In 2013, if you want to be seen as being “up-to-date” with the latest trends and “in-the-know,” all you have to do is mention two words - Big Data. A recent BBC documentary titled "The Age of Big Data" (April 2013) brought the point home very clearly for me. Suddenly, Big Data is big!
If you Google it, you will get millions of hits, with words like "unstructured data", "analytics", "in-memory processing", "Volume/Velocity/Variety", "insight", "social media", "innovation" popping up like meerkats in the desert. The Big Data space is buzzing, and it is saturated with analysts and IT vendors telling you why you need Big Data to remain competitive. The word on the street is: you need to be using Big Data or you will miss out on the next big wave. McKinsey has called it "the next frontier for innovation, competition and productivity.”
However, whilst this is causing excitement in the world of technology, Big Data is not on the radar of most business executives. Why? Maybe it is because the translation from the techno-babble to business value has not been made very clear. For many companies, the strategic value of data has already been recognized. Every day, masses of data (transactional, CRM, ERP, etc.) are being churned out and analysed using business intelligence tools to produce management reports and dashboards that are helping business leaders make decisions. So the question to ask is, what additional value does Big Data offer? Is it just more of the same? Is it a solution trying to find a problem?
According to Wikipedia, Big Data is "a collection of data sets so large and complex that it becomes difficult to process using on-hand database management tools or traditional data processing applications... The trend to larger data sets is due to the additional information derivable from analysis of a single large set of related data, as compared to separate smaller sets with the same total amount of data, allowing correlations to be found to 'spot business trends.' "
So put simply, Big Data is about combining disparate sets of data from both internal and external sources and analysing them to gain insight for the future outcomes. It is about asking "what will happen?”. Where business intelligence focused on understanding internal historical data (hindsight), Big Data appears to be about using data to predict the future (foresight).
The interesting thing about Big Data for me is not so much the data itself - it is the analytics and modeling that Big Data brings with it that may be of real value. Within an organisational context, it presents the opportunity to provide the business with foresight to drive success. This is where I see a potential space for the management accountant. The role of the management accountant is to be the business partner and provide insightful management information that drives the business. By gaining the skills to interpret the findings from Big Data, management accountants could be transformed into forward-looking drivers of the business, aligning the business with predictive outcomes and understanding where the business is going.
At CIMA, we are conducting some research into how the role of the management accountant will be shaped by Big Data analytics and whether management accountants are in a position to be at the forefront of turning data into insights and outcomes. Is this something that will impact on the role of management accountants? Or is it a fad that will be limited by the rhetoric and the true operational cost of the technology and the skills required?