XBRL adoption and e-government implementation at HMRC and Companies House

XBRL Adoption at HMRC and CH

XRBL and Electronic Government Initiative

The research highlights the importance of e-government and systems to help achieve fully integrated government systems in the near future. E-commerce led to the development of technology capable of revolutionizing the way in which common transactions are handled. These technological developments and the successes of e-commerce led to the idea that this same technology could be used to transform the bureaucratic processes of governments around the world. This was the topic of the current research study. However, this concept has met with a considerable amount of skepticism from scholars, who focus on the number of failed projects as evidence of e-government to serve the public's needs (Fountain, 2001).

Despite the pessimistic attitude of some towards the electronic business movement, there is still a considerable faction that feels that one can learn from past failures and transform them into suceesses. They are willing to give new projects a chance to succeed before passing judgment on the effectiveness and ability of e-government to serve the needs of the people. This study explored HM Revenue and Customs office (HRMC) and Companies House (CH) and their movement towards e-government as a means to conduct day-to-day transactions. Currently, many companies and agents are reluctant to file their Corporate Tax returns and VAT electronically using the current system. This hindered the ability to develop e-Government to the point where paper filing becomes obsolete.

This research explored technology adoption process of these two agencies and its impact on the ability to institute XBRL as a means to file personal and business taxes electronically in response to a mandate that all filing be done electronically by April of 2012. This research will explore the results of the analysis by comparing the adoption process by XBRL and CH, using the TOE model as the framework for the argument.

The Problem

Electronic services have several advantages for both HMRC and CH through improved online services, lower operating costs and the ability to deliver services to a greater number of consumers. Among the problems cited for failure of companies to adopt e-filing were problems with HMRC's website due to technical problems and difficulty encountered during authentication processes (HMRC, 2006). Problems with customer logins and frustration with the system were key reason that customers cited for preferring to file their taxes using the old papare filing system. In order to realize a return on their investment and respond in accordance with the Aril 2012 e-filing mandate, HMRC needs to increase electronic filing of taxes. This would also benefit customers as well, by providing them a more convenient and expedient means to file their taxes. In order to do this, HMRC needs to make certain that the system is working properly and is as frustration free as possible for the tax filer.

In order to address the technical issues and authentication issues behind the unwillingness of clients to use the electronic filing system, the use of Extensible Business Reporting Language (XBRL) has been proposed. Aside from an exploration of the innovation adoption process between the two organizations, the purpose of this research is to explore the possibility of establishing a joint filing facility that combines the services of HMRC and Companies House to file corporate tax returns by the year 2012.

Companies House (CH) has initiated the first XBRL-based system for filing a set of abbreviated and dormant accounts. This system has been in existence since 2005 (Companies House Annual Report, 2008). Since the inception of this system, CH has experienced a serge in its electronic filing services. This increase supports the use of XBRL for the processing of electronic filings and provided the rationale for this research study. This study focused on the motivations of the government in mandating such a system, the process of adoption, and factors that promote or serve as hindrances in that process.

The Internet is an excellent channel for communicating many types of business information. The interviews conducted as part of this research support this fact. The final results of the interviews indicate that XBRL and its successor, iXBRL will more than likely be adopted as the language of choice for the electronic filing of tax documents of both corporate and personal taxes. The adoption process encountered several roadblocks that will be discussed at length throughout this chapter. However, it also had many positive influences that led to its final adoption at both CH and HMRC.

Key Research Findings

XBRL is open standard and free of license fees, making it a cost-effective solution to corporate and government entities alike. XRBL is platform independent, making it an excellent candidate for many different types of systems and applications. The adaptability of the language gives it potential for the development of an international standard using it as a backbone. In Chapter 1, it was found that XBRL is easy to adapt to a number of applications easily. These applications include applications from financial and accounting reports to social networking. These factors would tend to favor the adoption of XBRL for many applications including those being considered by HMRC and CH. However, despite these positive aspects, it is not likely that the joint collaborative project between CH and HMRC will result in future success.

In order to understand key issues regarding the adoption of XBRL, let us examine how this change came about. XBRL is a form of XML (Extensible Markup Language). Mark-up language consists of a dictionary of tags that allows the computer to understand and description of the text. One of the more familiar and early mark-up languages is HTML, which is used for web pages. XML is a more generic form of mark-up language that allows the text to be used for a number of applications, such as PDAs, text messaging via mobile phones and other ecommerce applications. XML is an open standard, which means that anyone can use it without paying a royalty. Software packages are developed using XML and those can be patented and protected, if they qualify.

XBRL is an extension of XML that takes the tags further and describes the environment in which a set of financial accounts have been drawn, XBRL is specifically designed to serve the needs of the accounting community and includes elements such as the year, period, and name of the account. However, for the most part, tagging systems such as these are meant to be read by computers, not humans. They are difficult to read, as one has to either understand the tags, or ignore them. They are complicated to the eye. They are not easily exported to word processors or spreadsheets, such as Excel. Therefore, many application have HTML and XML tags embedded in their programming.

XBRL is an excellent language for computers, concentrating on data transfer, rather than human readability. There was a concern that the tax inspector, or the customer receiving a request from CH may not be able to understand it (Keeling, 2009). Inline Extensible Business Reporting Language (iXBRL) was the solution to the problem. This tagging system allows the system to bridge between HTML and XBRL, allowing XBRL documents to be read by humans. XBRL is about submitting data, not about submitting documents, as tax filers currently know them. Much apprehension exists regarding the accuracy of data and "mistakes" that are a result of the translation process, rather than filer error. Prior to iXBRL, many accounting programs used PDF files as a means to communicate data in a meaningful way (Keeling, 2009). iXBRL will add the element of user-friendliness to the XBRL submission process. This was a key concern in the development of eGovernment services.

One of the key factors in the promotion of technology is to gain understanding of the adoption process within an organization. This research explored the adoption of XBRL in two different UK regulatory agencies. A comparison of the adoption process of these two agencies gives us an example of the types of processes that may be experienced as other agencies and companies begin to adopt XBRL as the backbone of their system.

In addition to the adoption process itself, the study also explored the factors that influence the innovation adoptions process in the two government agencies. Kanal (2006) found 40 critical success factors including technology, organization, external and collaborative efforts. Tornatzky and Fletcher (1990) presented similar findings and found that people, organizations, politics and intercompany relationships also contributed to the adoption of innovation and new technology. In the case of CH and HMRC, the relationship used to be informal, with a casual exchange of information between the two organizations. According to interviewee, Jeff Smith (P2), this relationship changed as soon as they entered into a collaborative project together. The relationship changed and the formal hierarchy harmed the personal relationships that had been formed. It introduced a formality that replaced the former team spirit and complicated interactions between the two agencies.

Overall, the interviewees provided a wealth of information and expressed opinions that provided an excellent basis for the analysis of the technology adoption process. Within these findings are many insights and differences in opinion as to the benefits and caveats of XBRL adoption. In the a case of HMRC, privacy issues are a key factor in the reason for their partial adoption of XBRL, rather than the full adoption undertaken by CH. The interviewees were from varied backgrounds and included three from HMRC and four from CH. They included persons from many different facets of the project. They included interviews from accountancy, the Manager of Online Services, a Technical Architect, and a Process Advisor. These interviewees represent technical personnel who are directly involved in the project implementation. The list of interviewees also included senior management, including the Head of Development, Senior Project Manager, and Business Systems Analyst.

The interviewees represent diversity in opinions among those in various phases of the project. They represent numerous disciplines that are involved as well. Each professional was concerned about the overall project, but they focused mainly on their area of expertise. The various positions of the interviewees provide more rounded opinions concerning the various aspects of the adoption process. For instance, upper project managers have different opinions and concerns from the accountants involved in the project. These two have different opinions and concerns than the IT professionals. The selection of interviewees revealed valuable diversity in the opinions expressed. This provided the researcher with an excellent source for getting to the reasons behind the different adoption processes, allowing the researcher to focus on the many aspects of the process, rather than on the end result.

