From the rise of blockchain to the demise of Blockbuster, technology is disrupting every major industry. Accounting is going through a transformation that is shifting traditional roles. Industry professionals will need cutting-edge data analytics skills to thrive in this changing landscape.
Traditionally, data analytics have been associated with the technology industry. Today, all industries are driven by Big Data — these skills have universal application. According to a 2016 survey, 59 percent of employers say data science and analytics skills will be necessary for finance and accounting managers by 2020.
The challenge: accountants must think about data beyond its traditional form. According to a 2017 report from IBM Marketing Cloud, 90 percent of the world’s data was created in the last two years. The game changer is the rise of big data. These large and complex data sets are different from traditional data in terms of volume and variety. They can’t be analyzed with traditional tools such as spreadsheets.
Big data is measured in terabytes and zettabytes, which is beyond the processing power of a typical server. It’s unstructured, and it can come from a variety of sources including social media accounts, cell phone records, surveillance cameras, or even as information from devices like an Apple Watch or a Fitbit. It is collected in motion, at intervals as short as a fraction of a second, and it isn’t always complete, consistent, or accurate.
For businesses, formatted, verified, and secured big data is used to reveal patterns and trends related to human behavior. With analytics skills and tools, professionals can effectively analyze this data and gather insights that transform the way business decisions are made. This includes accountants, who now need a data analytics skill set so they can use big data to solve major problems.
According to an article in the Wall Street Journal, the Big 4 accounting firms’ combined global revenue from consulting and advisory services has risen 44 percent since 2012, compared with just three percent growth for auditing.
Success in this area requires a solid foundation in technical accounting knowledge, technology forward data analytics skills, and the ability to communicate insights garnered from data. Even as advisory services gain importance, it’s important to remember that big data impacts nearly every aspect of accounting, including audit, tax, and managerial accounting.
These factors pose a variety of challenges for today’s organizations. According to a PWC global data and analytics survey, 52 percent of senior executives said they have previously discounted data they didn’t understand, while 25 percent simply lack the skills or expertise to make greater use of data.
Brooke Elliott, Professor of Accountancy at the University of Illinois at Urbana-Champaign iMSA program on Coursera says that the online Master of Science in Accountancy (iMSA) program is at the forefront of addressing the impact of technology and data analytics on accounting. She stressed the importance of programming skills. “We teach our students how to program in Python,” says Prof. Elliott. “We see that as one of the next big tools.” “Right now, Excel skills may be considered table stakes but going forward, table stakes will be programming.
Industry leaders agree that the skills needed by incoming professionals are evolving. A 2018 white paper by Ernst & Young notes that they are increasingly leveraging emerging technologies including analytics. While accounting domain knowledge will always be critical, incoming professional will need enhanced technology skills.
“We expect them to possess leadership skills that include the curiosity to ask better questions and the emotional intelligence to better connect and communicate with clients,” states the paper. “We also expect them to have mindsets that allow them to analyze, innovate, think and act globally.”
The accountants will be data-driven decision makers and that is what we focus on producing at UI, says Prof. Elliott. This is particularly important for the iMSA program.
“We realize that there are extremely smart talented individuals who did not have an opportunity to build this core competency, and we provide that skill set,” she said.
For the 2017-18 academic year, the University of Illinois will offer a data analytics concentration at both the on-campus master’s program as well as the iMSA. A three-course sequence in data analytics will focus on skill building and, offers tools that are applicable across a variety of businesses.
Prof. Elliott recalls a recent visit with Grant Thornton’s advisory team, where she learned how heat maps are used to help detect fraud for insurance clients following a hurricane. This example shows how accountants are changing from bookkeepers to business partners.
We’re making a big investment in expanding the portfolio of courses for the working professionals we serve through the iMSA program, concluded Prof. Elliott. We want to ensure that our students are at the forefront of analytics and technology in terms of knowledge base and skill set.