Big Data, Business Analytics
& Finance Professionals
The platform for effective finance transformation
A CPD event for CIMA & ICAP in Pakistan
Aubrey Joachim FCMA; CGMA CIMA Global President 09/10
My background
• Global work experience with major multi-national
corporations – UK & US and major Australian public utility • Past global President of the Chartered Institute of
Management Accountants (CIMA) UK
• Management trainer / Presenter across Australia, New Zealand, South East Asia, South Asia, Middle East, Africa, US and UK
• Specialise in Strategy, Performance Management, Risk Management, Big Data & Analytics
Key messages today
• Understanding and appreciating ‘Big Data’ • Exploring the concepts of business analytics • How finance can exploit big data and analytics • Finance transformation
Coming to grips with
BIG DATA
The proliferation of data in today’s world is a huge opportunity that
organisations must exploit.
The volumes of data accumulation on the planet is exponential!
The average large business has in excess of 200 terabytes of data.
1 terabyte = 1012 bytes
ie. 1 trillion bytes or 1000 gigabytes 80% of data is unstructured
However, most importantly …….
What should organisations do with big data?
Combine internal structured data with unstructured consumer, supplier data etc. to get a full picture.
Big data platform paired with sentiment and predictive analytics.
Co-relate customer inquiries and sales records with social media etc. to gain more relevant insights.
Business Data Big Data Large volumes of complex data Strategic; a core competence even a new Business Model Amex Experian Yahoo Improve performance; Cost & efficiency
Reduce Risk Increase revenues NI Ambulance BT Tesco Marriott
More Votes More clicks to sales Profitable growth
Marketing analytics:
Data from multiple customer touch points over time. Track where they come from, where they are going, keep them engaged. Generate quality leads, up-sell to them. Lower campaign costs.
Cost analytics:
Identify and track key cost drivers and how these can be optimised for products and customers.
Top line and bottom line benefits from exploiting big data
“Finance need to build
analytical capability to
succeed" “All functions needed to
increase analytical capability”
“Be clear on the questions
we’re trying to answer”
“Get basics in place, mine what
we already have”
What should shape an organisation’s big data strategy?
Data Analysis Insight Business Opportunities
Big Data….
Its just a way of doing business
Business Analytics
Lots of
data
No data
Decision
Analytics Judgement
The data dilemma ……… analytics the answer
Reading patterns from data …… searching for hidden meaning
FINANCIAL DATA PRODUCT DATA CUSTOMER DATA
$$$
The many sources of analytics
Given the abundance of data available to
organisations, the sources of data analytics are many. They could be classified under a number of specific areas: • Financial • Marketing • Customer • Supplier • Assets • Demographics FINANCIAL DATA PRODUCT DATA CUSTOMER DATA
$$$
From number crunching to
analytics
The outcome of business analytics
WISDOM
KNOWLEDGE
INFORMATION
The transition from data to wisdom WISDOM KNOWLEDGE INFORMATION
DATA
SYSTEMS & PROCESSES, TECHNOLOGY HUMAN LEARNING, TOOLS & TECHNIQUESWISDOM KNOWLEDGE INFORMATION
DATA
DATA CAPTURE & ANALYSIS MANAGEMENT REPORTING& DECISION MAKING The transition from data to wisdom
WISDOM KNOWLEDGE INFORMATION
DATA
APPLICATION OF MANAGEMENT ACCOUNTING AND ANALYTICALTOOLS & TECHNIQUES
The role of management accounting in analytics
Key questions addressed by analytics
PAST
What Happened? (Reporting) How / Why things happened (Modeling / Var)PRESENT
What is happening now (Alerts) Next Best Action? (Recommend)FUTURE
What will happen? (Extrapolation) Best / Worstthat can happen (Predict/Optimiz
/ stimulate
INFORM-ATION
Big Data & BA
The platform for finance
transformation
68% felt Finance should set the
agenda
88% believe Big Data and Analytics
will be a competitive advantage.
BI Strategy Business Case Implementation Data Quality Reporting Performance Management Analytics
Business partnering http://www.cgma.org/resources
Providing better understanding of financial results
Providing better predictive financial insight
Big Data
Business Intelligence
Financial Accounting
Financial Data Structured Data Unstructured Data
Financial reporting
Driver based forecasting
Predictive analytics
Financial modelling
Data mining
Intangibles are key to business value ‐ Data, often non financial, is needed to manage intangibles
A survey of 300 senior executives suggested that 68%
of the value of a business is due to non financial assets:
Source
-Application of analytics in financial management
• IT • Software • Digital space •Social media • Kaizen • 6 Sigma • Lean • BPI • Change Mgt
• Fin Management / Ratios
• ABC/ABM / Rolling Forecasts/ EVA / Costing / TOC
Finance professional today are moving out of their traditional finance roles and financial views alone and becoming analytical
What are business leaders expecting from their finance people?
Employers want accountants who can contribute more to decision making:
Use technical accounting skills In a business context to bring insight To influence people And lead the organisation
The role of management accountants in the context of BD & A:
Decision making is key to superior organisational performance
Analytics must improve business performance
Analytics in the age of transient advantage
Today many organisations find themselves as high-velocity industries, needing launch new initiatives again and again.
Speed in decision making is paramount. Fast and roughly right decision making must replace
deliberations that are slow but marginally more precise.
ANALYTICS
Analytics speeds up the decision making process
New skills and competencies for finance to deliver increased value
For finance to transform and add value to their organisations, they need to become business partners and develop:
• Excellent analytical skills using not just financial analysis but also customer and market analysis, statistical and also
sophisticated modelling techniques
• Use of multi-disciplinary team approach to inform key
decision making as well as the ability to integrate inputs from diverse non-financial sources
• Strong commercial acumen characterised by strong product, process and market knowledge
