In my last article which I wrote about Developing Invisible capital : For Cost Accountants in Practice – PART 2 I discussed about process of practicing and developing the process for the same. I am continuing that series into the segment of use of technology in the profession of Cost Accounting and practicing which will create a competitive advantage for practicing . We all know that what we mean by big data analysis but as cost accountants we need to get a better hand regarding the subject. In my previous articles I have been discussing about use of technology to improve either cost accounting or the profession of practicing. Over here I will depict both the pictures. I will breaking the process into several articles so that it doesn’t get confusing at the same time you can adopt different angles of the Big Data Analysis in the profession.
Big data analysis helps cost management decision making to new heights. In this article I would focus more on linking the analytical part with the better cost management tools which would help the mid level and senior level professionals to develop better decision making. We often eliminate products which don’t find a significant market and hence the product reaches the end of the life cycle. This leads to a substantial loss of business and brand equity of an organization.
The extensive research and development cost associated with the product development also gets into toss and finally the company becomes desperate to prove its brand value to the end user through desperate moves of a new product launch. This is one of the most problems of every company across every economy. Big Data analysis helps to identify the drop of product sales and also saves the product from getting into the trap of ending life cycle very early. It has been found that life cycle of a product can be saved if proper metrics and analytical skills are being deployed. First we need to create set of questions based upon which the process of data analysis should travel.
· When the sales growth pricked up?
· What offerings were offered during the product launch?
· When those offerings and promotion schemes were withdrawn?
· What type of pattern regarding the season, age segment of consumer buying the product?
· Analyzes the process of promotion and the affect thereto.
Based on these when we develop the process of the data analysis we get many interesting facts figures regarding the product life cycles. The biggest advantage of BIG data analysis in these cases is that the concept of planned obsolescence, where products are intentionally designed with a short lifespan, will no longer benefit a company or its bottom line gets exposed. The organization process and foul plays of the competitor are exposed. Coming back to the story, big data analysis identifies the rationales with logical reasoning’s behind the product life cycle failures and raises above the assumption theories. Longevity of the product is the key focus and requirement of data analysis involvement in this process. Big data analysis can lead to creation of better target costing and better pricing of products increasing revenue for the organization. Improvement in supply chain management through deployment of big data analysis which would reduce the inventory cycle and also block the loopholes of abnormal loss can increase the efficiency of the raw material pricing which finally increases the better pricing of the product. Cost Accounting and Cost Accountants can create revolution in the efficiency of the organization through Big Data Analysis.
In our earlier case where we figured out the failure behind product life cycle coming to an quick end, the same could find out the target consumers for the product and combining big data analysis report for better raw material prices, the end product could be made more efficient in terms of pricing. This combination would lead to revival and efficient product life cycle.
Big data analysis is now going to be the next level for academic education and I find that schools and colleges should introduce compulsory courses on statistical analysis and other areas where the level of knowledge of the student and future executives are empowered for making and developing better decision and products and process. Cost Accountants should adopt Big Data Analysis in their practicing field since this will improvise the advisory business module and would create a competitive advantage of the same.
In my research I find that in many foreign universities like Harvard university one of the prestigious universities has already launched course in data science which last year attracted 400 students, from the schools of law, business, government, design, and medicine, as well from the College, the School of Engineering and Applied Sciences (SEAS), and even MIT. Further the Harvard School of Public Health (HSPH) will introduce a new master’s program in computational biology and quantitative genetics next year, likely a precursor to a Ph.D. program. In SEAS, there is talk of organizing a master’s in data science. This is place where I repeatedly discuss about learning and hence we need to learn the Big Data Analysis. We cost accountants needs to do some courses on statistical which would give us the edge for understanding the subject as well as get into the BIG DATA Analysis. We need to learn and adopt technological innovation and create break through cycles in profession as well as in practising. Big Data would create revolution to the profession of Cost Accounting if implemented. So dont be the late to catch on but be the first to strike the difference.
Global Macro Economic Researcher and Business Strategist
Master of Economics, MBA in International Business Management, ICWAI (Final)/CWM Final/Journalist