Each interviewee provides the researcher with a focused perspective on the problem. They provide their opinions and perspective from their own personal point-of-view and concerns over the project. By looking at the combined effects of these viewpoints, one can begin to see the entire picture of what happened during the adoption process. There is always a complex number of players, each with differing perspectives in the adoption of any technological process. Each has their own focus, which may make it difficult to see the overall picture. The focus of this research is on the factors that influence the adoption of XBRL as a means to promote e-filing of taxes that will be required in the following years. It focuses on the processes involved. Therefore, analysis results will be based on composite responses and on the coding scheme discussed in Chapter 4. However, the analysis will not rely entirely on these schemes, but on qualitative reflection by the research as well.

Part 1: Roger's Innovation Adoption Stage Process

Roger's innovation adoption stage process was discussed in Chapter 3 as a potential framework for the analysis of the adoption process. knowledge, persuasion, decision, implementation, and confirmation. The first analysis of the processes will use the framework provided by Rogers as its basis.

Stage 1: Knowledge

Roger's knowledge stage were not entirely under the control of the HMRC and CH. This stage came as a result of the Lord Carter Review, which recommended that XBRL be adopted by the agencies. However, due the ease with which XBRL can handle data, both agencies were already in the process of researching XBRL. Lord Carter's Review simply made them search for knowledge more earnestly then they were by themselves. It gave them the push to take steps towards the next stage in the process and final implementation of XBRL. The adoption of XBRL was no longer an idea, it was a goal, with a definite end date set for implementation. Both agencies had to work towards that end.

Rogers assumes that the knowledge and awareness are a function of the adopter's education and exposure to mass media. Although both agencies were already researching the possibilities of XBRL over their PDF and XML formats, the Lord Carter Review acted as a change agent. However, the power level between the recommender and the adopter are differential in this case. They are not on an even playing field and the recommender has considerable authority over the adopter. The adopter does not have a real choice in going along with the recommendations. They must take the recommendations of their superiors. Both CH and HMRC were already familiar with XBRL, the Lord Carter Review gave them the push to further their research.

Rogers indicates that knowledge finding is not a passive activity, particularly when the need exists for the innovation. In this case, the need to explore the innovation was thrust upon the two entities. They had to examine the technology and learn as much as possible about it, only their search became active, rather than casual. The first formal meeting where everyone agreed to explore XBRL at HMRC occurred in 2002 as a result of a workshop. From that point, HMRC held over 20 meetings to explore XBRL (Interviewee Jeff Smith, P2). From the very beginning, XBRl seemed like the solution for CH. They immediately saw it as the solution to their paperwork processing problem. They know that XBRL would help to resolve data reconciliation problems and the problems of processing tremendous amounts of paper filings (Ros James, P5). At this point, the process for HMRC and CH are similar and both immediately recognized the potential of XBRL long before the Lord Carter Review recommendation.

Both Jeff Smith and already had a strong opinion of the capabilities of XBRL and its use in e-filing taxes. Greener was already aware of XBRL and its potential for the online filing of taxes. He was aware of its technical positives and negatives and could provide a comprehensive assessment of the technology early on in the adoption process. Greener served as a consultant for many of the other persons involved in the adoption process and was a valuable source of information for other team members. Greener played a key role in the dissemination of knowledge to others within the company.

Interviewee Richard Harries of HMRC has a basis strictly in the tax business. His area of expertise revolves around the taxonomy of the filing process. He feels confident that XBRL will be able to provide the needed solutions in this area. Both Greener and Harries see the limitations of XBRL in their ability to deliver a consumer readable format. The problem lies in finding a way to take advantage of the data capability of XBRL, without having the consumer file the same information in redundant formats. In this case, iXBRL may provide the solutions.

These interviews highlighted the various levels of pre-existing knowledge about the process and its impact on the dissemination of knowledge among other adopters. We found that the opinions of knowledgeable adopters may have an impact on the opinions of other adopters. In this case, Greener may have been seen as the "expert" due to his extensive IT background. This may have given him more credibility and his opinions more weight in the dissemination of knowledge among other team members. However, it may not be apparent to other adopters that Greener's opinion is only one aspect of the abilities of XBRL to fulfill the needs of HMRC. There are certainly many other aspects to consider, such as the successes expressed by Harries or the ability of XBRL to be read by the consumer.

One of the most important aspects that was discovered during this stage of the innovation adoption process is that during the knowledge stage, opinions begin to be formed that may ultimately affect the final decision that is made. If the adopter has no previous knowledge of the technology, they are open to suggestion and may be influenced by those with strong opinions. If they already have a considerable amount of knowledge, they may be unwilling to listen to the opinions of others, particularly if that person has a difference in opinion. These factors were not discussed extensively in the works of Rogers, but became apparent during the interview process of this research. In this manner, this research extended the works of Rogers to include the affects of group dynamics in the knowledge stage. Required interest vs. genuine interest has a profound impact on the enthusiasm demonstrated in the knowledge gathering phase of adoption.

This research highlighted the adoption process introduced by Rogers. It provided a greater depth of exploration into the Knowledge stage proposed by Rogers. We learned that knowledge acquisition has many facets that go beyond basic knowledge of the technology. We also learned that biases can be formed early on that may affect the evaluation and decision stage. These biases can have a positive or negative affect on the willingness to adopt the technology. Power struggles and hierarchies also play a role in team dynamics, as we saw in the influence of Greener and Harries over other team members. Rogers' innovation stages of adoption are complex when the decision involves a team.

Knowledge dissemination differed between HMRC and CH. The basic process was the same in both organizations. In both organizations the knowledge acquisition began with a few members of the team. At HMRC, it was key personnel such as Smith, Greener, and Harries that first explored the topic in depth. The knowledge that they learned was disseminated to the rest of the group through a series of formal meetings. HMRC took a more informal approach to the knowledge dissemination process. CH used a more formal approach. They had a few key people conduct, test, and design the system. Knowledge was passed from the few "experts" on XBRL to the rest of the group through formal training sessions. CH used a staged process of knowledge dissemination, where the knowledge was first passed on within the company and them it would be disseminated to the corporations that would be required to use the new filing system. HMRC tended to pass the information on in a large chunk, rather than using a formally staged process like that of CH. These two approaches demonstrate differing routes to knowledge dissemination and highlight the organizational culture and personal style of each agency.

Stage 2: Decision

Rogers' decision stage is the second stage of the innovation adoption process. In its most simplistic form, the decision stage is where the organization reaches a decision to adopt or reject the innovation. Rogers assumes that the decision-making unit is exposed to the innovation in the knowledge stage. The processes that occur during this stage are complex and vary according to the organization. This research focuses on the processes involved in the adoption of XBRL, rather than on the final decision itself.

The interview results between the HMRC and CH demonstrated the influence of organizational culture and experience with e-filing. In order to gain a deeper understanding of the factors that influence Rogers' decision stage we will compare and contrast the fundamental elements of these processes for these organizations. Rogers' assumption that all members of the decision-making team are exposed to the technology and have at least some knowledge of it will be considered to be true for this group of interviewees. Both organizations used different, but equally effective means to disseminate knowledge among team members. Although they have various levels of knowledge and exposure to XBRL, by this point in the process, they have at least some working knowledge of it, as it relates to their field of expertise.

Smith points out that the motivations of HMRC differed from his personal motivations. The motivation of the department centers on getting better quality data. It is based on reducing risks and about the necessary compliance processes. However, Smith's personal viewpoint any change is disruptive to the day-to-day processes of the organization. He feels that even though the concept behind XBRL is excellent from a technical standpoint, the adoption of any technological change would be detrimental due to the learning curve involved.

In the case of CH, the committee had the job of "selling" the idea to others. They were not allowed to approach the topic with complete impartiality. They had been handed a mandate from above and were responsible for building interest in XBRL. This gave them a biased opinion and influenced the adoption process as well. They had to present XBRL in a positive light that would lead to the eventual adoption, as proposed in Lord Carter's Review. This case study revealed that bias can play an important role in the decision-making process.

