Leveraging Data to Become Insight-Driven
The phrase “big data” is used so often it’s almost a cliché in today’s business world. There are a number of different big data definitions, and all are correct. The important element isn’t data categorization, but the recognition of all your organization’s data’s value—not just financial. How do you extract value from your data, and more importantly, how do you become an insight-driven organization, i.e., one that uses data and analysis to improve daily operations?
Data analytics is the answer. Simply stated, data analytics is a set of procedures and methods designed to extract useful information from data to answer a strategic question. Analytics can be applied in virtually every area of the business, e.g., marketing, accounting and compliance. However, successful implementation requires a solid framework to design and apply analytics. A common framework includes:
- A strategic question
- Definitions of the objectives to answer the question
- A plan to obtain the data necessary for analysis and follow-up
- Development and application of analytics procedures
- Results analysis
- Results management and implementation
By changing the strategic question, the framework is designed to allow analytics application in virtually any area of your business. These strategic questions can help get you started in applying analytics.
Where are my risks around compliance with anti-bribery and corruption laws?
It’s important to have a solid analytics program to proactively identify potential issues with anti-bribery and corruption laws. This includes detailed analytics around the general ledger, accounts payable, vendors and cash-related activities. Common procedures include keyword searching, email analytics, topic mapping and network relationship and financial ratio analysis. These procedures allow international organizations to increase effectiveness in testing for compliance with these regulations.
What leads to increased employee productivity?
Companies are more frequently equipping their employees with the necessary tools to improve productivity; however, many of those companies see little to no improvement. The tools used to improve productivity are typically designed to track data regarding usage, location, idle time and other key metrics. By segmenting employees by location, department and role, companies can begin to learn what leads to increased productivity on a granular level. This will allow companies to better equip employees in every company area with specific productivity improvement tools.
Where in my organization does fraud exist?
The fraud triangle theory holds that, for fraud to exist, an individual must be able to rationalize a perceived financial pressure and opportunity to commit. Organizations maintain an increasing amount of data regarding the three legs of the fraud triangle in the form of email communications, instant messages and communications via company devices. Further, transactional testing for indications of frauds can help organizations identify frauds early in their cycle. These principles may apply in accounts payable, corporate credit cards, payroll, general ledger and other areas of the accounting cycle.
The strategic questions posed above are designed to get you thinking about the potential applications of analytics, and they’re a starting point allowing you to begin the process of transforming your organization to being insight-driven.
One key to success in becoming insight-driven is incorporating data analytics into the organization’s culture. If data analytics is viewed as something performed in addition to existing operations, pushback is more likely to occur. However, when data analytics is viewed as integrated into the organization’s operations, it’s viewed through the lens of effectiveness and efficiency gains.
How will you integrate data analytics into your organization’s culture? You have the framework and some questions to get you started. Now it’s up to you to determine the highest priority area in your organization and begin the transformation to becoming insight-driven.
Contact your BKD advisor for more information.