CPAs are turning big data and predictive analytics into meaningful information

When big data is paired with predictive analytics and the financial expertise of accountants, it improves business performance. The future belongs to CPAs who become strategic partners and share insights that go beyond the numbers.

No matter what your industry is, the ability to take big data and pair it with predictive analytics is a growing trend. Businesses are eager to drive innovation and improve their bottom line with the help of more proactive, real-time information on performance, customer preferences and other trends.

FOCUSING ON THE INFORMATION THAT COUNTS

In its raw and unprocessed state, big data is low value. It is also vast, changeable and can lead to information overload, which is why identifying patterns is critical. What can be derived from big data is where we see great potential: the capacity to build analytical models that facilitate viable and profitable predictions.

How large amounts of unstructured information are refined can be divided into three different stages that build on one another:

  • descriptive analytics: What happened last time? (Historical reporting and accounting)
  • predictive analytics: What might happen next time? (Forecasting the probability of future events and outcomes)
  • prescriptive analytics: What should we do now? (Recommendations for a course of action to achieve more desirable results)

BUSINESS PRECISION AND COMPETITIVE ADVANTAGE

For professional accountants to really capitalize on the power of big data, they must embrace an integrated approach to technical expertise, financial analysis and communication skills. Each component is necessary for predictive models to effectively support business intelligence and strong decision-making.

After all, data is only as good as the people who use it. To produce meaningful information, organizations need CPAs who act as strategic partners capable of filtering out the “noise” – ones who can deliver traditional financial guidance, but also explain to executives the possibilities that new analytics create.

So what does this competitive advantage look like in practice? Using big data to harness the power of smart predictions and act with long-term gain in mind.

HOW CPAS ARE CLOSING THE GAP

According to Adam Haverson, CPA-CITP, CFA, CPAs are now leading the way with big data by integrating more predictive analytics into their work. In practice, that means moving out of the comfort zone as a trusted reporter and into a more strategic position as a partner that hones in on significant data to shape the higher level decision-making process.

This includes the ability to target customers and refine outreach tactics, identify what makes certain products or services more successful than others, estimate portfolio volatility, and recalibrate everything from reporting standards and marketing measures to operational budgets. Analytics can also be used to optimize corporations internally, i.e. capital spending, headcount and productivity.

BIG DATA AS AN OPPORTUNITY, NOT A THREAT

Altering the way companies approach predictive analytics is also making them re-examine the leadership capacity of CPAs as strategic partners who turn insights into action. This helps businesses succeed and reinforces the versatility and expertise that professional accountants are known for as well.

Chris Mazzei, chief analytics officer at EY, agrees: “Analytics is not a technology issue. It’s a strategy and operational issue. When data is managed as a strategic asset, it can change how organizations compete and win.”

CPAs who tie numbers to trends for clients and the C-suite will be recognized as powerful business players. When we think about big data as an opportunity, not a threat or risk, success follows – and those who embrace this anticipatory, proactive style stand to see a handsome return on their investment.

Learn more about how big data and predictive analytics can empower leadership, boost business performance and open new doors for CPAs at two of our upcoming professional development events this month:

Conference on IT Audit, Governance and Security
March 21-22, 2016 | Hyatt Regency Toronto
March 23, 2016 | Optional Workshop: COBIT 5 Training

Fundamentals of IT Audit Workshop
March 21-23, 2016 | Hyatt Regency Toronto
Register and earn up to 21 CPD hours

Highlights

Update your knowledge and strengthen your network at this must-attend conference covering the most important issues and trends affecting audit committee members.

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