Another key factor that played into the adoption process was the weight placed on various factors in the examination. For instance, Smith placed very little weight on the interoperability of XBRL with the systems already in place and on other technical issues. He placed much more emphasis on he human factors of the technology and the affect that it would have within the organizaiton. Smith did not support XBRL because he did not feel that his clients would support it, but he did see the technological superiority of XBRL over the methods currently being used. Greener placed all of the weight almost exclusively on the technological, rather than human factors involved in XBRL. This difference in emphasis had a significant impact on the decision-making process at HMRC.

The decision-making process for HMRC involved an extensive knowledge gathering phase, including consultation with various experts and others in the field. It involved examination of case studies from other countries that had implemented XBRL. There were many factors that were considered in the decision-making process for HMRC. Before making the final decision HMRC examined the issues of foreseeable difficulties, data usage, security, and the issues involved in the joint reporting facility, and other strategic measures. This thorough examination of the various factors involved in the HMRC adoption decision would lead one to believe that this played a key role in the decision.

The decision-making process regarding XBRL at CH was quite different from that at HMRC as they already had prior experience with XBRL. Their decision making process was less emotional and based more on the technological aspects than the decision at HMRC. Due to their experience with XBRL, they knew many of the technical issues that would arise. They were able to take a more objective look at XBRL than HMRC. Their decision as to whether to adopt HMRC was based on their opinions of their own past experiences.

As one can see, Roger's decision-making stage is complex and difficult to predict. Many factors play into the decision process. Different weight is placed on various factors. The decision to adopt innovation is not a strategic decision as we have seen. It depends on the expectations of the company, or in some cases, past experiences with the technology. There is no clear method for making decisions and many of them depend on the dynamics within the individual organizations. The "personalities" of the organization play a key role in the decision process as well as their experiences with the technology in the past.

Stage 3: Implementation and Confirmation

Rogers considers the last stage to be the implementation and confirmation stage. This stage will never take place if it is halted in the decision making process. Strong opinions formed in the knowledge gathering and decisions making stage may have a negative impact on the ability to move a project into the implementation and confirmation phase.

The implementation stage includes the actual installation and use of the technology. In this stage of the adoption process, the focus turns from mental action to physical action. The implementation of the technology becomes a reality.

In very few cases does the adoption process halt in this phase. All of the technical issues are typically resolved in the decision making phase. However, there are cases, where the adoption can be halted, particularly if the technology does not perform as expected. This is an issue that could be a possibility for CH. It is possible that the adoption process could be halted if XBRL does not meet their expectations or if it causes problems on the client end. However, another possibility is that the chosen language for HMRC does not work as expected for the individual tax filer and that they will reconsider XBRL as an alternative in the future. HMRC has adopted XBRL in a limited basis for their corporate filer, but not for their individual filers.

The confirmation stage is a time of evaluation and assessment just after implementation. There is no set time limit for the confirmation stage and much of it depends on the type of technology being implemented and the application for which it is being used. Sometimes the evaluation stage is weeks and sometimes, it is years. During this time the functionality and usefulness of the technology is assessed. Technical problems are noted and the ability to perform the required tasks is assessed. If at any time, it appears that the new technology is unacceptable, the adoption process could be halted and alternatives sought. The chance for replacement with a different technology depends on the availability of substitute technology and the amount of time and money required for the investment. If new technology is chosen, then the adoption process begins again from step 1 for the new technology.

The adoption of new technology is influenced by the conditions for which the technology is needed. The process of technology adoption is generally undertaken for the purpose of fulfilling a need. In this case, the need is to improve the tax filing and reporting system in the UK. CH decided to implement XBRL and currently has plans to expand the types of filings that can be accomplished online. In the future CH plans to expand its services to include joint returns or dormant and abbreviated accounts (Jo Jones, P6). HMRC will continue to evaluate its success with corporate filings using XBRL and will continue to work on the problems that it faces with privacy issues and the filing of individual returns.

Part 2: TOE Model Analysis

Now, we have examined the cases of adoption of XBRL at HMRC and CH using Rogers' Stages of Innovation Adoption. We found that innovation is a complicated process with many factors that can affect the outcome. Through an examination of the HMRC and CH cases,, it was found that the stages do not always progress in the order described by Rogers. Sometimes there is a blending of the stages and it is difficult to determine where one ends and the other begins. Next, we will examine these two cases using the TOE model.

XBRL and iXBRL represent an opportunity for the government to offer higher quality services to consumers and for consumers to experience the benefits of improved governmental efficiency. However, none of these benefits will be realized if the technology is not adopted. The adoption process is essential to the success of the project. In order for the new innovation to be useful, it must become ingrained in the business processes and corporate culture of the organization.

The TOE model extends Rogers work by including the external environment in the analysis. Rogers analysis only addresses internal factors that affect the adoption process. As one can see from the HMRC case and the CH case, the type of data and dynamics within the organization have a dramatic impact on the final outcome of the adoption process. Perhaps the greatest contribution of these two cases is that they demonstrate how differently Rogers innovation adoption process can be when applied to different organizations.

The TOE model will help the research to examine factors outside of the organization that will affect the innovation adoption process. The TOE model combines technological, organizational, and environmental factors that will have an impact on the adoption process of XBRL at HMRC and CH in the UK. The TOE model is consistent with the work of Rogers and provides another aspect to the analysis. Each of the factors in the TOE analysis may have differential effects. Some may positively affect the adoption and some may have a negative impact on the adoption process. These factors may have different effects at different stages of the adoption process. Understanding how factors in the TOE model affect the stages of the adoption process differently will help us to compare and contrast these two adoption processes at HMRC and CH respectively.

Organizational Factors

Several organizational factors are key to the success or failure of the adoption process. These factors include the formal and informal linking structures, communication processes, and the size of the organization. Linking structures within HMRC are considerably more formal than at CH. This became apparent in the manner and approach of the interviewees. It was apparent in the manner in which they addressed each other. At Ch, the linking structures are more formalized, with specific routines for getting resolution to problems.

The same can be said for the communication processes at both organizations. HMRC tended to use informal discussions and open meetings. CH used formal training sessions designed to communicate a certain message. These two styles worked within the organizational contexts, but represented differences in organizational culture within the organizations. Communication style has the greatest impact on the adoption process, regardless of the style used. If the organization communicates effectively than communication can have a positive impact on the innovation adoption process. Ineffective communication can have a negative impact on the adoption process. For both CH and HMRC, their effective communication processes support the adoption of XBRL.

Zhu, Kraemer, and Xu (2003) found that larger firms are more likely to adopt technology than small ones. This occurs for several reasons. First, larger corporations have greater resources to devote to the adoption of new technology. Secondly, they are more likely to achieve economies of scale. They have a greater capacity for bearing risk. Finally, they have greater influence over trading partners to force them to adopt the technology. HMRC and Ch are government entities and although they are not in the private sector, they possess many of the same characteristics as a larger corporation in terms of technology adoption and the ability to bear the risk. They have the power to mandate use of the new system by the public for the filing of their taxes.

In terms of organizational scope and size, the HMRC and CH can be classified in much the same manner as any privately owned large firm. They are more likely to adopt technology than smaller firms or organizations. Due to the volumes and expense of returns being processed, technology has become a necessity in the ability to handle the large volumes of work that have become the norm within the organizations. Organizational factors make it likely that HMRC and CH will adopt technology as the means to resolve their cost and efficiency issues.

Organizational factors are important at every stage of the adoption process. Communication is highlighted in the knowledge and adoption stages. The effectiveness of communication styles is important to the proper dissemination of knowledge to those at the appropriate levels of the organization and the community. The ability to communicate not only the right message, but also the timing of the message are important. In the case of CH, the routes of communication, as well as the timing of the messages was carefully laid out in stages. At HMRC, although the route of knowledge dissemination was similar, their was no carefully laid out plan. Knowledge transfer happened on an as needed basis. This may prove to be a hindrance when the organization decides to introduce XBRL to the individual filing population.

