Week 1 - Data Analytics Flashcards
What is data analytics?
It is the process of evaluating data with the purpose of drawing conclusions to address business operations.
Why does data analytics matter to business?
- Can look into their customers buying patterns.
- Looking at the patterns in past archives can help businesses identify opportunities and risks and better plan for the future.
- It affects internal processes, improving productivity, utillisation and growth.
Why does data matter to accountants?
- Improved data accuracy
- Enhanced financial reporting
- Improved financial forecasting
- Streamlined accounting processes
- Better risk management
What are the 6 steps in the IMPACT cycle?
- Identify the questions
- Master the data
- Perform the test plan
- Address and refine results
- Communicate insights
- Track outcomes
What are the skills needed by accountants?
- Articulate business problems.
- Communicate with data scientists.
- Present results in an accessible manner.
- Draw appropriate conclusions and make recommendations.
How does data analytics affect management accounting?
- Enhanced decision making
- Better resource allocation
- Improved cost management
- Better budgeting and forecasting
- Improved performance management
Describe the data analytics process step 1, “identify the questions” in the IMPACT cycle
This step is where you understand the business problems that need to be addressed.
Describe the data analytics process step 2, “master the data” in the IMPACT cycle
This is where you become familiar with the data that’s available and see how it relates to the business problem that needs to be addressed.
Describe the data analytics process step 3, “perform the test plan” in the IMPACT cycle
Depending on the question, there’s 8 approaches to data analytics:
- Classification
- Clustering
- Regression
- Similarity matching
- Co-occurence grouping
- Profiling
- Link prediction
- Data reduction
What is classification (in regards to performing a test plan)?
Assign each unit/individual/observation from the available data into a few prescribed categories.
What is clustering (in regards to performing a test plan)?
Assign individuals into groups based on similar characteristics.
What is regression (in regards to performing a test plan)?
Predict a dependent variable based on a few independent variables using a statistical model.
What is similarity matching (in regards to performing a test plan)?
Identify similar observations based on known facts.
What is co-occurence grouping (in regards to performing a test plan)?
Discover associations between individuals.
What is profiling (in regards to performing a test plan)?
Understand typical behaviour.
What is link prediction (in regards to performing a test plan)?
Predict a relationship between data items.
What is data reduction (in regards to performing a test plan)?
Reduce the amount of information to focus on critical items.
Describe the data analytics process step 4, “address and refine results” in the IMPACT cycle
- Identify issues with the analyses and refine the model.
- Ask further questions.
- Explore the data.
- Rerun analyses.
Describe the data analytics process step 5, “communicate insights” in the IMPACT cycle
Communicate the analysis effectively using clear language and visualisations.
- Dashboards
- Static reports
- Summaries
Describe the data analytics process step 6, “track outcomes” in the IMPACT cycle
- Follow up on the results of the analysis. - Ask yourself the following questions:
How frequently should the analysis be performed, have the analytics changed. what are the trends?
What skills might be useful in performing data analytics in accounting?
- Business acumen (thinking in the context of the business)
- Communication (ability to communicate the data)
- Critical thinking
- Problem-solving (need to be able to figure out what else you can do if the analysis doesn’t answer the question)
- Time-management
- Attention to detail
- Data visualisation
