ACCA Comment: Why big data matters for accountants

 
Sarah Hathaway
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New technologies are carving out novel career opportunities

THE BIG data revolution is fast becoming the gold rush of the twenty-first century, and everyone is eager to harness the opportunities it has brought with it. Reams of data are being produced every second from phones, credit cards, online interactions, infrastructure and tablets. The data produced in the last two years alone dwarfs all that was created over the last few decades. And with estimations that there will be 15bn devices connected across the internet by 2015, increasing to 40bn by 2020, the amount of data available is only set to rise dramatically.

It is not just the availability of data that is creating waves, however. It is also the fact that we now have the technology to utilise it. Companies that have been able to scrutinise and find patterns in data are quickly gaining a competitive advantage – and those firms that can turn data into meaningful information are those best set to succeed. The ability to link data sets is creating new insights. It has also given rise to data art: a visual representation that helps with “data storytelling”, it is able to combine sophisticated models developed by mathematicians and statisticians to use big data in a “visual language”.

ACCOUNTING FOR BIG DATA

The market for big data analytics is unsurprisingly growing rapidly, with forecasters expecting it to reach $23bn (£13.7bn) by 2016. The Association of Chartered Certified Accountants (ACCA) has been doing research into what this means for business and for the accountancy profession. The paradox of new technology is that it offers the chance to replace the value lost as it commoditises traditional skills. But managing big data requires the right people.

Advances in automation, such as self-service data retrieval, are freeing accountants and the finance function from the more routine aspects of internal reporting and compliance work – and creating opportunities for them to alter their profile in business radically. The fact that ACCA, one of the world’s largest accountancy bodies, employs a “futurist” to anticipate these dramatic changes is an illustration of how vital and relevant big data is and could be.

Trained to gather, analyse and benchmark information, and to use data in modelling and forecasting, accountants and finance professionals can provide a new and critical service: making big data smaller, “distilling” vast amounts of information into actionable insights. Responsible for the integrity of reports and accounts, they can help act as custodians of non-financial datasets, and set quality and ethical standards for the information used in making strategic decisions for third parties. This role will become increasingly important as more companies look for ways to develop new products and services from data they generate and own, particularly within the context of growing concerns around privacy and ethical data usage.

BUSINESS STRATEGY

Big data also offers the finance professional the possibility of moving further into a more strategic, proactive role in business. It is important, however, to understand the realities of what it means: the opportunities are matched by the difficulties. Those who equip themselves with the skills and form new collaborations will be the ones best placed to succeed.

The government has made encouraging decisions; ACCA supports the announcement by David Willetts MP of a further £14m to the Economic and Social Research Council’s big data network, as well as the government’s Budget announcement of the Turing Institute for Big Data and Algorithm Research. Despite the fiscal climate, the Turing Institute was endowed with £220m worth of funding, demonstrating the government’s commitment. The area is ripe for commercialisation by fast-growing SMEs, which Britain must be careful not to overlook. But we also urge the government to think carefully about the potential benefits in the public sector. Despite the notoriety of failed government IT projects and the recent delay in the NHS Care Data plan, using data could help to drive huge efficiency savings.

Deloitte estimates that the direct value of public sector information alone to the UK economy is around £1.8bn per year, with wider social and economic benefits bringing this up to around £6.8bn.

SKILL DEMANDS

But to realise the potential of big data, we will need the skills. Britain is set to have a shortfall of just over 10,000 accountants, which does not include the new roles accountants could fill – most notably that of chief data officer, a position which did not exist a few years ago. The global accountancy sector has been seeing greater technological responsibility for CFOs across the world. Their involvement in big data and other technology trends is critical to business growth and profit. As CFOs take on a more strategic and globally-focused outlook within business, technology will loom larger in their remit. We are already seeing the rise of the “techno finance chief”, with the emergence of the chief financial and technology officer (CFTO).

These issues cannot be considered in isolation: our career advice and education policy must be fit for the twenty-first century.

Responsibility for career advice returned to schools under the coalition, and we must ensure our young people have both the knowledge and the awareness to be armed for the career decisions they will need to make. Big data is changing the landscape of what future jobs will look like; professional bodies have an important role to play in helping schools understand what skills will be required for the jobs of the future.

The government must consider not only the implications of big data for business, but what it means for how we advise young people. Business will need new sets of skills, and while universities are tailoring their courses for this, we need to start earlier by advising our young people at school level, along with their parents, on what the future world of business will look like. We accept that it is not just for schools to determine what is necessary; professional bodies must play their part too.

As we consider the changing demands on our education system, many involved in education policy have begun to discuss how big data offers the potential to help tailor education. In the US, schools using computerised testing have begun to collect data with the aim of using it to note patterns and areas of best practice.

Tracking throughout a child’s lifetime could also help benefit those who perform better in the classroom than in exams. Data could also be analysed to help address the issue of social mobility (a notable problem in the UK); more information could help focus efforts to level the playing field. The organisation inBloom, a not-for-profit in the US, is keen to link education with technology companies, using data to spread best practice. Concerns around the use of such data must be addressed, but the next decade could lead to dramatic innovation in our education system.

Big data is certainly not without its risks, and business and government must work together to develop appropriate frameworks to secure data. If they do, there is huge potential across the spectrum. And to make the most of it, we must make sure we are equipped with the requisite skills, or big data risks being under-utilised.

Sarah Hathaway is head of ACCA UK.