Embrace Big Data
LSCA Business Board member Peter Simmons explains why accountants must learn to love Big Data and their value in financial planning and analysis.
Businesses of all sizes generate a significant amount of non-financial unstructured information, such as GPS position data from mobile phones, temperatures from sensors, free-form text in questionnaires, website customer interactions, social media conversations and video from security cameras.
Previously, the focus had been on transactions (sales and operational indicators), but customers are becoming more demanding and the companies who can incorporate the non-financial data (NFD) will be able to offer a more tailored customer service and capture greater market share.
A decrease in customer visits to a company’s website compared to a previous period is a potential indicator of a future drop in sales. Analysis of Google Analytics reporting helps provide visibility into sales well before a sales transaction entry is recorded by the business or, indeed, lost to a competitor.
A further example from my previous employer is where I brought in NFD from customer satisfaction scores and freely available demographic data across regions in which we operated down to areas within cities. We cross-referenced with the financial data to determine if the climate, or other external factors, were contributing to the difference in sales rather than waiting for financial statements before taking action.
This information was then fed into regression models to predict levels of sales down to a specific store level which enabled us to target specific stores where more training should be provided to agents to drive sales and be more targeted with promotional spend.
In order for accountants to remain relevant in a world of automation and big data, the key will be to focus on the areas of the job that are more difficult rather than simply crunching the numbers. At the same time, it is vital that every accountant embraces the new realities and learns how to work alongside software tools, such as Adaptive Insights and Tableau, and intelligent algorithms. By working out how to work with, rather than compete against automation, accountants will most likely find a secure career path for the future and be a key business partner to decision makers.
Peter Simmons is member of the LSCA Business Board and Head of Financial Planning & Analysis for ADM Promotions, working with clients such as Diageo and AB InBev.
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