Did you know this? The NYSE trade data for a day is almost a TB! Well if you think that’s big, FB accumulates 500+ TB a day! And if you think that’s big, a single jet engine collects 10 TB but in 30 minutes!
Be it Google Ads, LinkedIn or even roadside posters, you would have noticed the term. Well, What is Big Data? In simple terms, its just HUGE data being made available. Now, this data can be classified as Structured (Data in Fixed Format) and Unstructured data (Videos, images, conversation and not in a fixed format)
Accounting in Modern Times:
Technology and Automation have significantly changed the accounting environment for both the big Corporates and the mid to small firms alike, while the corporates have developed customized ERP packages.
The new dynamic technology of today, from Cloud Accounting tools (QB, Xero) to a whole marketplace of apps and tools to facilitate from Consolidation (Fathom, Spotlight) to expense tracking (Receipt bank, Verify), allows Small and Medium companies to utilize the same.
With all these developments, Accounting and Finance cannot merely be a report generating function or meeting the compliance requirements for a company. This needs to be a strategical function of the organization to guide/advise the management in the pursuit of its goals.
Is Big data a futuristic idea for the finance and accounting world?
Well, it is not! As we noticed above, the NYSE captures a Terabyte of data every day. This data is being applied for Algorithmic trading, even though being in place since 1976. The impacts are now visible more than ever as the Big data is now used for Machine Learning and with the development of Artificial intelligence. This facilitates thousands of trade, which a single person may not be able to do.
This is just a beginning as Big Data will help facilitate the audit at a transactional level and in real-time as we see this function develop. Many of the leading accounting firms have invested millions into projects. (Blockchain and the similar). Big data sets can allow accounting firms to aggregate performance metrics across an entire organization/industry/country and present them to the decision-maker, pointing out specific reasons the to gain the market edge rather than relying on outdated methods such as ratios or guesswork. And this timely intervention is what will make the finance function an inevitable strategical team.
Are you excited about what Big Data can bring to the table? Big data is not a single technology but a combination of old and new technologies. This would include tools on both hardware and software, which can be a sophisticated software or even a small application or even just an add-on.
It’s time that the accounting fraternity takes up the role of leaders to develop, train and integrate new technologies and move up the ladder from a support function to being a strategic advisor to the key management.
