B. Technology In A Digital World Flashcards
What is an industrial revoultion?
rapid and major change in an economy, driven by a shift in the methods and types of work undertaken
What was the 1st Industrial Revolution?
- 18-19th centruy
- shift from rural to urban societies
- growth of steam power and machinery advancements transformed industries
- changed basis of economies
When and what was the 2nd Industrial Revolution?
- 1870s-1914
- from coal, steam, iron to electricity, petroleum and steel advancements
- growth in corporations
- globalisation
What was the 3rd Industrial Revolution?
- began in 1980s
- ‘Digital Revolution’
- move from mechanical to digital technology
- communications, computers and introduction of internet were key
What technologies resulted in the 4th Industrial Revolution?
cloud computing, big data, data analytics, process automation, AI, data visualisation, blockchain, IoT, mobile tech and 3D printing
What are the features of the 4th Industrial Revolution?
- fusion:cyber and physical systems will become autonomous
- employment:automation
- AI and ML:products customised
- machine led manufacturing:workers help machine not vv
- improved asset management:more efficiency
Points from BBC 2018 article about how owning cars will become obsolete
- self driving electric vehicles operated in Uber style network
- driverless tech will drive down fares as there is no driver
- electric vehicles are simpler and cheaper to operate
- tech continues to advance (Ec of Scale)
- English drivers have cars parked 95% of the time
- saves time and safer commutes as human error eliminated
What is cloud computing?
delivery of on-demand computing recourses over the internet: from applications to data centres
replaces trad method of locally based server
What are the two main types of cloud setups?
Public cloud-hosted by 3rd party company
Private cloud-IT service provides for own organisation
Amazon cloud computing
- 2018:broke 1T market value
- due to Amazon Web Services
- market leader in cloud computing
- third of market
- clients range from individuals to government agencies
What are some advantages of cloud computing?
flexibility and scalability cost efficient security:providers are specialists flexible working environmental benefits
What are some disadvantages of cloud computing?
organisational change
contract management
security, privacy and compliance
reliance on service
What is Big Data?
data sets so large and varied they are beyond the capability of traditional data-processing
What are the key features of Big Data?
4Vs Volume Velocity:speed data is fed Variety:formats Veracity:reliability
2 main forms of Big Data?
structured (feedback data) vs unstructured (liked, social media)
Where can you find Big Data?
Human-sourced data e.g social media, emails
Machine-generated data e.g smart tech, sensors
Processed data e.g in databases
Open data e.g publicly available data
What is data analytics?
collecting, organising and analysing big data to discover patterns and other information which could inform decisions
What are the 3 steps to data analytics?
Collection of data:int and ext sources
Organisation of data:organised and stored for future use
Analysis of data:find correlations/patterns
What has McKinsey stated are the benefits of effective data analytics?
Fresh insight and understanding Performance improvement Market segmentation and customisation Decision making Innovation Risk management
What is process automation?
technology enabled automation of complex business processes aimed at improving consistency, quality and speed whilst delivering cost savings
How is traditional process automation different from modern process automation?
simple repetitive task replaced to automation of complex business problems
automation is becoming smarter and can make decisions using reasoning language and learned behaviour
How has process automation been implemented in customer contact centres?
- voice recognition and AI
- calls answered robotically
- data capture and analytics used to monitor calls
- led to cost savings and service improvements
What is Artificial Intelligence? What is the Kaplan definition?
area of computer science that emphasises the creation of intelligent machines that work and react like human beings
Kaplan definition: system’s ability to correctly interpret external data, to learn from such data ad to use those learnings to achieve specific goals and tasks through flexible adaptation
What are some examples of advanced activities AI can now master?
voice recognition
planning
learning
problem solving
AI in business?
Apple and Amazon use voice recognition in existing products or developing products
Facebook uses AI to recommend friends
What is machine learning?
- subset of AI
- code mimics human thoughts
- uses data to calculate probability and learn from mistakes
- detects patterns to make predictions and recommendations
AI use in the game GO
- more advanced version of chess
- Google DeepMind played against world champion in 2016
- -Move 37 appeared bad but turned out to be game winning move
- computer built knowledge from previous games
- Lee Sedol found AI limitations to beat computer
What is data visualisation?
allows large volumes of complex data to be presented in a visually appealing and accessible way that facilitates understanding and use of underlying data
What is the most common use of data visualisation?
creating a dashboard to display the key performance indicators of a business in a live format
What 5 features should an effective data visualisation tool display?
decision making ability-results focused effective infrastructure-output reliant on quantity/quality of data integration capability prompt discovery of rules and insight real time collaboration
What is blockchain?
decentralised, distributed and public digital ledger used to record transactions across many computers
cannot be altered retroactively without all blocks being changes and consensus of network
BOE:allows people who do not know eachother to trust a shared record of events
Benefits of blockchain?
security from cyber crime
What are the key features of blockchain?
