Big Data = Big Opportunities
Did you see “Moneyball?” It was a fascinating look at how an underperforming professional baseball team used big data (player stats and figures) and computer-generated analytics to identify and hire high value players who were available at low salaries. To the surprise of everyone, it gave the once hapless team a decidedly competitive advantage on the playing field.
That’s the power of big data.
Today, big data is big news in the global marketplace, as organizations look for their own competitive advantages. Should we be surprised? Big data offers unlimited potential to change the way business is done, for almost any type of company. In a recent CGMA survey, almost nine out of 10 finance professionals agreed the revolution is not only coming, it’s already here.
Data is everywhere, and there are exponentially increasing amounts of it. Sources include machine-generated content, sensor data, the web, electronic documents, data storage, business apps, social media, and so much more. Big data can seemingly do almost anything—from helping farmers determine seed rates and crop yields to increase production to allowing manufacturers to forecast trends to control both inventory and future production. It can even assist cities as they prepare for future population needs such as transportation, policing and healthcare. Making use of big data is quickly becoming the norm. McKinsey & Company estimates that one sector—US healthcare—could save $300 billion annually, just by using big data to drive efficiency.
CIMA’s Tarisai Masamvu, in a recent post on the CGMA blog, notes, “from customer segmentation, risk modeling, 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.”
Big data has the power to impact companies both large and small, yet a survey of over 2,000 finance professionals conducted by CIMA and the AICPA found that 86% of organizations struggle to get useful insights from their data. That’s a discrepancy that must be overcome.
Therein lies an opportunity for finance professionals. Management accountants, already firmly planted in the world of business, can help translate data into beneficial commercial insights and fuel better decision making for the company. It will become critical for financial professionals to learn to work in partnership with their IT colleagues and business leaders. In a recent poll of CGMA designation holders, 85% agreed that having the skills to work with big data will improve their career prospects.
And there’s more good news: Big data will no doubt spawn new career opportunities. Management accountants have a unique opportunity to develop new skills (such as data analysis) and new ways of thinking to help re-define how business is done. “Finance people need to understand what the outcomes of analytics are and how they can drive value for the business,” say David Burgess and Gustavo Penas of Shell.
There are five key traits that will help ensure success for up-and-coming finance leaders. They are:
- Having the ability to identify which data points are actually useful;
- Knowing what customers want, and tracking this information;
- Realizing there will be new types and new sources of data;
- Understanding that big data doesn’t always provide definitive answers; and
- Finding visual ways to interpret data so it makes more sense to others.
What are your experiences with big data? Share your insights in the comments section below.
Arleen Thomas, CPA, CGMA, Senior Vice President - Management Accounting, American Institute of CPAs.
Photo credit: IMDb