Cloud technology has made raw business data more accessible. Analysing this data – known as data analytics – helps you gain a better understanding of various aspects of an organisation that were once siloed in different sources. Accountants are increasingly recognising the value of using data analytics to discover trends, metrics, and insights. These can then be represented in pictorial or graphic formats through data visualisation, a way of communicating hindsight and insights to the organisation while supporting informed, data-driven decisions.

Data analytics and data visualisation are distinct concepts says, Lance Rubin CA, partner at The Outperformer. “Unlike with fish and chips – you can feel satisfied from one or the other or both – you cannot really get the benefit from data analytics without data visualisation.” 

What’s it all about?

Here are three key concepts:

Descriptive analytics: Summarises what has happened and what is currently happening in an organisation.

Predictive analytics: Uses data, machine learning and statistical algorithms to predict future results based on historical data.

Prescriptive analytics: Applies filters and sharp focus to answer specific questions precisely and accurately.

Is analytics for everyone?

Data analytics, which underpins data visualisation, can provide both big-picture and granular insights. “Visualisation with the right design and purpose can be used by any organisation to look at key business drivers,” Rubin says. For these techniques to be useful, an organisation must recognise the value it can unlock from the data.

Where does the data come from?

Rubin notes that raw data can be sourced from three interrelated areas:

• Internal accounting (Xero, QBO, MYOB, SAGE, etc)
• Internal operations (practice management, inventory, CRM, payroll, other operational workflow tools, such as WFM, SimPro, Unleashed, Deputy)
• External data (website traffic, social media, competition pricing data or relevant information such as exchange rates or even the weather).

Smaller businesses can connect their accounting platforms with affordable, cloud-based workflow solutions to access data from various areas of the business beyond basic accounts.

“The usefulness of the data analysed is notably improved by accessing and integrating the operational data,” says Cameron Lynch CA, founder of Etani Business Platform.

How should analytics be set up?

Analytics can be grouped into dimensions. Here are six key factors for organising data analytics and visualisation for excellence: 

1. User profiles and requirements: What are the user or customer needs? The starting point is a candid and complete understanding of current and anticipated stakeholder need - the client’s needs in order to influence and guide decision making and from a staff perspective, an exploration of what’s being done currently and why.
2. Data governance and quality: Maximising the value (accuracy, completeness, consistency) of data through analytics makes it an invaluable asset. Data quality should be addressed at the source, even if it means staff training or process redesign.
3. Demand management and prioritisation: Focus on clear priorities guided by business strategy and effective customer segmentation rather than responding to loud customer demands.
4. Solutions development: Collaborate to determine stakeholders needs and triggers.
5. Leadership and resourcing: Embed analytics and visualisation in the business strategy, organisational structure, and staff skills. This requires a commitment of time and energy.
6. Technology platform:Choose the right technology and infrastructure to maximising impact and effectiveness. The below features are good to keep in mind

• adopt software-as-a-service or a cloud-based platform
• define specifications before buying
• don’t get feature happy – focus on user profiles and needs
• aim for controlled self-service
• develop a mobile-first mindset.

What are the pitfalls?

“The biggest barriers companies face in extracting value from data and analytics are organisational" writes Nicolaus Henke et al in McKinsey Global, 2016. "Many struggle to incorporate data-driven insights into day-to-day business processes.” “Another challenge is attracting and retaining the right talent – not necessarily data scientists but business translators who combine data savvy with industry and functional expertise.”

Good visualisation requires quality client data, access to software APIs, and staff willing to share data. Some staff may need persuading that sharing data will free up time to act on insights, improving the overall value of the data.

How should visualisations be presented?

While analysing data may come naturally to number-loving accountants, data visualisations can unlock creativity. Visualisations are crucial for helping clients who may not be numerically minded understand the data.  Warwick Russell CA, co-founder of SMEtric Insights recommends keeping visualisations simple with easily distinguishable colours. For an excellent user experience, consider engaging a good graphic designer. 

Colours that reflect the client or business’s colour palette are also powerful, Rubin says. “For most business owners, simplicity is the key, so looking at the most important insights and how colours can be used to draw attention is helpful,” he says. “Of course, this takes a level of understanding of the business, their performance levers and the individual stakeholders reviewing the data in question.”  Explore creative ways to present and engage with data differently based on the situation, he says

What are the benefits of data visualisation?

Good data visualisation can go a long way. Here’s what three experts in the field say about its impact:

Professor Erik Brynjolfsson, MIT Sloan School of Management: “Companies in the top third of their industry that use data-driven decision-making were, on average, 5 per cent more productive and 6 per cent more profitable than their competitors.”

Lance Rubin, financial modelling expert, The Outperformer: “Decision-making is best served visually [to many non-financial leaders] and data visualisation is a key part of serving hindsight and insight in a way that is consumable to non-accountants or business owners.”

Warwick Russell, co-founder, SMEtric Insights: “You can see what’s happening at a glance so you can spend more time acting on the numbers than trying to find or interpret the numbers from Excel spreadsheets. Staff can be given different levels of access to relevant dashboards. They can see what they need to see, more easily understand it, and have greater confidence in making decisions.”