Session 10: Accounting, ‘big data’ and the virtual organization Flashcards
What is big data?
big data is larger, more complex data sets, especially from new data sources.
What is the common definition of big data from Gartner( 2001)?
Big data is data that contains greater variety arriving in increasing volumes and with ever-higher velocity.
What does ‘increasing volumes mean?
there is massive amounts of data generated daily. As of 2012 about 2.5 Exabyte( one billion gigabytes) of data are created each day, and its doubly every 40 months
What does ever high data velocity mean?
Data is transferred at very high speeds, thus it means real time information makes it possible for aa company to much more agile than its compeititors e.g. MIT media lab used location data from mobile phones to infer how much people were in Macy’s parking lots on Black friday.
What does It contains great variety?
Big data takes the form of messages, updates and images posted to social networks; readings from sensors; GPS signals from cell phones and more.
What are key advantages of big data 4 things?
1) Cost and time saving
2) Predictive - analysis of likely scenarios of what might happen - you can process unlimited range of variables, for more informed planning
3) Forster compeititve pricing- can easily measure impact of price changes
4) Data driven marketing
In finance where do you see most applications of big data?
Planning budgeting and Forecasting
Operational desicion making
Idenitfying compeititve trends
What are 2 well known companies that use Big data?
Netflix - understanding customer behaviour
Amazon - influencing consumer behaviour
How does Netflix use big data to understand customer behaviour?
Big data enables netflix to visualize data in order to understand customer preferences better,allowing them to tailor product range to customer specific requirements. They record which shows and movies customers watching.
How do Amazon use big data for influencing behaviour?
Using algorithms that see consumers previous purchases and make suggestions of products based upon past consumption.
We are going to look on how big data can impact accounting, what are 2 competing perspectives?
1) That big data is complementary to the acounting pratice and profession
2) Accounting as a threatened discpline.
How is big data a complementary to financial accounting
1) Address the inconsistencies between fair value accounting and help create a unified set of accounting standards.
2) big data movements allows for new possibilities to analyse financial statements and prevent fraud
3) Links geographically dispersed organizations - big data can collect real time organisation on performance of subsidiary.
How is big data a complementary to management accounting
1) Running complex accounting models - e.g. implementation of ABC, the ability to process and analyse comprehensive data sets is essentail in order to establish cause and effect relationship between cost driver and cost pool.
Why with the application of big data threating accounting?
1) calculating information - With the almost unlimited range of data this requires complex software systems to filter relevant info, not excel used by accountants
2) Presenting info - data mining software usually provide ready made platforms for generating and presenting information.
Does though Big data provide a new professional agenda?
Yes in:
1) Developing new metrics
2) learning new analytical skills
3) creating a visual language of data ‘art’
What does developing new metrics mean?
Accountants will need to develop metrics and standards for the valuation of internal data.
What does Learning new analytical skills mean?
Basically being able to analyse trends and go deeper, creating new career paths.
What does creating a visual language of data ‘art’ mean?
Here accountants use big data for storytelling, using statisiticial and analytical skills to unravel the meaning of data and communicate it to decision makers. They will create visual lanaguage of data.
What is the shifting role of management accountants?
What are 4 challenges of big data?
1) Algorithms
2) Ethics
3) Who is in control?
4) IT Security
What is the argument about algorthims?
“We don’t have better algorithms. We just have more data.” The problem is not so much to collect the data, but to establish criteria based upon which data is analysed and filtered. The use and maintenance of ‘big data’ analytics requires experts and substantial know-how
What is the argument about Ethics?
What is the responsibility of organizations to protect and respect
the privacy of people and the purpose of which the data is put to
use?
What the Who is in control argument against big data?
before they can use big data for analytics efforts, data scientists and analysts need to ensure that the information they are using is accurate, relevant and in the proper format for analysis. That slows the reporting process considerably, but if enterprises don’t address data quality issues, they may find that the insights generated by their analytics are worthless, which isn’t comfortable for employee — or even harmful if acted upon.
What are IT security risks against the idea of big data?
Cybersecurity risks: Storing big data, particularly sensitive data, can make companies a more attractive target for cyberattackers.