Environmental Factors

Consumer readiness and infrastructure is an important factor in the decision to adopt e-business, at least in the private sector (Zhu, Kraemer, and Xu, 2003). Internet penetration is a key factor in consumer readiness. For the private entity, if the customers do not have the Internet, then the adoption of e-business may not be feasible. For government entities such as HMRC and CH, this factor presents an interesting conflict. In April of 2011, all tax filings are mandated to be performed online. As discussed earlier, many business clients already have computers and access to the Internet. However, not all individual filers will have access to, or knowledge of how to use computers for their tax filing.

The infrastructure to provide access to the Internet is already in place, but not all of the individuals will have access to it. Either these clients will have to purchase computers, an expense that many individuals cannot afford. They can use public computers, such as at Libraries, but this gets into security and privacy issues. They may also have to bear the expense of having their taxes prepared by a tax professional and e-filing for them. These options will create an extra inconvenience for some individuals. However, it also opens up a greater demand for businesses that offer e-filing services.

In a discussion of the TOE model, many arguments are based on private sector business. However, for government entities many of these factors are different. For instance, part of the external environment for private sector business is competitive pressure. There is no competition in e-government. Therefore, this element of the TOE model does not apply to this case. Another difference is the focus of technology adoption.

In the case of e-business, the convenience factor is weighted towards the consumer. It is based on allowing them greater convenience and access to the products that they want. In the case of e-government, the focus is on the entity, not the tax filer. The public has an obligation to file their taxes, whether it creates an extra inconvenience or not. The government entity is the one that experiences convenience in this case. They can mandate what the public must do and the public has little control over the decision. Past experiences with e-filing indicate that only a small percentage have chosen this option in the past. However, as of 2012, 100% of all filers will have to find a means to file their return by electronic means. In this case, adoption of the technology focuses on the needs of the government, not on those of the public.

The environmental and regulatory issues typically addressed in the TOE model affect CH and HMRC equally. This only differences may be changes in the timing of filings. They both must follow similar government regulations, although they have specific issues that only affect their organization, such as the need to interface and provide information the public by CH. HMRC is affected to a greater degree by privacy issues. However, for the most part, both organizations are equally affected by outside environmental factors. This was one of the few places where the both organizations are on equal terms. They both must contend with similar environmental issues.

Both CH and HMRC have similar legal pressures being thrust upon them as well. Lord Carter's Review placed both agencies in the situation of being required to find a process that worked in their agency for e-filing taxes. The adoption of XBRL for use by the HMRC and the CH has the support of top government officials. The HMRC will receive close to ?170 million for the upgrade of their systems. Government reforms, such as CHIPS, that reduces the tax burden on small businesses will also have an impact on the implementation of e-filing. Currently, the ability to adopt the change depends on the ability to filter the changes down to legal advisors and others working with small companies. E-filing would allow regulatory changes to be built right into the software. The individual filers would be able to obtain the correct knowledge needed for filing their return correctly.

The Banking Industry as Regulatory Hurdle

One does not typically think of the banking industry as a regulatory agency. However, they function in this manner unofficially. Their opinions regarding the potential success, failure, or risks of a project will play a key role in the decision. Essentially, if the bankers decide not to finance the project, it will cease to exist. Without the available financing, the project is at a standstill, regardless of the progress of the adoption process within the organization. The organization can decide to adopt the technology, but in the end, they must convince the bankers to continue the project, or the adoption process is halted.

The importance of the banking industry in the adoption process was a key element that was not addressed in Rogers innovation adoption process. The TOE model indirectly includes outside factors in the environmental factors, but this model also fails to address the importance of the banking industry decisions in innovation adoption. In the end, the bank has the final word on whether the project will be completed. If they decide to fail to fund the project, the adoption process is halted. The bankers have their own agenda concerning the project.

This factor brings up the issue of balance of power in the adoption process. This topic is not addressed adequately in either Rogers process or in the TOE model. The organization may successfully progress through the process of XBRL adoption. However, if they cannot convince the bankers, all of the effort is lost. This highlights the importance of finding concrete evidence that supports the benefits of XBRL and its superiority over other methods and software. The banking industry serves as a regulator with a considerable amount of power over the organizations. They have the ultimate veto power by means of withholding funding for any project that they choose not to support. Unlike the organization that must justify their reasons for the project and present compelling evidence to support the need for technology, the banker does not have to justify their position. It is enough for the banker to simply to refuse to finance a certain project and to back another.

The case of HMRC demonstrates that the road to adoption of technology is a perilous and treacherous road. Along the way, there are many factors that can disrupt the process and either slow it, or stop it completely. Organizational culture is a key factor in the development of these characteristics. However, we also found that the banking industry can represent an insurmountable obstacle in the adoption process. Ultimately, it is the banking industry that makes the final decision and is the key determinant of whether the project will continue past the knowledge stage and proceed to the implementation stage. If at any point in the implementation phase, the banking industry does not see the results that they expected, they can pull financing and stop the project. Smith highlighted the importance of catering to the interests of the banking industry. He states,

"What we want to do is to engage some consultants and work with some large institutions and big banks possibly and really concentrate on external financial reporting benefits which I think is the key [R19]. not the benefits to accountants or HMRC, but what the likes of large banking institutions to say that XBRL can save them fortunes but they can't see it or they don't want to see it."

The case of HMRC highlights the importance of external factors and entities on the adoption process. In the case of the banking industry, the balance of power becomes an important issue in technology adoption.

One of the key differences between the HMRC and the CH case is that HMRC was starting from scratch. CH already had an XML Schema base system in place. They are adding the XBRL service to its existing backbone. This is much easier than building from scratch and played a key factor in the justification of XBRL in the case of CH, but not in that of HMRC. This case study provided the basis for in-depth analysis that was not possible without the interviews conducted in conjunction with this research study.

Greener attempted to justify the costs of the switch in a reduction of errors and the ability to process claims faster and more accurately. He explained,

"There is always an element of error, capturing the data in XBRL means that we eliminate re-keying errors, and re-keying costs and we can get much more data, and we can analyze the whole of corporate filing for a year of almost 10 million companies. So you can see where it benefits HMRC and Treasury because it allows them to have so much confidence in the data they are collecting and boiling them down for a politician can understand [R93]."

Apparently, this justification was not enough to convince those in control to continue with the project. The transition to XBRL would mean extensive re-keying and software development to bring the current system into the XBRL environment.

This argument by Greener, when compared to the response by Smith demonstrates that there are many different opinions regarding the costs and benefits of the project. It also highlights the factor of the personal perspective of the various players in the adoption process, as discussed earlier in this chapter. From the perspective of Richard Harries (P4), XBRL would mean a tremendous improvement over the manual system. Translation of tax codes into the technology were one of the foreseeable obstacles, but Harries felt confident that the technical department would be able to accomplish the task. All of the players have a small piece of the puzzle and not everyone can see the project from the others point-of-view.

Conclusions Based on TOE Analysis

Using the TOE method to analyze the external factors that influence adoption of XBRL by HMRC and CH reveals several characteristics that distinguish these entities from others in the private business sector. Their position as government entities places a different emphasis on the external factors than would be expected in the private sector. If one were to make a generalization regarding the importance of internal and external factors that influence the adoption of technology in government entities, one would have to place a greater importance on internal, rather than external factors. External factors affect private business entities to a greater degree than government entities due to their need to attract customers. Government agencies do not have that concern. The public has little power to control government actions. In private business, the customers have considerably more control over the entity. They can refuse to use their services. This is not a choice for government entities. This is an important factor in the adoption process.

Comparison to the private business sector makes the importance of this difference more apparent than when one considered CH and HMRC within their own regulatory context. Another difference between government and private entities is the level of infrastructure and technology available. The ability to fund technological projects is usually not a problem for government entities. They have a greater tolerance for risk than private entities. They must please stakeholders, but there is a greater tolerance for error than in the private sector.

