Become the Gatekeepers of Big Data

More financial professionals working in business are using Big Data in their decision-making process. And the explosion of data generated each day plays a huge role in how management accountants perform their day-to-day duties. Although there are many positive aspects of integrating new technology into our companies and using analytics to interpret data, there are also drawbacks. Here’s a breakdown of Big Data and how management accountants can become the gatekeepers of this information.

What Is Big Data?girl on phone - connect to customers
In 2013, IMA® and ACCA (Association of Chartered Certified Accountants) published a report titled “Big Data: Its Power and Perils,” which defines Big Data as “the vast amount of data continually collected through devices and technologies such as credit cards and customer loyalty cards, the Internet and social media and, increasingly, Wi-Fi sensors, and electronic tags.” Big Data can help improve company performance and productivity to increase company revenue and stakeholder trust. Management accountants use Big Data to identify risks in real time and to make valuable business decisions.

What Are the Trends?
Big Data is changing the landscape of business. Companies are going from using predictive analytics to prescriptive analytics – they’re collecting data from their customers’ cell phones and other mobile devices to analyze customer profitability. This allows companies to cross-sell and up-sell their products. Management accountants are charged with analyzing this data and distilling it into bite-sized chunks so that management, who might not be familiar with the analytics, can find it easier to digest. As gatekeepers of this information, the management accountant’s role will become increasingly important.

What Are Some of the Risks?
As the amount of data grows, so does the risk for hackers to steal information and other actors to commit fraud. Although more data might make it easier to make decisions, it also requires an increase in both physical and digital internal controls. Securing your physical data warehouse and controlling who has access to it will help deter wrongdoing. And because hackers are everywhere, cybersecurity should be top of mind for every company – large or small. As a result, improved tools and techniques are being developed daily.

In addition, not knowing how to analyze so much data can lead to erroneous conclusions and decisions. There’s also an opportunity cost of gathering, storing, and analyzing bigger data instead of making other core investments. In other words, picking the wrong tools and hiring the wrong people to use them will increase the likelihood of misallocation of resources.

What Are the Rewards?
On the flip side, there are many opportunities for company growth and market expansion because of Big Data. Like I mentioned previously, companies can harness a new market by emerging in the mobile market. Mobile devices can be accessed through Wi-Fi (or if the customer downloads the company’s app – another opportunity for expansion), which makes it easier to connect to your customers and advertise new products. In turn this improves analytics, and thus, you can learn how to better serve your customers, increase revenue, and develop targeted services to niche markets.

How Can We Protect Company Data?
When using Big Data, companies should always consider a data governance strategy, which will help mitigate risk. The strategy should cover the availability, usability, or utility of information and the integrity, quality, and security of information. Management accountants play a large role in protecting company information, systems, data centers, and more through effective controls and monitoring. After all, you are the gatekeepers of Big Data.

To become part of the conversation, visit the Technology Solutions & Practices (TS&P) Committee on LinkUp IMA: http://bit.ly/1SrwFHe.

Written by Linda Devonish-Mills, CMA, CPA, CAE

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Top Technology Trends for Management Accountants

There’s no doubt that technology plays a huge role in business today, including in accounting and finance. New technologies will always emerge, which can make it confusing for businesses to focus on the most relevant ones. Not all technology trends will necessarily apply to management accounting and finance; so it’s necessary to filter through and match solutions to your company’s unique needs.

IMA’s Technology Solutions & Practices (TS&P) Committee recently undertook some research and analysis to gather market literature and insight into a full slate of technology trends in an effort to filter through and find those most meaningful to management accountants. This short list of technology trends will serve as the basis for resources in order to understand these technologies and how they apply to management accountants.  Here are the trends identified by the committee for 2015-2016.

SEO optimization, programming process1.    Business Intelligence and Analytics
With mountains of both structured and unstructured Big Data growing daily, companies must glean meaning from the most relevant data to drive decision making. Powerful cloud-based tools exist to help companies perform advanced analytics (e.g., predictive and prescriptive analytics) to gain intelligence about the business and more insight into where it’s headed.


2.    Data Governance

A sound data governance strategy sets the foundation for a company to ensure its information assets are accessible, usable for analysis, and of the highest quality and reliability. If data can’t be used or trusted, it’s almost worthless to the company. Data governance strategies, which are now growing in practice, help companies define the proper controls and monitoring systems to ensure access, utility, and quality.

