Written by guest columnist Mark Fenton-Jones
IBM estimates that the world creates 2.5 quintillion bytes of new data each day while global IT company CSC is forecasting a 4,300 per cent increase in annual data generation by 2020. Much of that will be produced through business activity.
Business owners, directors and senior management have a lot of data at their fingertips provided by different business units in their organisation including accounts payable, accounts receivable, manufacturing data, cost of goods sold, and assorted vendor records.
The challenge is to find meaningful patterns of opportunity in this sea of data. Leaders need clarity on where growth will come from and where to allocate enterprise capital. They can’t do this unless they get their hands on the right data. Most businesses appear to be struggling to turn growing volumes of data into valuable business insights. Two years ago, a joint American Institute of Certified Public Accountants (AICPA) and Chartered Institute of Management Accountants survey found that only 14 per cent of businesses were managing this dilemma positively.
But the outlook is improving as data analytics becomes better understood. In Australia, big data and analytics is considered one of the top three innovations for the next five years.
An example of using data analytics to provide such insights is William Buck’s audit team which uses data analytics as an audit tool for corporate governance purposes. By running the tool over volumes of routine data, it can test for fraudulent transactions to meet the audit requirements of a company’s board.
A recent study by a global recruitment firm to identify the attributes of a successful big data user noted that they think through the issue, consider the data that might be available and then analyse it to give just enough, and just the right amount, of information at just the right time to allow the business to act and secure a benefit. “There is little value in over-analysing data simply because it was there and analysis was possible,” the study warned.
According to IT research and advisory firm, Gartner, organisations typically have multiple goals for big data initiatives, such as enhancing the customer experience, streamlining existing processes, achieving more targeted marketing and reducing costs.
This year organisations are overwhelmingly targeting enhanced customer experience as the primary goal of big data projects (64 per cent). Process efficiency and more-targeted marketing are now tied at 47 per cent. As data breaches continue to make headlines, enhanced security capabilities reported the largest increase, from 15 per cent to 23 per cent.
Certainly more people are becoming alert to the pace and volume that data is being captured. According to Nick Heudecker, an analyst and the co-author of a recent Gartner survey, big data projects are increasingly originating from financial, marketing and other business unit leaders, who are pressuring chief information officers to collaborate with them to make sure the technology aligns with the company’s strategy.
“People are becoming aware of the value of data, not just in IT but overall,” says Mr Heudecker, “They’re creating data and using it as a competitive advantage.”
To find out more about how Data Mining could benefit your business please contact your local William Buck advisor.