This year’s joint Management Control Association and The European Network for Research in Organisational & Accounting Change doctoral colloquium and conference was held at the University of Roehampton. ICAEW’s charitable trusts help with funding and I was honoured to be asked to speak on advanced analytics. My focus was to get the researchers and teachers present to consider whether and how they should incorporate advanced analytics into their work.
When preparing my presentation a number of people asked ‘what the hell is advanced analytics?’ So I kicked off by defining analytics as the use of data to understand businesses and take decisions using computers and statistical models. No doubt there is a degree of hype associated with analytics. And why not just use the term analysis? At the end of the day though, if a different term encourages people to be more analytical and make better use of evidence, I argued we should just jump on the bandwagon.
Whether an approach is basic or advanced analytics is largely subjective. However, I set out some criteria to help people take a more objective view. For example, more advanced analytics tend to involve more variables and more complex patterns which in turn mean its more difficult to produce understandable visualisations. Also important is the degree to which a model automatically adapts as it receives new data i.e. the level of machine learning.
There is a case to be made for the accounting community not paying too much attention to advanced analytics. We could waste time, money and energy investing in an area which can be difficult to understand and may be more relevant to operations rather than management and strategy. Should we then just aim for raising awareness of what’s possible and some basic knowledge that enables to us to collaborate better with data scientists?
On the other hand, advanced analytics could provide a great opportunity for accounting practitioners and scholars. There is little doubt new technologies, such as the internet of things, are enabling us to measure things we could never measure before. Data on machine behaviours to human behaviours and on working conditions to the condition of the planet is increasingly available. Surely accountants, who’s main raison d'être is the provision of information to make better decisions, should embrace the opportunities and aim for a deeper involvement.
I would be interested in your comments. In particular: