Thankfully, the digital plugin came with major perks and catapulted the speed, accuracy and use of data to entirely new heights. To put this in perspective, 90% of the world’s data was actually created in the last two years alone. Our planet produces 2.5 quintillion bytes of data every single day! Google alone is operating at a rate of 40 thousand searches per second – that’s 3.5 billion searches per day. It is no wonder they call it BIG data.
Companies from all sectors and industries now see big data as an asset which holds the key to unlock performance optimization, improved efficiency, increased revenue and well: growth, growth, and more growth! For accounting and finance professionals, this could present a major opportunity to assume the role of business partner, provided they draw on their competencies in governing, analyzing and communicating data, according to Raef Lawson – Ph.D., CMA, CSCA, CPA, CFA, CAE, professor-in-residence and vice president of research and policy at IMA (Institute of Management Accountants).
Globally, the perceived importance of big data and analytics, and the drive for implementation of big data is being championed by senior management in nearly two-thirds of companies from across the world. In a report on “The Impact of Big data on Finance – Now and in the Future,” IMA found that companies that have implemented big data have already begun to reap the benefits. These organizations report significant improvement in performance, especially in the areas of performance measurement and strategy formulation.
But to what extent are companies exploiting the ability to analyze vastly larger, more complex data sets, you ask? The answer is to a fairly large extent, with much more soon to come. The IMA report also found that:
Exploiting big data will soon become standard business practice
Highly indicative of the perceived importance of Big Data is the fact that the percentage of companies exploiting Big Data is expected to double in the relatively near future. As with other technologies, the mining of big data is a work in progress for most organizations. Very few have completed implementation, but most have started and are on the road to gleaning additional important business insights from their data, and as such, are prioritizing the transition over the rollout of technologies such as voice recognition, automation and predictive modelling among others.
Big data is key for performance measurement
While big data can be used to positively impact processes throughout an organization, its potential impact is greatest when applied to performance measurement. With the significant challenges organizations face in objectively evaluating the performance of their employees, processes, machinery, and so forth, the main functions of deployment of Big Data are namely being directed towards (i) performance management, (ii) strategy formulation, (iii) research and development, (iv) order fulfillment and finally (v) product/service rationalization.
The journey of big data starts small
Consistent with the idea of starting simple and small when implementing big data projects, we find companies are more likely to use existing (in-house) data sources when starting their Big Data journey, although both existing and new data sources are being used. The majority of organizations understand the importance of using data from new and varied sources and consider both internal and external data when developing and executing their strategy.
With Big Data comes big responsibility
Establishing a data-driven organizational culture is not about purchasing leading-edge technology and then waiting to reap the harvest of Big Data and analytics. Before a Big Data strategy can be developed, it is essential to build strong data governance and quality infrastructure. The process needs to start with building the internal capacity to formulate, understand, and most importantly, to act on the insights Big Data brings to the surface – change that some companies are sometimes not willing to make. In the absence of such strategies, organizations can consider investment a waste of money! The report revealed that 53% of the organizations surveyed had indeed developed solid strategies around the use of Big Data with 80% of them already reporting improvement in performance. Yet for many companies, ensuring data integrity and quality is still a work in progress.
Even the smaller players are adopting Big Data strategies
The implementation of Big Data is taking place in firms of all sizes. Surprisingly however, small companies (less than 500 employees) are slightly more likely than larger firms to report having completely implemented big data initiatives; further affirming the ability of big data and advanced analytics to help them compete against larger organizations.
As accounting and finance professionals continue to lead their organizations into this new era of digital transformation, Big Data stands to be a means of leveraging interconnected real-time information to compliment, even inform, the decision-making process. The time to utilize the ability to analyze and connect data to make sense of the bigger picture is at the fingertips of the profession, literally. Improving data governance and analysis capabilities may very well be a ticket to the becoming a strategic business partner, if harnessed as such!