I enjoyed this article from Robert Kugel, and thoroughly agree with its premise: that big data and analytics can be leveraged to make better business decisions. The article discusses at length how to implement and use analytics, but Oversight has found that the key to improving business is to identify the types of decisions that can be supported with automated analysis.
As stated in Kugel’s article, there are two types of decisions you make with analysis, the strategic decisions, and the tactical ones. Strategic decisions utilize ad hoc analysis; these decisions are typically collaborative in nature, and a lot of people are involved in making them. As you can imagine, this type of decision-making doesn’t lend itself to automation.
Tactical decisions are those made on a recurring basis at the front lines of business. Tactical decisions are often centered around the questions you should be asking about your business. For example, questions around the accounts payable process, overall T&E spend, or how to combat fraud are all great questions that lead to tactical decisions. Typically, the recurring pattern of these known questions makes these processes automatable. Collaborative discussions lend themselves to question and answer sessions/analysis. Tactical decisions don’t really have a need for collaboration, and they can be made by one person and supported by technology and automation.
Kugel mentions in his article the many challenges associated with big data and deriving analytics from that data. Our Oversight Insights On Demand™ product can automate the analysis of T&E, P-Card and Procure-to-Pay spend, and is one example of an answer to this challenge. Because we curate the data, perform the analysis, and handle delivery ourselves, clients get the information they desire without the need for a data specialist. With IOD, our customers receive customized expertise, for a minimal amount of money.
Even if you have a technology solution to help with the automation of your data, what is the frequency and speed of the analysis? The speed needs to be in sync with the work process and cadence of the business. For example, if an accounts payable department in a particular organization makes payments on a daily basis, then analysis should be daily. However, for T&E spend, where expense reports are submitted on a weekly or monthly basis, the natural cadence is to perform analysis on monthly basis. Oversight recommends looking at it monthly, because it creates a shift in what you are looking for; there is less emphasis on individual expense report errors, and an increased visibility on problem travelers who repeatedly abuse the system. Approaching a problem traveler with twelve errors over a two-month period is more powerful than approaching individuals on an exception-by-exception basis.
In short, automated analysis delivered at an appropriate frequency is a great way to leverage big data to improve an organization’s finance process, because you are giving streamlined advice to those people making front line decisions. People make thousands of tactical decisions a day. What if someone were able to make just one smarter decision each day? Imagine the impact.