In terms of organizational factors, HMRC and CH function more like a big corporation than a small business. However, there are many differences that distinguish them from the private sector. Their bureaucratic structure is much like the formal hierarchy of a corporation. However, as we found in the interviews, even these government agencies can perform using formal structures or they can function in a more informal fashion. Internal factors, such as those discussed in Rogers innovation adoption process play a much more important role than the external factors found using TOE analysis.

Challenges of the Adoption Process between HMRC and CH

HMRC and CH faced several challenges in the adoption process, many of which have been highlighted throughout this chapter. As we address these issues in a deeper manner, several key differences between the adoption processes of HMRC and CH begin to emerge. The problem of security is a key issue that faces both organizations. An examination of how they tackle this issues will provide further insight into the adoption processes within the organizations.

XBRL is not the most secure application for data transfer. All data is public information. In the case of CH, this was not an issue because all corporate filing information is publicly accessible. However, in the case of HMRC, privacy and confidentiality issues abound, as this agency primarily deals with individual tax payers. XBRL may not be the best option for e-filing HMRC documents due to the extra-added privacy issues.

Issues of privacy are not as critical for CH, due to the type of information that they collect. This information was supplied by interviewee Jo Jones, but was not addressed in the adoption discussion by HMRC personnel. The decision partially to adopt XBRL may have been due to technical issues than originally thought. However, it is difficult to determine the extent to which technical issues were involved in the personal disagreements cited by Smith. In an analysis of issues related to the adoption of technology, it is often difficult to determine the root cause of problems. The answers are often wrought with personal opinions and missing information, as was found to be the case at HMRC. In this case, HMRC may not have realized the same benefits as CH, due to the types of data that they process.

Rogers adoption process model provides a general outline that is followed by almost every individual or company, but there are many factors that can alter this process. In the case of HMRC and CH, it would appear on the surface, that the adoption process would be similar. However, when one digs deeper than the surface, it becomes apparent that major differences exist in the types of data that they process and how it must be handled concerning privacy issues.

Rogers innovation adoption process and TOE analysis provide valuable tools for analyzing the process involved in the adoption of technology. We found that government agencies function somewhat like a large corporation in terms of the technology adoption process, but there are many differences as well. In the private sector, it is of utmost importance that the customer accepts and adopts the technology as well. In the case of HMRC and CH tax filers will be mandated to use the new system, whether they prefer the new system or not. The focus of the technology adoption process at HMRC and CH is on the service provider, not the end user. Although, extensive effort has gone into making certain that the system functions as it were intended.

Responses were more consistent among CH interviewees, than among HMRC interviewees. CH interviewees seemed to provide the same general path to adoption of XBRL. They were able to overcome challenges that needed to be addressed along the way. HMRC was unable to overcome the challenges that they faced with the new system as far as individual tax filers were concerned. The type of data collected by each agency was found to be the root of differences in the adoption process. HMRC feared that XBRL would not provide the privacy and security needed by their agency for the filing of individual returns. The type of data to be processed and its distribution characteristics were found to be key factors that placed limits on the adoption process.

The literature review found that online delivery systems define a certain type of relationship between the regulatory agency and the citizen. The technology serves as the means for communication regarding transactions. In the case of CH, some customers complained about the inability to customize the form with their own logo (Ros James, P5). Changes were made to attempt to comply with their requests, but these attempts were unsuccessful. For now, customers must use the provided format and style sheet. The purpose of XBRL stresses functionality over aesthetics. The purpose is to process forms more quickly and efficiently. It is nice to make this an enjoyable experience for the public, but it is not necessary for the functionality of the software. Some sacrifices such as these must be made in order to develop a system that will meet the needs of the majority. This challenges continues to plague HMRC as it struggles to meet the April 2012 deadline for the filing or all returns using XBRL. iXBRL may provide the solutions that it is looking for as it attempts to make the system friendly to the individual tax filer.

The digitization of HMRC and CH tax filings is only a small step in what is to become a large scale, interdepartmental project of grand scale. The digitization of government services is a process that must happen in stages. Several agencies have already instituted many digital features. According to the literature review, the eventual goal is to develop a "Government Gateway" to serve as a central registration and authentication point for secure online governmental services (HM Government, 2008, p.27), Digitization of the tax filing services is an important step in the development of comprehensive e-government services. Success of the digitization of this process is crucial to the ability to digitize other departments and functions as well.

According to the literature review, only 15% of small companies choose to file their returns electronically, as opposed to electronic filing. It was surmised that the need for computer equipment was a key factor in this decision and that many small businesses could not afford the computer equipment necessary. For large companies, the problem appears to lie in the number of notes accompanying the tax return. This was found to be a problem for both HMRC and CH.

The problem with corporate filings was found to be associated with differences in accounting methods. CH is currently attempting to develop software the meets the needs of small businesses, as well as that which meets the needs of large corporations as well. The inability to handle the types of data needed by HMRC was a key factor in the failure to adopt XBRL for their individual tax applications.

Privacy Challenges

The literature review found that privacy concerns were among the most important issues in the adoption of e-government. It is feared that access to and abuse of personal information may pose a key roadblock to the adoption of e-filing. This problem is not confined to the computer and the internet, but this technology makes the scope and scale of the potential problem much larger. This factor was supported by the interviews conducted as part of this research. Privacy concerns and the inability to restrict certain information was a key factor in the decision of HMRC to fail to adopt XBRL for individual tax filers. It was felt that the software would not provide the security needed for the processing of individual tax information.

CH addressed the privacy issue much differently. They used a front end/back end approach that allowed corporations to enter information in the back end, but only allowed access to certain publicly available information through the front end. It is not known if a similar approach would work for HMRC in the future, regarding personal tax information. It is suspected that the same approach developed by CH would work for almost any other government agency. One of the key factors in the failure of HMRC to consider these options was that their senior IT personnel was fond of XML and presented a biased perspective on the abilities of XBRL.

There is much to be done if the tax filing system using XBRL is to be online and working sufficiently by the April 2011 deadline. The literature review revealed a general atmosphere of concern over the ability to make all of the necessary changes to accomplish this task. Of particular concern was the potential damage to small accounting firms. If they cannot afford the software, training and equipment to make the change, they may not be able to file their taxes on time, or at all in some cases. With no option to file a paper return, many of these problems may run into compliance issues. Compliance will not be as big of an issue for larger companies and government agencies.

One of the key concerns raised in the literature review is that accounting is not an exact science. The types of information and how it is reported have many legitimate variations. These differences in accounting technique represent a key challenge in the adoption of e-filing for companies. Finding format that will suit diverse business needs poses another challenge in the adoption of XBRL by the HMRC and CH. Thus far, this issue has represented a key roadblock in the adoption of the software for both companies. However, Ch was able to work around this issue, while it remains one of the factors that led to the failed adoption by HMRC for individual tax filers.

The key problem addressed in this literature study is the ability to motivate companies to adopt XBRL as the method of choice for electronic filing of their required tax information. Many companies currently prefer to use Word, Excel, or other existing software over XBRL and it is anticipated that it will be difficult to convince them to change (ICAEW, 2009). The literature review indicated that many have concerns over the adoption of XBRL for their accounting needs.

The interview responses supported these points that were found in the literature review and in Chapter 2. Many of the suppositions and results of other studies corroborated the findings of this research. However, it was found that this was only true for studies that included government agencies. They did not apply to the private business sector. Government agencies have a different set of circumstances than those in the private sector. The research supports work previously performed by others in the literature review.

Combination of CH and HMRC

Aside from the adoption of XBRL, the combination of CH and HMRC was also discusses in the Lord Carter Review. The idea was to create a one-stop location for the filing of all types of taxes. This proved to be a more complicated task than initially anticipated. The outcome of this project is not yet known. Through an examination of the process of XBRL adoption, several factors became apparent that will affect the combination of these two government agencies. It may be possible to contain them in the same physical location or location on the Internet, but combining the business processes will prove a difficult task. That is not to say that it will not happen in the future, only that many factors that affect the adoption of XBRL will also affect the ability to combine these two agencies.

