Accountants to rely more on big data in 2020
Technology such as data analytics, artificial intelligence, machine learning, blockchain and robotic process automation will be playing a greater role in the accounting profession this year, according to a recent report from the Institute of Management Accountants.
The report indicates that finance and accounting professionals are increasingly implementing big data in their business processes, and the pattern is likely to continue in the future. The IMA surveyed its members for the report and received 170 responses from CFOs and other management accountants. Many of the CFOs are predicting big changes for 2020 in their businesses.
“Four key elements must be present for organizations looking to become data-driven: data-savvy people, quality data, state-of-the-art tools and a supportive organizational culture,” according to the report.
Management accountants are embracing data science and analytics to improve performance at their companies, leveraging the technology to improve their organizations’ data governance and analysis capabilities. Accountants will need to continue to develop the necessary skills to keep pace with technology and act as strategic business partners at their organizations.
“One of the big takeaways was the number of companies deploying big data is expected to double in the near future, and the potential to improve organizational performance is very significant for those organizations,” said Raef Lawson, professor-in-residence and vice president of research and policy at the IMA. “The rate at which companies are deploying big data is even greater than some other hot technologies such as data visualization or robotics process automation, which isn’t to say they’re mutually exclusive. Companies using leading-edge analytics can have a significant advantage compared to their competitors. With the evolution of analytical tools, all organizations — regardless of size — need to start going down the analytics road in order to remain competitive.”
The report identifies some of the main considerations to help companies and their accountants successfully implement big data initiatives:
- Starting simple and small when first implementing big data projects;
- Expanding the sources of data used and exploring potential uses not only of data available internally, but also of data available externally;
- Getting information based on data in the hands of those who need it, on a real-time basis;
- Getting buy-in for big data and leading-edge analytics initiatives at both the executive and departmental levels;
- Developing strategies for the effective use of leading-edge analytic techniques and technologies; and
- Building strong data governance and quality infrastructure in order to ensure data integrity and quality.
“We see an opportunity for finance to go real time,” said Lawson. “For the finance function, employees need technologies such as blockchain and RPA. Big data is going to enable the finance function to improve its insights and become a true strategic advisor within the organization. It’s a challenging time for finance departments and organizations. It’s something that we’ve predicted for a long time, but now it’s here. Accounting professionals need to develop their skills in order to remain employable and a valued member of the finance team.”
The IMA is developing a Data Analytics and Visualization Foundational Certificate to help accountants stay relevant as technology changes at a rapid pace. Last year, the IMA also revamped its Management Accounting Competency Framework to include more technology and analytics skills. The group has also revised its Certified Management Accountant exam to add a technology and analytics section for CMA candidates.
“We’re identifying the skills that management accountants will need to succeed in their careers,” said Lawson. “We're providing resources for them to develop these skills with this new certificate program, and we’re testing for those skills on our updated CMA exam.”
Data visualization may become a necessary part of the job for many accountants, and the certificate program promises to provide more training in that area. “An important role of the management accountant is to serve as a bridge between the data scientists and management,” said Lawson. “It will likely fall to the accountant to convey the results of that analysis to management in a way that’s actionable. Data visualization skills are nowadays of increasing importance for management accountants.”