For many management accountants, the world of big data can seem as distant as Earth is from Mars (225 million kms, if I am being precise).
Finance professionals traditionally deal with highly structured and verifiable data. They produce periodic reports, analyse performance, and implement risk management and internal controls. Their role is to provide financial and non-financial information to the business to ensure that an organisation's management makes well-informed decisions. Big data, in its purest sense, is about extracting unknown insight from large amounts of structured and unstructured data.
This can often be seen as something that is quite removed from the day to day job of the management accountant.
Big data is changing the status quo
However, big data (the technology to store large amounts of data) and analytics (the algorithms through which value is extracted from the data), are changing the way business is done and the ways in which the organisation interacts with the data.
The era of the chief data officer
More and more, data is recognised as a valuable resource and is regarded as a key asset by most organisations especially in financial services, resulting in roles like the Chief Information Officer and Chief Data Officer appearing on boards of companies like Deutsche Bank, Capital One and Yahoo.
From customer segmentation, risk modelling, performance efficiency, fraud detection, through to sentiment analysis, big data is changing organisational processes and business leaders are keen to tap into this technology to ensure future growth and profitability.
Making the link to finance
For the forward looking financial professional, big data is an opportunity waiting to be seized.
As finance business partners, management accountants are well positioned to partner with business managers, IT professionals and data experts to mine the data for deeper insights to support value creation.
Their mix of accounting and analysis skills, together with an understanding of the business model means they have the opportunity to be more involved with the business strategy, offering guidance on how analytics can be used to predict profitable outcomes (customer profitability, internal and external factors).
As the size of enterprise data warehouses continues to grow, with data flowing in from other less traditional sources, like websites, social media, sensors, and networked devices etc, management accountants will need to get into make proactive strides towards the big data world.
Save the date – CGMA big data twitter chat
Join me at our next CGMA twitter chat, where we will discuss how finance professionals can harness the power of big data, and the skills management accountants bring.
Resources for management accountants
Readying business for the big data revolution - A CGMA report on the big data skills businesses and individuals need.
The Big Data Pathway - A practical list of ways to brush up your big data skills