3.    Mobile Computing
As smartphones and tablets evolve, so will the environment they occupy. Your office will be virtual – wherever you can connect to the Internet. vector illustration of mobile optimization and analyticsSmartwatches and other wearable gadgets are also catching up in usability and allow for constant connectivity to your work space.

4.    Big Data
With the increase in mobile computing and growth of our digital footprint comes an increase in Big Data. You will need optimal analytics skills and tools to process such data efficiently and effectively to make appropriate business decisions.

5.    Cloud
Today, nearly 50% of U.S. businesses use the cloud. You may already use it in your day-to-day work, but companies that don’t currently use cloud technology will be left behind this year. There are many options to choose from to fit your company’s specific needs.

6.    Internet of Things
The “Internet of Things” (IoT) refers to the connection of more and more devices to the Internet, including household devices like thermostats and TVs and business tools like vehicle fleets. IoT generates both more Big Data (to be filtered through) and intelligence about the business, which helps bring greater efficiency and process improvement, among other benefits, to businesses.

7.    Cyber and Physical Security
The increase in cybercrime over the past few years has proved how important it is to protect your company’s data. Not only will you need to improve your risk assessment and management tools, but you’ll also need to properly secure your physical infrastructure.

8.    Smart Machines and Automation
This year will push smart machines ahead of the curve. With the ability to learn and adapt to their environment, there are no limits to what they can do. Companies should know how to use this ever-evolving artificial intelligence to their advantage.

Which trends are on your company’s radar? Have you had to make any changes to your systems or processes?

Written by Linda Devonish-Mills, CMA, CPA, CAE

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Change Management: Employee Transitions

Taking on a new system or initiative isn’t always an easy transition. Without employee buy-in, the project may risk not getting off the ground at all. But understanding the cycle of emotions that employees experience will help you craft a communication plan to ease the implementation process.

The Reason
Change is common in the business world, but that doesn’t mean employees embrace it with open arms. Implementing new systems and improved software help your business run smoothly, so why is there so much friction among employees during the implantation process?

For one, it’s a natural reaction to question the change – things work fine as they are, why do I need to learn something different? Another factor is an individual’s emotional intelligence and adaptability. Some people adapt more easily than others and are more welcoming of change. If you learn how to understand the emotional cycle of your employees, you’ll be able to break down the wall of resistance so that future implementations go smoother.

The Cycle
There are eight stages of the cycle (see Figure 1 from Managing Organizational Change in Operational Change Initiatives).

figure 1. change curve

The “curve” starts at normal production levels and dips as morale gets lower. Here’s a list of each of the stages explained:

Pre-Initiative: Employees are unaware of the changes and are used to the status quo.
Denial: Employees reject the change because they don’t believe it will happen based on past failures.
Anger, Pessimism, Despair: Employees experience negative emotions toward the project. They’re irritated about learning a new process that they didn’t request. In turn, their work productivity takes a downward turn.
Testing: Employee productivity improves when they get hands-on experience with the new system or software. They become more comfortable with the change.
Acceptance: Employees are finished training and accept their new roles.
Post-Initiative Success: Employees are fully trained and operate at a higher level than before the change occurred.

Communication is important in any company, but it’s especially key for successful change management.

The Plan
Once you understand the emotional cycle you can create a communication plan based on the pros and cons of human emotion. The plan allows you to assess each audience: how early do they have to be engaged, how often do they have to be engaged after the Pre-Initiative stage, and what medium to engage them in. (See Template 1 from Managing Organizational Change in Operational Change Initiatives for a guide.)

template 1. communication plan

In the beginning stages of the implementation, it’s important to have open and honest conversations with your team to ensure everyone understands the scope, timeline, and benefits of the project. Then you’ll be able to determine how often you need to communicate with each team member during the implementation.

How does your company deal with new implementations? Do you have a communication plan in place?

Written by Dr. Raef Lawson, CMA, CPA, CFP, CFA
Follow me on Twitter @RaefLawson

 

Related Articles:

Managing Organizational Change in Operational Change Initiatives – IMA
Change Management Best Practices Guide – Queensland Government

CFOs Must Tackle Technology in the New Year

CFOs and football players have a lot in common. They plan their route around competitors with strategic thinking, they evaluate their previous decisions for future success, and they’re continuously learning new techniques to stay ahead of the curve. The biggest “play” CFOs can make in the future is becoming sharp with new technological advances.

