Accountants Helping Companies Leverage Data Analytics
Contrary to the hype surrounding data analytics, relatively few organizations have fully embraced the technology, according to a report by the Institute of Management Accountants, though accountants can play a role in helping companies implement such programs.
The report found that only 8.5 percent of the organizations surveyed by the IMA a year ago have completely implemented their desired leading-edge analytic techniques and technologies. A 57.5 percent majority of the 170 organizations polled are in the process of working on it, while 23.4 percent are only just starting.
Many organizations strongly believe improving their analytical capabilities is key to their future success, either by helping them gain a competitive advantage (65.7 percent) or helping to maintain its current position in the market (17.2 percent). Still others were unsure, with 13.6 percent of the respondents indicating they’re still evaluating the costs and potential benefits, and others are more reluctant, with 3.5 percent of the respondents saying they’re comfortable with the way they are currently doing things.
Relatively few organizations have completed implementation of data analytics, though. Instead they see it as an evolving process or at least they have it on their radar. While approximately 6 percent of the survey respondents said they weren’t sure of their organizations’ implementation status, none of them indicated implementation of leading-edge analytic techniques was “not in our plans.”
Despite dire predictions that data analytics would eliminate many jobs in accounting and finance, most of the executives surveyed seem to believe that only a few processes have changed or are likely to change due to use of analytics. For more than half the survey respondents, the impact of Big Data and analytics on the relationship between accounting and finance and the rest of the organization has been relatively positive. In those organizations, finance is now perceived as more of a business partner or business leader than as a threat.
“What differentiates high-performing companies from others is the ability to make timely decisions to stay ahead of their competition in developing and executing a strategy,” said IMA vice president of research and policy Raef Lawson, who co-authored the report. “This lack of agility stems from taking too long to gather data and making data-driven decisions, both of which can be aided with fully-implemented analytic technologies.”
Mid-size organizations struggled the most when embracing big data and analytics, citing difficulty in strategic decision-making. Strategy formulation was the area most affected by greater use of analytics. Only 7 percent of companies overall in the survey indicated they are extremely agile at making strategic decisions, while 46 percent said they are OK at making such decisions.