- number of participants record transactions via internet on publicly available ledger
- details recorded by everyone
- verification carried out by computers in decentralised network and discrepancies rejected
- new block added is linked to previous block using cryptographic hash which ensures chain is never broken and always recorded
What are the 6 stages of a blockchain transation?
- A transaction is requested
- A block is created as a digital representation of the transaction
- The block is sent to every node in the network (distributed ledger)
- The nodes validate the authenticity of the transaction
- The nodes receive a reward for the proof of work i.e some Bitcoin
- The completed authorised block is added to the chain
Describe the characteristics of cryptocurrency
Bitcoin (2009, Ethereum and Litecoin)
- no physical version
- peer-to-peer payment network made up of users’ accounts
- can acquire by exchanging money for bitcoin (most common) or bitcoin mining (solving problems generated by Bitcoin network)
- stored in encrypted wallet using password protection
- no need for central bank
- no pre-reqs or transaction limits
What is the internet of things?
network of smart devices with inbuilt software and connectivity to the internet allowing them to constantly monitor and exchange data
What devices are connected to the IoT?
anything with an on/off switch can become a smart device
common devices:
- smart meters
- doorbells and security
- wearable tech
- home appliances
- cars
- transport and infrastructure
- manufacturing equipment and plant
What is the growth in ‘smart tech’ fuelled by?
by improvements in broadband connectivity and development of 4G
How is smart tech used in farmng?
- monitor data on adverse effects
- allows forewarning
- preventative action taken resulting in better yields and cost saving
- Allflex use smart sensors in her animals
- monitor any problems so they can call vet or prevent infection
What is Code-division multiple access?
CDMA is tech that underpins mobile tech and has increased the capability of mobile technology
Which industries have been impacted by mobile technology?
- newspapers:physical sales down
- advertising:online ads
- music:streaming
- banking:mobile apps
- socialising: media and dating
- TV/Film:streaming and Youtube
What is 3-D printing?
additive manufacturing where object is created layer by layer
allows complex parts and components to be produced much cheaper, faster and in an entirely customisable manner
How does 3D printing work?
- blueprint made using modelling software
- printed using thermoplastic composite type material
- follows precise coordinated layer by layer
- can be used to build prototype parts of for bio-printing
What are the advantages of 3D printing?
speed-print and test same day and altered immediately
cost effectiveness-speed and labour cost
less waste-exact design printed more accurately
confidentiality- continuous prototyping and manufacturing in-house protecting IP
What are core modernisation tools used for? Give 2 examples
update existing systems and improve capabilities
mainstream
cloud tech & data visualisation
What are exponentials? Give 2 examples
deliver new capabilities
at early stage of adoption
blockchain and advanced analysis
How is modern tech changing the face of finance?
cloud computing revolutionising hardware and software Bs
variety and volume of data changed through data analytics and big data
info generated improved through data visualisation
What is one of the main drivers for 9-5 schedule becoming obsolete?
cloud computing
What changes has cloud computing driven?
collaboration-file sharing/version control minimised, multiple collaborators
flexible working- dont need to be present
increased security-specialists
up-to-date-software updates and GDPR compliant
easier integration-link with other cloud based software such as CRM
What is cloud computing’s effect on financial reporting?
shift from physical assets to digital
growth in the significance of intangibles which are not recorded on SOFP
difficult to determine underlying value of digital B
IP, staff skills could be undervalued
Cloud service impact on physical goods?
Streaming, AirBnB, ride sharing apps mean businesses utilise cloud computing tech in provision of their services
- absence of physical assets such as stock
- financial reporting is different to traditional bricks and mortar businesses
How has computerisation changed finance professional’s role?
evolved from bean counters to strategic value adding
What is business partnering?
mgmt accountants embedded within functions instead of central accounts
provide real time support on analysis and operational performance
data analytics and big data will increase business partnering significance
How does Big Data affect management accounting, financial accounting and reporting?
mgmt: more efficient and insightful management control systems and budgeting processes
financial: quality and relevance of accounting info thus enhancing transparency and stakeholder decision making
reporting: creation and improvement of accounting standards to ensure profession stays dynamic
How does Big Data affect internal audit?
