CPA Practice Advisor

JUL 2018

Today's Technology for Tomorrow's Firm.

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JULY 2018 ■ www.CPAPracticeAdvisor.com 5 FROM THE TRENCHES WHY? Big Data can provide value for making business decisions. There are five characteristics of Big Data: ■ VOLUME: Big Data doesn't sample; it just observes and tracks what happens ■ VARIETY: Big Data draws from text, images, audio, video; plus it completes missing pieces through data fusion ■ VELOCITY: Big Data is often avail- able in real-time ■ VERACITY: The data quality of captured data can var y greatly, affecting the accurate analysis ■ VALUE: Technology and Analytical Methods for big data transformation as well as usefulness HOW? So how do Big Data approaches work ■ In 2000, Seisint Inc. (now LexisNexis Group) developed a C++-based distributed file-sharing framework for data storage and query ■ In 2004, Google published a paper on a similar architecture called MapReduce that uses a parallel processing model. – With MapReduce, queries are split and distributed across parallel nodes and processed in parallel (the Map step). – The results are then gathered and delivered (the Reduce step) ■ The MapReduce framework was adopted by an Apache open-source project named Hadoop in 2006 ■ Apache Spark was developed in 2012 in response to limitations in the MapReduce approach What does this mean to the practice of accounting and to accountants? We have several working examples available: ■ The video, audio, and textual information made available via Big Data can provide for improved managerial accounting, financial accounting, and financial reporting practices ■ In managerial accounting, Big Data will contribute to the development and evolution of effective management control systems and budgeting processes ■ In financial accounting, Big Data will improve the quality and relevance of accounting information, thereby enhancing transparency and stakeholder decision making ■ In reporting, Big Data can assist with the creation and refinement of accounting standards, helping to ensure that the accounting profession will continue to provide useful information as the dynamic, real-time, global economy evolves ■ In the press, C-SPAN is using Amazon's vision system to compile a database of politicians, so they can name them quickly when they appear on screen Cloud storage of data and large-scale data sets provide the source for processing with the software below. Small accounting software designers expected that the amount of data accumulated in QuickBooks Online, Xero and other products would provide enough data, that Big Data analytics could be run on the complete data set and provide insight to the small business owner or the accountant providing guidance to the business owner. As development continues and Big Data transitions from an emerging technology to a mainstream technology, vendors will choose from many open source and proprietary suites that have Big Data capabilities or they will develop their own algorithms inside their products. Examples of top trending products include (bold indicates that the product is on the top product list): ■ Talend Open Studio ■ Arcadia Data ■ Informatica PowerCenter Big Data Edition ■ GoodData ■ Actian Analytics Platform ■ Attivio Active Intelligence Engine ■ Google Bigdata ■ Wavefront ■ Opera Solutions Signal Hubs ■ Daatmeer ■ FICO Big Data Analyzer ■ IBM Big Data ■ Amazon Web Service ■ DataTorrent ■ Oracle Bigdata Analytics ■ Palintir Bigdata ■ Cloudera Enterprise Bigdata ■ Amdocs Insight ■ Splunk Bigdata Analytics ■ Syncsort The best example of tools for accounting that are working today is: ■ Distributed data processing using Hadoop, which is pretty much the standard for processing large data sets across distributed systems ■ Processing data streams using Spark or Flink, and then graduate to Beam ■ Machine learning using Google's TensorFlow ■ Big Data tool chain integration using Talend Open Studio ■ Data Lakes using Kylo Here's a summary of what you need to know about Big Data: Big Data capture and processing into meaningful information is still complex and needs to be simpler. RECOMMENDED NEXT STEPS Consider what would be meaningful information for your firm or your clients. Don't be too restricted by thinking about your current financial reporting or dashboard technologies. What would help you run your firm better? What information would provide insight to you so you could advice your clients better? Products will need to provide a way to satisfy this need. Big Data processing for small and medium business still needs some breakthrough products to make the technology practical and useful to smaller firms and businesses. The tools that are working are all for larger businesses with larger data sets with larger budgets. The emerging technology of Big Data has great promise, but right now is more smoke and mirrors than a sign showing us the way. ■ Key Information TECHNOLOGY: Big Data Why is the new technology better? Analyze extremely large data sets to reveal patterns, trends, and associations, especially relating to human behavior and interactions How can you do this today? Amazon, Cloudera, Dell, HP, IBM, MapR, Microsoft, Oracle, SAP, and Software AG Risks Expensive processing on bad data can lead to incorrect strategic conclusions Where/when to use To find trends in large amounts of data How much? Can be thousands to start, or free on open source When expected in mainstream? Three to five years Displaced technology or service Data Warehouse Other resources Accounting Today, CPA Practice Advisor

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