Big data, cyber security, cloud technology, digital service delivery, and even artificial intelligence and robotics are the linebackers in the room who are changing business strategies. Who would have thought 10 years ago that these trends would become part of the CFO’s role?

CFO Month

Because of the ever-evolving role of the CFO, and the fluctuating business landscape, IMA® and strategic partner ACCA (Association of Chartered Certified Accountants) have marked January as “CFO Month” with this year’s theme being technology.

IMA and ACCA are always thinking ahead. This means we realize the impact  technology has on how CFOs do business, and it’0s our joint goal to provide the most informative resources possible to aid them in their roles.Together we support CFOs and aspiring professionals as they step into broader, more strategic roles. In the year ahead, we could also see the rise of the chief financial and technology officer (CFTO) as an important member of an organization’s leadership team.

IMA and ACCA research reports, such as “Digital Darwinism: Thriving in the Face of Technology Change” and “Big Data: Its Power and Perils,” revealed technological trends that will affect business in the future. There’s a future of opportunity out there for businesses that embrace technology and harness the increasing amount of data available for decision making.

Organizations of all sizes can use technology and big data to gain a competitive advantage. CFOs are at the forefront of this exciting business transformation. Like any other business transformation, CFOs need to take a balanced approach that includes technology enablement for information delivery, risk management, internal controls, fraud/cyber security, and ethical concerns to help lead organizations successfully into the future.

While no one has a crystal ball to predict the future, we can confidently say that tomorrow’s finance profession will have a distinctly technological flavor to it. How do you think technology will affect how you do business in the year ahead?

Written by Jeff Thomson, CMA, CAE

Follow me on Twitter @ima_JeffThomson

Related articles:

Mobile Devices Expected to Take Over in the New Year

ACCA and IMA Mark CFO Month with a Tech Focus

CFOs Have Bigger Roles Than Ever Before — And They Like It That Way

Mining for Gold; Good Data for Good Business Decisions

Good Data for Good Business DecisionsI often hear people complain that they are “drowning in data but starving for information.” It’s a common problem for both businesses and individuals— and a topic I discussed with IMA® (Institute of Management Accountants) President and CEO Jeff Thomson in a recent interview.

In fact, according to technology research firm IDC, the amount of data in the world is said to double every two years! Defined as a collection of data sets so large and complex that it becomes difficult to process, Big Data presents challenges to organizations seeking to harness it.

You may be wondering how your organization can make the most of Big Data for effective business decisions. I recommend, instead, shifting the discussion from “Big Data” to “Big Value.” Several kinds of tools have been heralded as solutions for harnessing data to make faster, smarter decisions, but what are the differences, and how are they best used?

A Shift in the Conversation

As IMA’s executive-in-residence, I examine business trends and assist with research, and I’d like to offer some clarity on these tools. In the past, business intelligence (BI) software tools have been offered as the solution for leveraging Big Data, but an emerging term, business analytics (BA), is gaining popularity and causing some confusion.

Business intelligence answers basic questions. It summarizes historical data, typically in table reports and graphs, so that businesses can answer questions. But reports don’t simplify data or explain its value; they simply package up the data so it can be consumed.

Business analytics, on the other hand, creates questions. It produces new information. Finally, there’s the concept of predictive analytics, a subset of business analytics. It can display the possibility (and ideally the probability) of outcomes based on the assumptions of variables. In other words, predictive analytics leverages data to drive better and faster decisions, thereby improving an organization’s performance.

Making Sound Decisions

In business and in life, it’s important to use data to make well-informed decisions. There is always risk when decisions are made based on intuition, gut feel, or flawed and misleading data.

In business, it’s important to identify the decisions that matter most to your organization. By understanding the type of decision needed, it becomes easy to determine what type of analysis to use to reach your goal.

Business analytics is the next wave for organizations to successfully compete and make the best use of their resources and assets. The ultimate business strategy, in the long run, may be to foster analytical expertise among an organization’s staff.

What tips do you have to leverage good data in order to make sound decisions?

Cockins_author

 

Guest blogger Gary Cokins, CPIM, is president of Analytics-Based Performance Management LLC and IMA’s executive-in-residence.

 

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