- enhance quality and relevance of assignments
- change how internal controls are reviewed
- shift from sample-based to entire populations examined
- better identify fraud, anomalies or business risks and tailor approach
What are the benefits of process automation within finance?
cost savings-lower headcount value adding-resources freed up improved accuracy- human error omitted positive return-well managed process adaptability-can lead to process improvement exercise
What are the drawbacks of process automation within finance?
uncertainty-job security and prospects
relationship management-resources required to work it
competence-IT staff must understand needs
training
change management-managed carefully and led effectively
Process automation in intercompany balances at Johnson and Johnson
- wanted to make different systems across business more integrated and compatible
- project focused on simplifying inter company requests, recharges and postings:
- use of automated inbox
- used template to verify decisions
- omissions cause request to be rejected and flagged
- complete requests uploaded
- purchase order approved
- triggers next stage
- all relevant posting automatically made in both divisions with sales and receivable on one side and expenses/payables in the other division
process improved consistency, accuracy and timeliness of recharge process. No longer intercompany balance issues. Simpler reporting and increased detail with regards to workflow
Freed up finance staff time to focus on more value activities and improved understanding of core process
AI and forecasting in Salesforce
- Salesforce is a cloud based CRM system provider
- AI aids revenue forecasts
- omits human input which stops confirmation bias/emotion
- CIO insists data needs to be seen in day-to-day operations to aid understanding and buy-in process
- e.g introducing AI data driven approach in sales will be consistent and fact lead to leave out human inconsistency and enhance forecasting and improve AI learning that can be achieved
- done by system interrogating and attempting to understand the differenced between the forecasts and actuals
- AI will learn and become increasingly accurate
-process took time but CIO insists the improved forecasting has resulted in efficiencies
How will AI contribute to substantial improvements in accounting?
ML to code entries and improve on accuracy of rules based approach
improve fraud detection through sophisticated ML models of ‘normal’ activities and better prediction of fraudulent activities
predictive models to forecast revenues
improved analysis of unstructured data including contracts and emails
AI In Serious Fraud Office (SFO)
UK SFO invested in AI system called OpenText Axcelerate
- interrogates huge volumes of documents and find connections between individuals, words, phrases better than humans
- saved countless man hours
- identified more connections than average human worker
- handled more complex and opaque connections
- enhanced investigative power and effectiveness of fraud agency overall
What are the key benefits of data visualisation?
accessible-user friendly compares to spreadsheets/reports
real time-live updates
performance optimisation - better decision making and efficiency
insight and understanding - improved understanding and fresh insights
Data visualisations and KPIs
KPI=key performance indicator
-set of metrics used to monitor performance in critical business areas
- big data underpins the collection and analysis of this data
- data visualisation helps us understand it
- dashboards are increasingly used to display KPIs to staff in real time and flag areas needing improvement to hit targets
- if performance is falling below target levels the graphics will highlight this prompting action or reason
How does cryptocurrency work?
in a normal transaction:
bank checks ledger and authorises card transaction to retailer and charge a small fee for doing so
For cryptocurrencies, the bank is removed and blockchain technology is used to verify the transaction using the distributed ledger
with crypto:
authorisation is given by different independent ledgers on whether buyer has sufficient crypto, if they all agree then transaction is authorised. Otherwise attempt is flagged up. One ledger holder is randomly selected and awarded new crypto like a few.
DISTrIBUTED LEDGER removed central intermediary
Blockchain in financial reporting
- crypto accounting is a grey area on how it should be classified
- no accounting standards for this development
- should it be considered cash, intangible asset, financial instrument?
Blockchain and cross border payments
- these are complex, expensive and slow
- intermediaries charge fees
- blockchain driven solutions e.g RippleNet are growing in number and use
- aim to make money transfer like data transfer:easy, seamless and circumvent middle man
Blockchain and smart contracts
- self executing contracts using blockchain tech built upon crypto, digital signatures and secure computation
- assets exchanged in transparent manner
- doc is created and agreed upon then verified
- obligations cannot be tampered with without validation
Blockchain and security/traceability
- dist ledger means all network players hold copy
- cant amend single block or will become invalid and flagged up
- all blocks are marked and secure through cryptography
- has impact on how finance fns record transactions with third parties
What are some examples of how blockchain can enhance the accounting profession?