The interview with Jeff Smith points out several differences in organizational culture that will affect the ability to combine the two departments. Regarding HMRC's relationship with CH, Smith commented that they had been working on a consulting basis with CH long before the Lord Carter Review. Before the Lord Carter Review, CH and HMRC maintained an informal relationship. However, since the mandate to combine the two agencies, the relationship has changed to a more formal one. Smith feels that this formal relationship had an impact on the ability of the two organizations to function together effectively.

He says,

"The link between CH and HMRC back in the days was quite informal when I turn in some meetings with people in Companies House, shake hands, and build relationships with people. This is not the case now, especially with having Jack Mansfield now, if I

need to know anything, I know who to talk to. It was not Jack back then [R1]."

The interview with Jeff Smith also highlighted another organizational culture factor that affects the ability to adopt XBRL at HMRC. They like to do things by consensus, and if one or two person do not agree, then the process of adoption is halted. They do not continue with the process despite one or two rejections. They like to have everyone 100% on board. Smith states,

"We do things largely by consensus, which is very good things but quite frustrating when you try to make thing happen, and we can see that in our consultations done in this project (XBRL). ..We do not want to impose things; we like to take people with us [R1]. If one or two people say it is not good idea, then we do take this seriously. It is frustrating if you feel you are right, which I have seen in XBRL. The process is tortuous and slow."

This is an organizational characteristic that can play a key role in the adoption process. In many cases, a power structure exists in which the opinions of the managers can override the opinions of others on the team. Smith admits that concern over the opinions of everyone creates a tortuously slow system, but it also functions to serve as a key to long-term support. When the project is finally approved, everyone is on board with it 100%. However, it is also possible that an impasse could result in a complete halt of the project, just because one or two people disagree with the idea.

Lord Carter proposed joint filing based on the fact that HMRC is also part of the corporate tax return. Carter's recommendation was based on the feeling that corporate filing of returns to both HMRC and CH was an unnecessary burden on corporate tax payers. However, Greener points out that Carter did not understand the differences and necessity of both filing systems. From Carter's point the double filing represented waster and redundancy. From the point of Greener and other IT professionals, it is necessary due to fundamental differences in the data and problems with restricting public accessibility to certain corporate information.

Data sent to CH is in an abbreviated format that is publicly accessible. However, the data sent to HMRC requires full P & L. accounts, so this is not the same content as is sent to CH. Small companies can use CH's abbreviated format, therefore, they do not have to file the full account required by HMRC. It is estimated that between 80-90% of the reporting companies are small enough that they never have to file the full account with HMRC. Joint filing with HMRC would make filing for small businesses much more time consuming and difficult. This is particularly the case with sole proprietors. This is a major point of contention that needs to be resolved and one that Lord Carter did not understand when he made his recommendation.

CH saw many of the same advantages as HMRC in the ability of XBRL to justify and check accounts. They saw it as a much faster way to process claims and its decided advantages over manual methods of verification and validation of accounts. We have already discussed the successful adoption process of XBRL by CH and the steps entailed in Rogerian adoption of the software. CH represents a classic case of a successful adoption. Interestingly, the problem of bank financing and its role in halting or continuing the project did not come up in the interviews with CH personnel. Jo Jones (P6) commented that funding was not a problem for CH. It was apparently an issue of great concern to HMRC, but not to CH.

Interviewees at HMRC do not feel that joint filing with CH is possible. However, Ros James (P5) is more optimistic in the ability to accomplish joint filing between the two entities. CH recognizes the complexity of the task and the differences in information being reported as key challenges. CH foresees these challenges being overcome by having one software package where the client types in the information and one report gets fired off to HMRC and the other to CH, each containing the appropriate format and information for each recipient. This is a practical solution, even though it may seem technically challenging at first. CH has already tackled several tough technical issues in the adoption of XBRL and they are much more optimistic in the ability to tackle similar challenges in the future.

One of the key problems with the joint filing is privacy of information. This was a major issue with HMRC and demonstrated itself to be a difficult roadblock to the process. CH customers also expressed concerns over private information accidentally being released to the public by CH if joint filing happens (Jo James, R217). This problem also represents a key concern for CH. Unless the problem of privacy of information submitted to HMRC is resolved, this issue may be the stopping point in the ability to achieve joint filing with HMRC and CH. Interviewee Gareth Lewis (P7) also felt that joint filing with CH and HMRC would happen in the future.

Conclusion

Chapter 5 presented the results and analysis of the interviews with key HMRC and CH personnel. It used information from the background and literature as the framework for the analysis. It discussed compared the innovation adoption process at HMRC and at CH using Rogers' innovation adoption process and TOE analysis as a key means of comparison. Elements not included in Rogers analysis and the TOE model, but found elsewhere in the literature review were also included in the finding and results.

The findings and results of this study undertook a thorough examination of the adoption processes of HMRC and CH. The paths of adoption were found to be similar in many ways, but in this case, these paths led in different directions. For CH, the path led to use and adoption of the technology. This comparison allowed the researcher to focus on the processes involved, rather than the end result. HMRC only adopted XBRL for a portion of their filings. They are yet to adopt it for individual filers.

It was found the adoption process for both HMRC and CH followed the process set forth by Rogers. Because the entities involved were government agencies and were not subject to the market factors of the private sector, internal factors were found to be more valuable than external factors in determining the course of action. This research successfully met the goals set forth at the beginning of this research study. It allowed a thorough examination of the processes involved in the adoption of innovation for government agencies.

Both HMRC and CH faced similar challenges in the adoption of XBRL. CH was able to find innovative ways to meet these challenges, leading to the ultimate implementation of the technology. HMRC saw the problems are insurmountable. They did not seem as enthusiastic and open-minded about XBRL from the very beginning. They preferred the methods already in place. A lack of initiative and enthusiasm was apparent in the interviews with key HMRC personnel.

These findings One of the most important findings of the study was the role that the balance of power played in the ability of the process to progress. Differences in opinion were evident in the interviewees that reflected their personal opinions, biases, and the limited perspectives of their job description within the company. All of these opinions contributed to the whole in a significant way. However, in the end, the players with the most power made the key decisions regarding disposition of the XBRL project. Chapter 6 will discuss the implications of these findings in relation to understanding the process of innovation adoption.

XRBL and Electronic Government Initiative

Chapter 6: Conclusions and Implications

The findings of the research study found that using Rogers theory of innovation adoption, the process of adoption is similar for both HMRC and CH. The research took an explanatory approach to answering the key research questions. The outcome of the adoption process was not as important to the researcher as the process itself and its implications for the introduction of future innovations into the system. This research viewed the technology adoption process through the lens of the two organizations involved. However, these findings are only important in the context of the larger project. The following will explore the findings and conclusions of the research project in relation to the process of the development of a one-stop e-government portal.

Comparison of HMRC and CH

The adoption of XBRL and the proposed joint filing of business tax forms represents a step in the process of the development of the eventual e-government portal. As regulators, HMRC and CH are quite different in terms of the type of data that they require. The biggest difference between these two entities was found to be the level of privacy necessary for them to carry out their proposed functions. CH has a greater interface with the general public than HMRC. CH must provide abbreviated company information to the general public that requests it. HMRC has contact with the general public through the filing of individual and small business taxes. However, this interface is unidirectional. They receive information from the public, but this information is largely private. They do not have to provide confidential information about filers to third parties. This creates a very different accessibility and data sharing environment for HMRC and CH.

HMRC managers and IT professionals faced the same data related challenges experienced by CH. However, they did not see a way around them and they soon became bogged down in the details of the implementation process. The difference in the results obtained by HMRC and CH may have been the attitude and approach taken by key leaders within the organization. This supports the role of the leader in the success or failure of a project. These experiences can serve as lessons to be learned in other projects undertaken by these or other agencies on the way to e-government.

