It is often said that data holds the reins of power, guiding organisations towards informed decision-making, unlocking unprecedented insights, and shaping the future of industries worldwide.
In today’s data-driven world, business leaders are constantly on the lookout for transformative strategies to gain a competitive edge. With the abundance of data available today, the fields of financial forecasting and forensic analytics have undergone a profound shift. They now offer deeper insights, more accurate predictions, and enhanced anomaly detection.
Adopting an analytical mindset – a means of approaching problems through data leverage, quantitative analysis, and analytical techniques – is not merely a desirable skill but a prerequisite in the current financial landscape.
We speak with Associate Professor Jiwei Wang, programme director of SMU’s School of Accountancy Master of Science in Accounting (Data & Analytics) (MSA) programme, on how these competencies bring clarity, wisdom, and precision to the table, allowing firms to optimise operations, predict market trends, and strategise for the future.
Using data to drive business transformation
To begin with, it is important for organisations to understand how they can effectively leverage data to empower their business. As Prof Wang explains, data can drive three types of transformation: processes improvement, product innovation, or even a complete overhaul of the business model.
By analysing data, organisations can gain the insights to identify trends, enabling them to identify areas for potential process enhancement. For example, this may involve streamlining procurement processes or automating routine tasks.
“Many companies typically start with process transformation, considering it’s the most straightforward,” says Prof Wang. However, the data can also lead to the second type of transformation, which revolves around product innovation. “This transformation is common in the apparel industry.”
“Traditionally, these organisations lacked real-time feedback mechanisms, but by leveraging data and tech, they can gather prompt customer insights, which can then be used to better design and deliver a product.”
Data can also be used to gain insights into customer preferences and behaviour, allowing a company to create personalised offers and recommendations.
The most challenging transformation of all entails using data to reshape the entire business model. A prime example is the transition made by traditional print newspapers like The Straits Times. Observing the growing trend of online readership, the publisher started to provide their services on a digital platform.
Highlighting the consequences of a company’s failure to adapt its business model, Prof Wang cites the example of Blockbuster, the American video rental store chain. Blockbuster couldn’t transition effectively from offline to online operations, while Netflix successfully entered the market with its new business model.
While Blockbuster’s decline is a multi-faceted tale, it comes down to a single crucial factor: key stakeholders, failing to discern evolving trends, underestimated the significance of building a strong digital presence. This oversight eventually led to Blockbuster’s bankruptcy.
Bridging the talent gap for data professionals
Given the clear link between leveraging data and making informed business decisions, it’s no wonder that businesses seek professionals who are able to glean insights from data through the use of different analytical techniques. However, Prof Wang notes that the pace of digital transformation among companies is not as rapid as expected.
“Some key challenges include resource limitation or a lack of a solid strategy. We have feedback from management level professionals that while they have the intention to transform, they lack the talent to do so,” Prof Wang explains.
Another notable challenge is the gap between the business and technology teams within organisations. “The trainings received by these professionals are very distinct, with few possessing interdisciplinary skills,” Prof Wang continues.
The future landscape of finance and data integration
As industries become increasingly data-centric, it has become a growing necessity for these departments to collaborate. To bridge this gap, SMU designed the MSA to educate professionals interested in developing expertise in applying data technology into their domain knowledge to solve business problems, especially in the finance and accounting sectors.
These professionals can serve as intermediaries, bridging the gap between two vastly different departments. In addition, their expertise in handling data can compensate for the talent shortages in companies who have the desire, but not the capability to transform.
As data continues to empower businesses, traditional finance functions will inevitably evolve due to companies’ increasing reliance on data and analytics.
Prof Wang sees the relationship as almost symbiotic – businesses transform by harnessing data, and this, in turn, gives finance professionals more opportunities to integrate finance into the business to take on an important role in the decision-making process.
Therefore, he encourages finance professionals to adopt an open mindset and embrace changes in data technology. “You cannot be reluctant to change,” he urges.
“You will have to do so, either voluntarily or, eventually, when it becomes mandatory. Start with the basics now, whether by attending short courses and self-learning online, or by progressing to more advanced options like formal degree programmes such as the SMU MSA, where you will receive comprehensive training.”
