Oil is Out – Data Now Fuels the World
A recent Economist1 article likened data to oil, highlighting how – like oil – data is a power that dictates so much about how our modern world functions. And, as we frantically attempt new ways to access oil, we also tirelessly attempt ways to assert ownership over data in order to harness its power. And, like oil, data dictates so much about how the world works today.
To extend the comparison further, think of data as digital oil: the key resource that fuels businesses that are forever hungry for more and more of it in order to their power shiny new decision and analytics platforms.
All businesses are mining for it – albeit with complex algorithms and APIs rather than large scale rigs and drills. Desperately, all industries consume and attempt to manipulate data as it continues its all-powerful reign over business.
And, like extracting oil from deep beneath the Earth’s surface, getting high quality data is a dirty, messy business. It is not glamorous. It is expensive: you have to drill deep, sideways, circuitously. And, sometimes, you have to search for data in difficult, inaccessibly and hostile environments.
But – again like oil – once you’ve mined it, the possibilities are endless. There are so many amazing analytical tools in the market, and it seems like a new tool is emerging every week. The tools, however, are only as good as the data they can consume.
However, when you scratch below the surface of these impressive, complex tools to ask, “how are you actually getting data into these tools,” you find a mixture of surprisingly archaic practices. In far too many cases, it’s pure mandrolic re-keying of data from Excel or e-mailed PDFs. Or, at best, it’s the importation of a trial balance or limited connections to online packages. To continue the metaphor, this is like scooping up oil in a bucket from the ground where it naturally bubbles to the surface.
So, unless you have access to extensive, granular, accurate and reliable data, none of these shiny, impressive tools can meet their true potential and achieve what you thought you were purchasing them for. This is quite like owning a Ferrari that you have to push: it’s lovely and shiny on the outside; it looks very pretty and all the controls and buttons work, but you are only getting a fraction of the potential power the car can deliver. Ultimately, it’s not getting you as far as you hoped it would.
This matters because data is the most important virtual raw material of the 21st century. And in no area is this more true than in the accountancy world.
If the accountancy industry is to evolve to become future ready, it needs to significantly overhaul its cost model, how it interacts with its clients, and improve its value proposition to its customers. It needs to become a “gas guzzler,” an avid consumer of digital oil ready to fire up the Ferraris of data analytics.
The accountancy world needs to shift the balance from transactional non-value-added grunt work to providing clients with advice and insight that helps them run their business even better. To do this, accountancy firms need to do the following: terminate paper processes, rely on cloud solutions, streamline by converting to digital and automated workflows, create a common database and application for all client data, dedicate an IT staff to uncovering third party tools and strategic technology initiatives and shift to a single, consistent software solution.
Undoubtedly, many in the accountancy industry have started this journey of becoming future ready. To continue – and even speed up this process – accountancy practices must harness the power of data and seamless digital interaction across all touch points with clients. This means data and digital interaction should be at the heart of client onboarding, seamlessly integrated to workflow tools, powering analytics and sampling, and providing insights back to clients through a dedicated client facing presentation layer.
And the key to doing all of this is data standardization, the process of taking a raw product to a specialized refinery to produce a homogenized, smooth product that all can consume and use to power multiple applications.
Let’s take data out of the ground once and deploy it in multiple ways like we currently do with oil.
1 “Data Is Giving Rise to a New Economy.” The Economist, The Economist Newspaper, 6 May 2017, www.economist.com/news/briefing/21721634-how-it-shaping-up-data-giving-rise-new-economy.