The adoption of XBRL was being considered by both organizations long before Lord Carter's report. It is natural for technologically oriented persons to keep up with the latest trends and developments. Therefore, when Lord Carter's report was published, both agencies were already exploring the possibilities that lie with XBRL. They already had a collaborative relationship, albeit an informal one. The publishing of Lord Carter's report simple formalized the approach being taken by both organizations. The April 2012 mandate gave both organizations a definitive timeframe in which to work. Both organizations were under the same constraints and were already considering the merits of XBRL as an addition to or replacement for their existing systems. They were already in Rogers' knowledge stage. When Lord Carter's Review formalized the goal, both organizations then began a more formal knowledge gathering process.

The outcomes experienced by HMRC and CH differed largely due to differences in organizational culture and outlook. These two organizations are key examples of how managerial support and enthusiasm for a project can affect the enthusiasm of the rest of the employees. The attitude of leadership is contagious and as these two organizations demonstrate, leadership outlook and opinions at the beginning of the project can affect the final outcome. If leadership wishes to push the project forward, they must express enthusiasm and optimism from the beginning. They must carry this attitude throughout the project. It they lose their support for the project, then this attitude will permeate the rest of the staff. This lesson can be applied to almost any organization that wishes to undergo a change or adopt a new technology.

Lord Carter mandated the technological changes and the changes in the ability to file taxes jointly for both organizations. However, Lord Carter was an outside third party. He was not an IT person and he did not work inside the agencies. He was a knowledgeable outside, making recommendations to complex structures and organizations. These recommendations may have been well-meaning and in what was perceived to be in the best interests of the public. However, as these two cases demonstrate, the final outcome of these proposals depends on a complex adoption process, at which point a number of circumstances can bring the project to a halt.

Key Research Questions

This research project explored the technology adoption process in the establishment of e-government services. Several other agencies have adopted e-services, either partially in for a majority of their services. The e-movement is reflective of the needs to serve an ever growing population and to increase the efficiency of the departments. Using technology to its maximum capacity helps to reduce the costs of manual services and it helps to provide a better and more expedient service to the client. The Internet and computers to service the public represents a genuine concern for the welfare of the constituents that the government serves. This trend is not expected to stop, but is expected to gain even greater momentum in the years ahead.

The ability to provide effective services through electronic means is in its infancy. This research explored the crucial stage of technology adoption. The introduction of new technology into business processes represents a dramatic change for many organizations. The adoption of technology involves the process of change management to some degree. In many cases, the business processes themselves will be greatly altered by the introduction of technology. Employees will have to learn to use the new technologies and how to operate in the new environment. For many their job descriptions and their daily routine will be changed. They have many new circumstances in the work environment to which they will need to adapt. This research provided insight into the processes, obstacles and challenges that agencies may undergo during this time of transition.

The insights gained during this research project will help us to understand better what might be expected in the technology adoption process for other agencies. Having this insight will help managers, regulatory agencies, and policy makers better to plan for the changes that will take place as the agency undergoes this important transition into the electronic government environment. It will also help to anticipate public response to the changes as well. Knowledge is the key to better future planning of technology adoption processes. Better planning is the key to a smoother transition to the technology. This research provides important insight into these processes so that better planning can take place in the future, not only for HMRC and CH, but for other agencies as well.

This research addressed three key research questions in order to gain a thorough understanding of the processes involved in XBRL adoption. The three research questions are:

1. What process is followed by HMRC and Companies House in their XBRL adoption?

2. How do the factors identified in the TOE model influence XBRL adoption process within both organizations?

3. What are the challenges that have been faced by both organizations during the course of adopting XBRL?

The answer to the first question was answered thoroughly in Chapter 5. Both agencies were found to follow the steps in Rogers innovation adoption process. We learned several things about the Rogers process that will help to extend our understanding of his processes. Both organizations undertook the knowledge gathering phase long before Lord Carter's Review. This suggests that knowledge gathering is a function of the normal human state. We are curious by nature and continually seeking out new ways to solve old problems or to develop new ways to do things. Innovation and technology improvement arises from this basic human curiosity. Although, both agencies were already considering the technology, Lord Carter's Review placed a greater urgency and reprioritized the project. Now they had to gather knowledge with the intent of serious consideration for the future.

In the case of HMRC, knowledge gathering was largely though consultation and talking. However, CH took a more formal approach to the process. They decided to do some small scale development and run tests. Through this process they confronted many of the basic concerns that both agencies soon discovered. Problems with data transfer and readability were key concerns from the beginning. However, CH's active approach enabled them to work through their problems and to devise a working design.

For HMRC, the adoption process closely followed the order prescribed by Rogers. It is often difficult to determine where one phase begins and where the next begins, particularly when the process of adoption is informal. However, if one looks closely, they can see the key elements of each stage. For CH, the adoption process also closely followed the stages outlined by Rogers. However, we found that at times, the process seemed to integrate two steps into the same phase. For instance, development of the software was part of the knowledge gathering stage. However, this could also be considered pilot testing in the implementation stage. Once the applications had been tested on a targeted group of test subjects, it was time to engage the public in the knowledge phase. They had to introduce the technology to the public and train them on the processes. All of Rogers stages were present in the adoption process by CH, but they were not necessarily clear as to which portion belonged to which stage.

The processes examined in the first research question tell us that, in general, one could expect the adoption process of any agency to follow the basic steps outlined by Rogers. However, it also tells us to expect variations in the process. The steps presented by Rogers serve as more of a guideline than a rule. The adoption process is a highly malleable process. Neither organization decided to plan for the stages in the adoption process. Yet, they developed organically through the actions necessary in the development process. The process at CH was somewhat more planned than that at HMRC. They planned to develop the technology internally, and then provide awareness and training to develop the processes with customers outside of their organization.

This comparison of the processes may suggest that when an organization decides to undertake the implementation of new technology, a planned approach will be more likely to yield success than an unplanned approach. The company could use Rogers process to develop a project plan. These phases are similar to any of other project management process. There is a design phase, an implementation phase, a testing phase, and a management phase. Rogers processes could serve as a template for future technology design processes.

Research question two asked how factors in the TOE model affect the adoption process for both companies. Once again, this issue was thoroughly examined in Chapter 5. It was found that TOE model factors can be important for the success of a project. This is particularly true for factors that involve the customer side of the equation. The government has the capability to mandate that the public use its technology. The private business cannot do this and must take the customer into consideration. These issues applied to both CH and HMRC.

The key concern in the adoption of technology was for the convenience of the government, rather than concern for sales figures. If technology meets the needs of the government, they have the ability to force use of this technology. They do not actively seek to displease the public and there is an attempt to design systems that function as intended and that are easy to use from the public point-of-view. However, the needs of the government are placed over those of the individual user. These key differences between the concerns of government agencies and the concerns of private business represented key findings of the research study. Understanding these differences will help in the future planning and understanding of e-government projects in the future. It is always best to gain the confidence of the public through excellent system design and usability, but in the end, it is the government that has the final word on the technology usage.

The Third research question to be answered by the research study was to identify the challenges that were faced by both organizations in the adoption of the technology. The interview responses provided valuable clues and extensive oratory on the problems that both CH and HMRC encountered during the process. The research found that both CH and HMRC encountered similar difficulties in the adoption process. Both organizations faced problems with data transfer and readability issues. However, CH was able to resolve these issues, where HMRC did not resolve them for individual tax filers. Their ability to resolve these problems had a direct impact on the success or failure of the project. It also affects the likely success of future projects. CH's ability will make it more likely to be confident in the success of future projects as well. HMRC will face greater challenges on future projects, unless it finds a way to adapt, as was done by CH. Perhaps the partnership of these two agencies will aid in this process. HMRC may be able to learn from the successes of CH.

The final challenge that was faced by both agencies was that of information privacy. Due to the purpose and type of data processed by each agency, this issue affected them differently. CH typically shares information with the public and provides access to company tax records as requested. The switch to XBRL was easier for CH because its privacy concerns were not as critical as those of HMRC.

