In the rut of day-to-day issues and projects, it is easy to skim and dismiss the mass of headlines on the latest ‘possibilities’ of artificial intelligence (AI) and Internet of Things (IoT) – after all, we’re not there yet. But, if you look close, it’s already starting to take shape – and the foundation is being laid out right before our very eyes.
Exploiting the Data Explosion
The International Data Corporation (IDC) forecasted in a report that the amount of data being generated in the digital universe will grow to 44 zettabytes by 2020 (that’s 44 trillion gigabytes!). One can’t help but to marvel at the speed in which the big data adoption is already changing industry landscapes and operations. For the first time ever, you’re able to collect and analyze more data than ever before. But if you want to stay competitive as the data growth continues to explode, it will be imperative to derive maximum value from the data captured.
As CPAs and Bankers, we are slowly but surely changing the way we gather, analyze and provide data – moving away from traditional financial data reporting and the reliable spreadsheets, we are gathering more data from many sources and using technology to support assumptions, draw conclusions and are emerging with more and varied data for predictive financial and operational analytics.
3 Ways Big Data is Driving Business Decisions
The ability to extract broader types of data can ensure a business becomes more agile. Big data provides real-time information to enrich usability. Usability drives more meaningful business decisions.
Businesses who adopt a data management system are now able to govern big data and build solutions to:
- Improve return on investment through cost of production analysis (as well as understand changing market conditions) to determine profitability with smaller room for error.
- Improve efficiency through remote monitoring and analysis.
- Expand market analysis of current pricing and trends to determine optimization, and expansion strategies.
Sorting Through the Noise for Valuable Analysis
Audit is a great example of an area where AI is being used today. The amount of available data is improving speed, risk assurance, and meaningful insights for clients.
Historically, the only viable method for extensively testing vast quantities of data was to sample transactions statistically or non-statistically, avoiding the effort necessary to manually evaluate the entire dataset. This often required substantial back and forth time with the client to obtain the necessary information not obtained during fieldwork.
K·Coe Isom uses AI to provide unique insights and a holistic view of financial health for its clients across the nation. For example, we have used AI-based analysis for materiality limits and extracted medium and high-risk items to run samples on during our planning stage. This risk assessment identified two transactions that would not have been found under traditional testing conditions. The finding, although immaterial, was a value-added training opportunity that we were able to offer to the client.
Big data has taken the world by storm and is helping businesses conduct predictive analysis so that companies can overcome future challenges easily. Once you sort through the noise of the amount of data available through AI, its actionable information can have incredible impact on how quickly and easily you can analyze information to help make secure business decisions.