This month, I want to share information on data analytics and business intelligence, two topics that are emerging as critical in the world of internal controls. Ironically, they’ve always been available to us, but with all the advances in technology, we now have an abundance of tools at our fingertips, so usage is becoming more popular and the skillset is certainly in demand.
While these two techniques are often used interchangeably, they really are different processes. Business intelligence is the use of programs to analyze raw data often by way of analytics: mining data and then gathering it into a report that’s issued out via dashboard and/or management reports. Data analytics, on the other hand, focuses on algorithms used to mine the data. For example, in examining purchasing behaviors, data analytics will flag unusual activity for review – i.e., if a division often purchases traditional office supplies through Staples and then all of a sudden, they purchase living room furniture from Wayfair – that purchasing behavior will show up in algorithms designed to find variables in this behavior.
In the internal controls’ community, folks often share that while many tools exist, the skillset of using them is a must for the tools to be successful. For example, a person using data analytics and business intelligence tools must not only understand the depths of the programs and how they work, but what can be derived from these tools. To be successful, the user must demonstrate a strong sense of analytical skills with a combination of internal controls knowledge and be a critical thinker that truly understands the organization’s business activities. They must be able to collect, analyze, and assimilate data into useful reports that add relevancy and meaning to the organization’s behaviors.
I encourage our departments, leaders and managers to become more familiar with these management tools and ensure they’re used successfully in our units.