How (rather than ‘to what extent’) is the business world going to be impacted by big data?’ is the most relevant question accountants and finance professionals should ask themselves, claims a report released today by ACCA (the Association of Chartered Certified Accountants) and IMA® (the Institute of Management Accountants).
Big data: its power and perils demonstrates the potential for business of all sizes, governments and regulators in harnessing this wealth of unstructured information but the potential legal and ethical pitfalls are clear.
In a recent survey by ACCA and IMA 62% globally cited big data as hugely important to the future of business, potentially giving savvy businesses an edge on their competitors. The volume and variety of data able to be collected by businesses and governments is increasing at intense rate, providing a potential treasure trove of information. The ability to organise, make sense and analyse it is at the core of the substantial investments that corporations are making.
Faye Chua, ACCA head of future research, said: 'It’s not a matter of when big data will become important, it already is. Where the potential lies is in being able to analyse and put this information to use. Big data represents one of the biggest opportunities the finance profession has seen in recent times. Using their analytical skills, they will be able to provide senior management with real time updates on a wider set of variables which will place them at the heart of business strategy.
'We have talked for many years about the finance function being about more than just providing end-of-year reports and big data makes this a reality. Their ethical stewardship will also be vital, by combining their analytical skills and ethics they will finally become the cornerstone of business strategy and success.'
It’s not just the private-sector where big data will prove invaluable. Big data will make it easier for auditors and regulators to spot large scale fraud. Authorities are already using big data in their investigations.
Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research, said: 'While big data may provide huge opportunities for businesses, we must also bear in mind that privacy is high on the agenda of governments and individuals. We’ve seen high-profile protests about the amount of data that organisations are holding, and, in some cases, selling. It is vital that finance professionals steer their organisations carefully through this ethical and legal minefield.
'In order to use big data we will need to see a move away from working in silos and more cross- departmental cooperation. Data and more importantly, the results of data analysis, must be shared for the company to make informed, evidence based decisions and equally to manage future risks.'
The report acknowledges that accountants are neither software engineers or data scientists, but they could be in the future. Increasingly, accountants will help decide the financial content used in ‘data visualisation’ and company dashboards and how non-financial data should be overlaid on it. They will be required to help create a common visual language for data.
Faye Chua concluded: 'Big data will bring a change in focus for many finance professionals, the traditional roles of the chief financial officer, chief technology officer and chief information officer will be unrecognisable in the future. Their roles will be more strategic and forward looking. The speed at which they are able to embrace this change will have a huge impact on the ability of the business to make the most the potential offered by big data.'
In compiling the research, ACCA and IMA reviewed the existing information on big data, held roundtable discussion with leading finance professionals and conducted interviews with big data experts.
'Big data' and other ACCA and IMA reports are available through the ACCA and IMA joint website, roleofcfo.com, a resource for finance leaders and aspiring professionals.