Written by Steven Randall, Partner, Vonya Global
Big Data is all the rage these days. From research and development, supply chain management, mergers and acquisitions, global expansion, marketing and advertising, and even Risk Management, Big Data drives Big Decisions. Within the realm of Risk Management, Big Data allows for the opportunity for organizations to run sophisticated analytics to help identify and manage business risk events as they happen. My Partners and I have been proponents of using data analytics for the past 2 decades. An example is the following excerpt from one of our articles about Data Analytics from 2008.
Data analytics and Computer Assisted Auditing Techniques (CAATs) can be used to review every transaction processed by a company to identify anomalies. Applying data analytics to review transactions in accounts payable, advertising, freight, health benefits, construction, and other areas can yield hundreds of thousands or more in savings and recoveries, even for mid-sized firms. When data analytics and continuous auditing is transitioned to management from internal audit, errors are identified even earlier and with more precision. By incorporating CAATs with other audit tests on a repeating basis, operational improvements can be identified and recovered while controls assurance is being enhanced.”
The potential of data analytics has had Internal Audit executives buzzing for many years as the benefits are obvious. The use of data analytics should be universal… but it is not. Why not?
- In order for the data analytic software to run tests on data sets, it first needs the data sets to be accessible. Therein is the problem.
- The proliferation of information has resulted in data being stored in disparate systems, in disconnected databases, with inconsistent date field names, and in far flung locations.
- For data analytics to add value across the organization, the data needs to be consolidated in centralized locations.
- Consolidation is not an easy task. It requires identifying all of the corporate data stored around the world, recoding the data into consistent data fields, and centralizing the data. It becomes a task of enormous proportions.
Countless software providers and consulting firms will suggest a solution to the problem. However, the solution typically comes with a price that at this point exceeds the value. Organizations which already have migrated the data (or have had it centralized all along) are able to reap the considerable benefits of data analytics. Those organizations that haven’t, have a long journey ahead of them. And while many of those organizations have begun the migration process, they are still a long way from reaping any benefit.
This blog post was authored by Steven Randall. Steve is a Managing Partner with Vonya Global, a premier provider of internal audit co-sourcing, outsourcing, and consulting services; a member of the Institute of Internal Auditors (IIA) Chicago Chapter Board of Governors; a Director of the Adler-Caris Foundation, a not-for-profit dedicated to raising funds for Alzheimer’s Disease research; the President of the Oz Park Baseball Association, a not-for-profit organization dedicated to providing fundamental based baseball in a safe environment in the city of Chicago; and an Advisory Board Member of the Chicago Youth Baseball Initiative, a University of Illinois at Chicago community group dedicated to providing Chicago youth with the opportunity to play baseball in a fun and safe environment, while offering educational experiences on a world-class college campus. If you would like more information about Vonya Global or if you have a question for Steve, you may contact him through this blog, the company website, twitter, or his LinkedIn Profile.