There are two major trends in information technology that is impacting the accumulation and processing of data today, On one hand there is a huge volume of data being generated about customers, products, industry and marketplace, that includes financial and no-financial, quantitative, and qualitative, structures and unstructured and generated from various sources including OT sensor data, and social feeds and messages on Facebook, Twitter etc. On the other hand, computing power, software technology and application tools have improved significantly. Cloud based delivery models have also made the usage of information technology very economical.
With these data processing trends, the use of ‘big data’, including data analytics, has gained importance. From simple statistics and trend analysis, we now have more sophisticated applications of analytics such as in predictive analytics and prescriptive analytics and functionality based on AI and ML for decision making and usage in creating new or improved business models.
Key steps involved in adoption of analytics are:
- Determine the business use cases
- Build the road-map and data modeling
- Identify the analytics tools that match the business need
- Prepare data through extract, transform and load (ETL)
- Generate the visualization such as dashboards and reporting
- Incorporate decision making functionality and enhancements.
There are various analytics tools, each with strengths in visualization, ETL functionality, use of Machine learning, AI, mathematical modeling, etc. Some frequently used analytics vendor names at the enterprise level are Tableau, Microsoft Power BI, and SAP Analytics Cloud.
There is significant scope for use of analytics in the finance and accounting function (F&A). The CFO has an expanded role to play to ensure that financial reporting is effective and valuable for all stakeholders, internal and external to the organization. Analytics helps provide insights for strategic and operational decision making. Some examples of analytics in F&A are accounting analytics, finance process analytics, treasury analytics, corporate governance analytics and audit support analytics.