Incorporating Data and Analytics into Corporate Strategy

Recent Gartner research provides some great guidance into the management of data and analytics for companies. It urges companies to go beyond simply declaring that data is an important asset and begin treating it like one. It points out that not only must data be specifically incorporated as an asset but the related competency of data analytics must also be recognized and developed within the enterprise.

In one of their reports on this topic, they make the following recommendations:

• “Express to executive leadership your intent to manage information as an actual asset, which requires you to measure it as if it is one.
• Enlist the support of your CFO to develop or adapt established information valuation models, first expressing an understanding that they are not balance sheet assets but that you intend to measure them as if they are.
• Audit, valuate and communicate the improved (or degraded) potential and actual value of key information assets. And do this periodically. Since information valuation standards do not yet exist, emphasize the change over time rather than the discrete metrics.
• Apply information valuations to influence culture, priorities, resources and investments in information-related initiatives — and not just those for information management, but also information deployment (such as analytics). And, of course, use these valuations to demonstrate your own performance and success.
• Experiment with an enterprise strategy for sharing your estimated financial valuations of your information portfolio with investors, partners and potential licensees.”

To obtain and read the report, “Predicts 2019: Data and Analytics Strategy”
published 26 November 2018, follow this link.

Data Lakes May Help With Big Data

Big data is a generally poorly defined term, despite it being one of the most common terms used these days. There is a general recognition that data is expanding rapidly in volume, and is being used for various purposes more often, thanks to the many tools available for using it.

Indeed, it’s become something of a mantra that data is a major asset of many a business.

This is even more compelling given the growth taking place in the Internet of Things, where virtually every physical asset/item/thing opened by a business is potentially connected to the internet and a source of reams of new data. The potential value of this data is not lost on management and stakeholders of companies.

And so this gives rise to several questions – Does the data need to be standardized? How does it get stored? By what tools is it best used?

Data lakes constitute one of the current favoured approaches to these questions.

Traditionally, data is stored in data warehouses, which require some standardization and structure. They are therefore limited in their capacity and therefore lacking in usefulness for big data, which comes in all kinds of forms (structured, semi structured, unstructured, etc.) from many sources (just about anything imaginable).

Data lakes accommodate just about any form of data and are tied into analytical tools, such as Hadoop, that can handle such data.

Like big data, data lakes are poorly defined but they fit well with big data. Data, big data, data lakes, Hadoop type tools, all form a critical new field for modern management. One that cannot be ignored.

ThinkTWENTY20 Newsletter, September – October, 2019

The Fall issue was released in September. Here are some of the highlights:
• Making Auditing Standards Fit-for-Purpose in a High-Tech World
By Gregory Shields, CPA
Auditing standards urgently need to change, both to reflect the significant use of technology in business and to promote the use of automated audit procedures, including data analytics.
• Enhancing Relevance: Shaping the Future of Corporate Reporting
By Alan Willis, FCPA, FCA
Financial statements alone cannot provide the information necessary for stakeholder assessment of enterprise performance.

• Data Privacy and Confidentiality An Ethical Primer for Professional Accountants in Business and Private Practice
By Eric E. Cohen, CPA
What impact might emerging accounting and audit technologies have on a practitioner’s ethical responsibilities for data confidentiality and privacy?

• How to Succeed in Business in a Disruptive World
By Gundi Jeffrey, Managing Editor, ThinkTWENTY20
There are ten major political, social, environmental and technological transformations that will have profound implications for Canada’s business community and those who serve it.

• Advanced Technologies in Financial Accounting
By Gerald Trites, FCA, FCPA, CISA
The Internet of Things is pervading the supply chains of business and creates a high volume of data

• Book Review of Meltdown - Why Our Systems Fail and What We Can Do About It, by Chris Clearfield and Andras Tilcsik (Penguin Books, 2019).
By Jonathan Andrews, CPA
Meltdown is both entertaining and instructive, particularly for those with an interest in risk and risk mitigation. 

NEWS ITEMS
The following news Items have been posted for the period August 15 – September 15
on www.ThinkTWENTY20.com – Your source for thoughtful news and blog items.
• Sept 27, 2019 - IASB Amends IFRS Standards in Response to the IBOR Reform
• Sept 27, 2019 - Tentative FASB Decisions
• Sept 19, 2019 - SEC Charges Silicon Valley-based Issuer With Misleading Disclosure Violations
• Sept 17, 2019 - FASB Proposes Guidance to Assist in Transition Away From Interbank Offered Rates to New Reference Rates
• Sept 17, 2019 - FASB Issues Revised Pproposal to Improve Balance Sheet Debt Classification
• Sept 12, 2019 - Statement on Status of the Consolidated Audit Trail
• Aug 29, 2019 - SEC Charges Brixmor Property Group Inc and Former Senior Executives With Accounting Fraud
• Aug 24, 2019 - Tentative FASB Decisions July 31, 2019
• Aug 24, 2019 - PCAOB Staff Provides Guidance for New Requirements on Auditing Estimates Auditor's Use of the Work of Specialists
• Aug 16, 2019 - SEC Proposes to Modernize Disclosures of Business Legal Proceedings and Risk Factors Under Regulation S-K

ERIC COHEN’S BLOG

Clarifying Auditor Coverage and Connecting for Context: Data Level Assurance
When XBRL was in its infancy, much of my attention was spent trying to improve the intersection between the auditor’s report and management’s financial statement.

Oh. the Places We’ll Go!
Dr. Seuss’s last book, on life’s journey and challenges, inspires the headline of this blog entry. As I last wrote on looking back on the twenty years since the FASB and IASC efforts to document the current state of Internet-based reporting and perhaps guess where the Internet might take corporate reporting, I also had time to think back on twenty years of XBRL.The Forum

THE FORUM

Look to Corporations for Action on Climate Change
A recent CEO Study on Sustainability, “The Decade to Deliver: A Call to Business Action”, conducted by the United Nations Global Compact and Accenture Strategy, involved obtaining the views of more than 1,000 top executives across 21 industries and 99 countries. The study shows some major change in the way corporate executives think about climate change and sustainability.- 27 September 2019

Disaster Recovery in the Age of Cloud and Edge Computing
Most companies are now running apps in the cloud and many are engaging in technology uses like Internet of Things (IoT), which calls for the installation of many computing services on the edge of the organization. The spreading out of computing services means that the IT department has less control and sometimes no control over the widespread resources in the organization. - 18 September 2019

Coming soon – Our Winter Issue