfaces must be considered when they provide the necessary functionality (e.g. significa…see another copy because theres stuff here.XXXX o Provide a modular system architecture which will enhance performance by allowing flexibility to increase or decrease capacity based on expected volume.

o Minimize duplication of functionality across EDGAR subsystems.

o Minimize duplication of code across all EDGAR components.

3 – Efficiently and effectively operate and maintain EDGAR

Improve the efficiency and effectiveness of O&M services and the O&M environment in order to:

o Attain an O&M environment (software, hardware, telecommunications and tools) that achieves low cost EDGAR operations and maintenance in part through the use of COTS.

o Leverage the use of COTS to allow the SEC users more freedom to make routine changes, customize operations and change the system parameters without reliance on contractor assistance.

To the extent possible, such changes must be capable of being accomplished by an SEC authorized user through workstation functions.

Effectively manage services compliant with the latest version of ITIL.

4 – Efficiently modernize disseminating electronic submissions to the public with an eye towards minimal service disruption.

Provide for rapid, reliable, fair, and cost-effective distribution of filings to all users of EDGAR data, including disseminators and developers of related value-added products.

Convert SGML headers to XML headers.

Modernize dissemination architecture and pricing model.

5 – Provide modernization guidance, engineering, and strategic thinking during modernization to assist the SEC in augmenting their strategic plan for EDGAR by:

Incorporating state-of-the-art technology to major enhancements and suggesting the transition to state-of-the-art technologies as part of the release planning cycle and strategy.

Continually assessing the technical and business direction of the EDGAR system using subject matter experts within the SEC and within the company.

Assessing the business implications and processes of current and future functionality, data formats, products, and tools in efforts to simplify and improve the disclosure process.

Assisting in the preparation of the SEC and the EDGAR system in defining the future of EDGAR within the time scope of this contract and beyond.

6 – Efficiently and effectively develop solutions that meet the needs of the users and that adhere to a proven standard development methodology

Provide a flexible and open architecture for all development activities that facilitates the introduction of new functionality, new technologies and the future development of new products and services responsive to the needs of EDGAR users. The SEC is looking for new ideas to re-engineer the current system during every development cycle to include more reliance on COTS products that conform to the maximum extent possible to de-jure standards and less reliance on custom code. However, SEC will not require a certain percentage of custom code vs. COTS. At a minimum:

o COTS products with open interfaces must be considered when they provide the necessary functionality (e.g. significant parts of R&A, including control of automated processes, management of processing queues, validation, and parsing may be effectively implemented in COTS).

Routine modifications include such items as: adding filers, changing current organizational structures, adding and removing form types which do not require the development of new validation rule sets, changing fee calculations, changing routing tables, and changing assignments.

A development cycle, also called a release cycle, is defined as the software development life cycle of a major release. Major releases occur, on average, every three months.

o Provide a modular system architecture which will enhance the potential for future privatization of EDGAR subsystems or the decoupling of EDGAR subsystems.

o Minimize duplication of functionality across EDGAR subsystems.

o Minimize duplication of code across all EDGAR components.

o Effective application of organizational CMMI Level 3 to the development methodology.

o Utilize a development methodology that, at a minimum, has a robust requirements management and traceability process through testing.

o Utilize an effective and accurate resource estimation process.