HMRC does not provide of show the information of any of its clients to the general public. It collects more extensive information than CH. The information that HMRC collects for individuals and small businesses is more sensitive than that collected by CH, making privacy a more important issue for HMRC. The open-source nature of XBRL made it difficult to ensure privacy of information. This was a key factor in the decision to discontinue the adoption process at HMRC. It is also a key point of contention in the ability to provide joint filing capabilities for both CH and HMRC. It is feared that critical information will be obtained by those who are not allowed to have it. Until this issue is resolved, joint filing of returns will not be possible. However, CH is confident that these technical issues can be resolved; HMRC is not certain of this. The issue of privacy demonstrates how technical constraints can serve as key difficulties in the adoption process, and can even stop it altogether.

Lessons Learned

The proposal by Lord Carter may or may not be feasible in the future. There are still many steps in the process and decisions to be made. This is true for both organizations, both in their individual adoption of XBRL and in the combination of the filings of the two departments. There are many possibilities in the future outcomes of the project and at this point any prediction would be speculative. It is likely that the success of CH in the adoption of XBRL will cause HMRC to re-examine its own circumstance. They may be able to use the example by CH to work through its own technical difficulties. This may be with voluntary or though further mandate by authorities. Regardless of the final outcome of the XBRL project, this research has revealed many important factors that influence the outcome of the innovation adoption process. The following summarizes the lessons that have been learned through this research and how they can be applied to other organizations, both inside and outside of the e-government project.

The first lesson learned through the research project was that different people on the project have different attitudes and opinions that have an impact on the ultimate outcome of the project. Each interviewee provided an overview of the project and then launched into specific details of the project that were of particular concern to them For instance, IT professionals tended to focus on the technical and programming issues. Accountants focused in the ability to accurately represent the tax information. Managers, such as Jeff Smith, focused on financing, project management, scheduling, and other managerial concerns.

This research found several factors that were not included in either Rogers process or the TOE model. These factors were found to play a major role in the adoption process and need to be considered as a factor in the future process of technology adoption processes. These new contributions to an understanding of the adoption process are a direct result of this research study. They represent a key contribution of this research to the field.

Another factor that was discovered during the research project was the type of data being processed and the sensitivity to confidentiality of the data. The technology being proposed and the sensitivity and type of data to be processed must be a good match. In the case of XBRL, it was found that the security protocols and capabilities were a good match for the data being handled by CH, but not for that being handled by HMRC. We found that a one-size-fits-all approach will not work in all cases. This factor could be examined in the beginning of the project. If the data and technology are a good match, then the knowledge gathering process can continue.

The most important contribution to the analysis of the technology adoption process that was not included in either Rogers or TOE analysis is the importance of the balance of power both internally and externally to the organization. The balance of power was highlighted more in the case of HMRC than in the case of CH. The case of HMRC highlighted the importance of two different sources of power that can affect the technology adoption process.

Managers and those on the upper levels of the organization have considerable power over those below them. We discussed the importance of their support or lack of support for a project and how it can influence the end result of the project, The attitudes of management and leadership are highly influential on the outcome of the project. However, their influence goes beyond influencing the overall attitude and acceptance of the project. Depending on the structure and culture of the organization, they can make managerial decisions that agree with, or override the opinions and decisions of those below them.

The manager can choose to ignore or agree with the findings of others. In many cases, upper managers have absolute veto power and can overrule the decisions of those below them, In other cases, they must make recommendations to higher boards or committees. These boards or committees then have the final say over the project's fate. The employees may be able to have input into the process. The organizational culture and structure of the agency have an influence over the weight that this information has on the final decision regarding the project. Support or rejection of upper level management has a direct impact on the outcome of the project. They can stop it on a dime, or force it to continue, even if others do not agree. In order to ensure a successful project, it is important to gain the interest and support of upper management. Each organization determines for itself the amount of power and influence that a manager can exert over the outcome of a project.

The various levels of the organization and the amount of power attributed to each level plays a key role in the success of the project. Power stemming from the organizational structure represented internal power. However, others from outside the organization can have a direct influence on the outcome of the project. Other regulators, those higher in the governmental chain of command can have a direct on the project as well. They can have the same veto power as upper managers in some cases. These authority figures represent external power structures that can affect the outcome or continuation of a project.

Perhaps the greatest external source of external power that can affect an organization is the banking industry. If they choose for any reason, to discontinue funding of a project, there are not many factors that can override this decision. They have the ultimate authority to fund or fail to fund a project. With many of the other external sources of power, they have the interests of the citizens or at least that of the agency in mind. The banking industry's motives are different. They will seldom fund a project out of the goodness of their heart. They are in the deal to make profit for themselves. They must be convinced that the project will yield some return on their investment, or they will not be likely to fund the project. The banker is the strongest player in the power game. They hold the ultimate veto power, even over the board of directors and upper management.

The effects of the power structure within the organization and outside of the organization have a direct impact on the outcome of the project. Yet, the effect of power on the outcome of the project was not discussed by either Rogers or the TOE model. The balance of power both inside and outside of the organization should be included in future analyses of innovation adoption processes.

One final point to consider can be found in the interview with Greener. He cautioned that one has to be careful in translating the experiences of one country into the decision making process of another. In the knowledge gathering process, HMRC relied heavily on case studies involving the adoption of XBRL. Greener points out the caveats that can stem from relying too heavily on these comparisons. He states, 'It is always instructive to see other's experience. In the U.S., they are mandating XBRL

for SEC filings, but it is regulatory and not tax collector, so they want very detailed accounting information, but we want in HMRC more details in tax information [R83]. So,

you have to be more careful about whether experience in another country could be compared to our own experience, or whether you compare like to like, so IRS will be more comparable, and closer. IRS is not doing anything at the moment. This was highlighted in the case between HMRC and CH. We found that what works for one organization does not necessarily work for another."

Comparison and case analysis can be an important source of information, but Greener summarizes the problems that can arise by taking this approach.

Conclusion and Implications

This research found that in many technology cases involving government agencies, the processes outlined by Rogers play an important role in the adoption process. The key stages defined by these theories can be distinguished in the cases of HMRC and CH. TOE analysis proved to be less important in cases involving government agencies than for the private sector. Several factors beyond those discussed by Rogers and the TOE factor were found to play an important role in the adoption process. These factors should be included in the future analyses of the adoption process. Factors, such as managerial support and banking industry support can be helpful predictive factors in the success or failure of the project. These factors should be used in the future to extend the analysis of the adoptive process of Rogers.

The implications of this research are important in the future ability to assess and predict the obstacles that similar agencies may face as they attempt to adopt the necessary technologies mandated by the e-government movement. Rogers analysis and the TOE model are excellent places to start. Although Rogers analysis is more relevant to government agencies, TOE analysis adds to the depth of information by considering external factors. The key recommendation that results from this research is to use combined Rogerian and TOE analysis to explore the potential success or problems that may be encountered in the innovation adoption process.

However, the analysis process should not stop with Rogers and TOE analysis, but should be extended to include the factors discovered during the course of this research. These factors include the personalities of the various players in the organization and the amount of weight that they will have on the final decision. Leadership support should also be taken into account and its impact on the attitudes of the rest of the employees. The organizational structure and culture should also be considered. The formality or informality of communication styles should also be considered. The internal and external power influences should also be included in the analysis. The balance of power should be analyzed internally and externally, as well as the amount of influences that external sources of power will have on the project.

This research made several key contributions to the study of the innovation adoption process. The study used two different agencies that received a mandate to explore a certain technology and adopt it. We learned as much from the failure of the adoption by HMRC as we did by the successful integration of XBRL at CH. No one knows what the future will hold for either organization or for the joint filing of these two agencies that has been proposed. However, the final outcome is not important to this research. The most important contribution of this research is the insight gained into the factors that affect the innovation adoption process for agencies that will ultimately be included in the e-government project. The results of this research will allow for a more organized and informed approach to the innovation adoption process for other agencies as they prepare for the changes that e-government will entail. This research makes a key contribution to the knowledge base regarding the innovation adoption process first proposed by Rogers.