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Business Intelligence & Data Analytics

How Accountants Help Drive Value from Big Data

Day 2 of the AAA Accounting IS Big Data conference started off with a great panel of executives from companies focused on the data and analytics space:

  • Jim Johnson, CFO, Adaptive Insights
  • Jeremy Ivener, Vice President of SAP’s HANA Cloud Platform
  • Roman Stanek, CEO, GoodData
  • Adam Wilson, CEO, Trifacta

A side note on diversity: it was interesting to see that even in academia, that the people chosen for panels and speakers seem to all be older, white, and male.  This was true for 9 of 9 speakers on day 1, and excluding the lunch panel of young professionals (which by design is usually chosen for diversity), 15 of 18 speakers on day 2.  I had first really noticed this trend in the Sage Summit speaker line-up this past summer where probably 95% of their main stage speakers were white males.  Thankfully some of the upcoming vendors don’t seem to have this bias, for example Xerocon had women, Asians, and even a Hindu ex-monk included in its main stage program.

What Makes a Good Big Data Analyst?

When asked “what characteristics or skills should we be looking for in job candidates” that would be well positioned for working with Big Data, the panel responded:

  • Intellectual curiosity = The person needs to want to look into “why” something is the way it is and to be willing to dig into the data to understand what indicators and drivers are available. They also need to have the mindset of finding better ways to do things and not just taking the status quo for granted.
  • Breadth and collaboration = The person needs to be able to understand and collaborate with other parts of the organization (beyond finance). They also need to be able to work with more than just financial data.
  • Business architect = The person has to be able to answer the question of “how do we (re)design the business so that data analytics has the business effect it is intended?”

I think the Business Architect description sums up the first two bullets well because this takes the analysis and insights and ensures that they are used to actually have real impact across the entire organization.

Big Data Driven Business Transformation

The panel also provided some great examples of how Big Data impacts finances, and thereby business transformation.  Their examples also highlight the critical role of the accountant in enabling this transformation.

Jeremy from SAP HANA started off with the example of how demand-based pricing has been transformed from periodic (monthly or weekly) to real time.  Airlines and hotels historically are one of the more visible users of this technique as they adjust prices based on route load factors or hotel occupancy.  Disney relatively recently also adopted variable pricing based on the day of the week. Those examples show demand management for a fixed inventory.  Uber and Lyft, both ride-sharing start-ups, however take this to the next level with both supply and demand driving pricing and compensation to their drivers in real-time.  None of this would be possible without real-time access and analysis to operational data.

Jeremy also described how Pepsi correlates sales data with weather forecasts to predict demand for their products. They also use customer sales and returns data to validate the reasonableness of customer orders and determine if a customer may be under-ordering (missed opportunity for sales) or over-ordering (will would result in returns of product).

This leads to the concept of benchmarks, which Roman from GoodData said are a requirement to make key performance indicators (KPIs) useful.  He continued saying that all of this has to be about business transformation—not cost management.  He contends (and I agree) that there is limited value provided by focusing on cost management.  Rather analytics need to be focused on holistic business transformation to provide value.

Jim from Adaptive Insights, described the role of the accountant in all of this. The accountant need to determine how to take the abundance of data and determine what is meaningful.  If I tie in the presentations from day 1, then we could expand this role to also encompass ensuring that the data being used is high quality data and that it is used in a way to drive better decision-making.

Big Data Tools for Accountants

I’m sure you’re thinking, this all sounds great, but how do I actually do all this?  The good news is that there is a good breadth of tools that support this work.  Here is the February 2016 Gartner Magic Quadrant on Business Intelligence and Analytics Platforms:

gartnermq_biandanalytics_feb2016

Gartner Magic Quadrant for Business Intelligence & Analytic Platforms, Feb 2016

Source: https://powerbi.microsoft.com/en-us/blog/gartner-positions-microsoft-as-a-leader-in-bi-and-analytics-platforms/

From first glance, it looks like those are primarily for big business. However, at the conference Microsoft did a great demo of their Microsoft Power BI software which is available for $120/user/month.  Feel free to reach out to me if you need help figuring out which tool(s) would be right for your organization: donny@intraprise.us.

Learning the Analytics Mindset

However, as you’ve probably heard me say before, technology is just a tool. It’s people who provide the knowledge and context that enable the tool to provide value. That value is enabled by what EY describes as the “Analytics Mindset”.  They describe this as the ability to:

  • Ask the right questions
  • Extract, transform, and load (ETL) relevant data
  • Apply appropriate data analytics techniques
  • Interpret and share the results with stakeholders

EY also has a competency framework that describes this in more detail and they are collaborating with university faculty to bring this as an introductory class to students.  On day 1, KPMG also shared the Masters of Accounting with Data and Analytics program that they helped develop, so there is movement on this at both the bachelors and masters education levels.

I’ve been trying to get more sessions about these topics at the AICPA and state society conferences, with only limited success. The AICPA’s FP&A Conference is the only one that has a significant amount of content that is relevant to this. The next FP&A conference is on July 19-21, 2017 in Las Vegas, NV.

So if you’re an accountant wondering if you would be a good candidate for a Big Data job, do you have the skills above and can you drive business transformation? If not, now you know where to focus your professional development.

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