According to a report by the Institute of Management Accountants (IMA), rapid developments in technologies such as data analytics, machine learning, artificial intelligence, robotics and blockchain will play a crucial role in the accounting profession in 2020 and beyond. The report further notes that accounting and finance professionals are now implementing these technologies in their business processes and this trend is likely to continue into the future. As per the IMA report, CFOs are predicting massive changes in their businesses this year and many of these changes are linked to the adoption of different technologies.
For many, however, implementing big data is more easily said than done. While this technology can be helpful to businesses, its implementation may not be as simple as some may think. IMA in its report notes that four key elements must be present for any company that seeks to implement big data. This includes quality data, supportive organizational culture, the right state-of-the-art tools and data-savvy employees.
Accountants are finding big data and analytics to be a crucial technology that will help them enhance their performance and that of their companies. Adopting these technologies improves data governance and organizations’ capability to analyze data. This means that accountants must always be up to date on technology and act as strategic business partners for their companies. The potential of big data and its application in accounting creates an immense opportunity for both accountants and other professionals such as auditors to sharpen their skills.
According to Gartner, about 2.5 exabytes of data are created each day and this amount doubles every 40 months. Out of this, companies such as Walmart collect approximately 2.5 petabytes of data per hour produced from customer transactions and uses it in making business decisions. One takeaway from this is that the number of companies deploying and using big data systems is expected to rise in the future and so is the potential for performance of organizations to improve as well. The rate at that accounting companies are adopting big data is much more significant than other technologies such as robotics, process automation or data visualization although they are not mutually exclusive.
Big data can help in supporting entities to appraise their data assets through the expansion of assessment techniques. Through this, accountants, auditors, and other finance professionals can determine data that is valuable, choose valuation technique, and single out key suppositions. It also gives these individuals data value through stewardship and control. The crucial takeaway here is that this technology allows organizations to turn their internal data sets into critical, secure and in-demand assets that can inform the decision-making process.
Using big data in decision making leads to more specific real-time support. It enhances the nature of services offered by the accounting professionals and also expands their roles from just reporting financial data to being part of decision making. Sharing of data will lead to created values as the movement of data both internally and externally will be improved by accounting professionals. This will save time and money while improving efficiency.
As big data continue becoming a critical part of the accounting profession, data visualization and big data knowledge, in general, will become a necessary part of the accounting job in the future. Having these skills will allow companies to bridge the gap between data scientists and management and will make the job of management accountants indispensable.