reduce costs of maintaining/reconciling ledgers
providing absolute certainty over ownership/history of assets
helping accountants gain clarity over available resources
freeing up resource to concentrate on value adding activities rather than record-keeping
Rolls Royce and internet of things
-manufacturer has embraced IoT and Big Data capabilities
engines manufactures with sensors built in throughout unit
- produce live data which feeds back to engineers
- anomalies flagged up immediately
- preventative maintenance schedules earlier than before
AI repaces human intervention over time as there is no room for error
new way of monitoring has facilitated design improvements for new models and led to new business model
- customers charged per hour use of engine
- package called total care that covers all maintenance and upkeep of engines
Efficiencies facilitated by mobile phone use in finance fn?
communication and flexibility-improved comm btwn staff
scalability-mobile and cloud tech overcome capital costs of setting up systems and IT
less paperwork-use of mobile tech has reduced duplication and data entry e.g expense system
instant data visiblity- assess and communicate key data through dashboards
Impact of 3-D printing on finance function?
largely from cost perspective
- less waste: no offcuts
- no overproduction:made to exact specification
- increase in direct costs :time spent setting up system
- minimal tooling and set up costs:smaller prod runs
- inventory:JIT printing
What is a digital mindset?
concept of seeing beyond the individual elements of digital change
understanding the deeper ways in which tech will transform every aspect of society and therefore impact organisations
extension of ‘helicopter view’ idea
5 qualities Forbes magazine identified as being important dimensions of the digital mindset?
provide vision yet empower others give up control yet 'architect' the choices sustain yet disrupt rely on data yet trust intuition be sceptical yet open-minded
What quality do staff of a change adept organisation need?
have a growth mindset:appetite to continuously develop and learn
Change as an opportunity or threat in Kodak
digital mindset=seeing the bigger picture
- Kodak developed first digital camera in 1975
- didnt pursue innovation
- lost core business of photo film and didnt benefit from digital photography
- entered saturated market
- filed for bankruptcy in 2012
Technology impacting Expenses in finance
- Certify/Rydoo: mobile expensing apps
- details extracted from receipt picture and categorised
- submitted for authorisation
- immediately reimbursed
- human input and authorisation
- rest is automated so time is saved
Skills required by future finance professionals?
analytical skills
business acumen-wide understanding
judgement-decision making, evaluating data sources
people skills-communication, empathy and understand people
leadership-position within organisation
What is the automation paradox?
- increased automation means humans lose skills on practical level
- humans may not be able to fill in gaps that machines can’t without these skills
- retaining expertise is a challenge for modern professionals
- e.g if maintaining ledger accounts is automated, accountant may not remember underpinning knowledge and can’t step in when it fails
What is GDPR and when was it introduced?
General Data Protection Regulation(2018) is a data protection legislation introduced throughout the EU and details the following principles:
- used fairly, lawfully and transparently
- used for specified, explicit purposes
- used in a way that is adequate, relevant and limited to only what is necessary
- accurate and, where required, kept up to date
- kept for no longer than is necessary
- handled in a way that ensures appropriate security
What do data controllers do?
ensure adequate safeguards and controls are in place within an org to implement GDPR principles
Why was the last GDPR edit 1995?
internet was in its infancy, social media didn’t exist
2018 data use required new laws
What happened between Facebook and Cambridge Analytica?
- Fb faces £500k fine for role in CA scandal
- this was max fine under GDPR law at the time
- FB breached legislation by allowing 3rd party developers access to user data without consent
CA scandal:
- app used personality quizzes to collect data of 87m FB users data
- CA bought this data
- used data to profile voters in US election based on personality and psychology and then targeted ads
- around 1m UK used affected by scandal
What is ethics?
system of moral principles that affect how people make decisions
Why are ethical and social considerations important?
investor confidence
customer confidence in data security is vital
consumers feel safer
attracts employees
long term sustainability
proactiveness & risk awareness displayed
What are some of Microsoft’s AI ethical principles?
-laid down voluntary set of principles surrounding AI use
Principles:
- fairness
- reliability & safety
- privacy &security
- inclusiveness
- transparency
- accountability
What is CDR?
Corporate Digital Responsibility is a new concept that extends CSR ethos to digital world
- voluntary commitment to protecting customers and employees
- considers broader ethical issues
- ensures tech and data re used proactively and wisely
Which 5 key areas does CDR strategy include?
- digital stewardship:using data responsibly
- customer expectations:transparency, opt in and out
- giving back:help society by sharing data e.g medical data
- data value:reward/incentivise customers to give data
- digital inclusion:ensure members of society have necessary skills
