CH 13: Data Analytics

The structured and unstructured data generated from a variety of sources in volumes too large for traditional technologies to capture, manage, and process in a timely manner

Big Data

Data that uses a known, predefined format, often organized in rows and columns with fixed fields, ready to be added to a database; such data is easy to manipulate and use

Structured Data

Data that exists in free form without definition

Unstructured Data

The art and science of analyzing data; it leverages raw data into important insights that help companies make decisions

Data analytics

Data that is verifiable and acquired from reliable sources

Hard Data

Data that includes qualitative inputs like the results of ratings or surveys

Soft Data

A building block requiring organization, context, and refinement to be useful

data

Processed data, with organization and structure, capable of being useful

Information

Data generated through a company’s existing internal processes

internal data

Data of interest and related to a company and its stakeholders that isn’t generated internally

external data

People or companies that accumulate consumer data from a variety of sources and sell it to companies, which then use it for marketing purposes

data brokers

Software used to coordinate and store interactions with past, present, and potential customers

Customer relationship management (CRM)

A comprehensive software solution to manage a company’s sources of data in a central repository.

Enterprise Resource Planning (ERP)

Complete ___ suites include performance measurement modules that enable a firm to plan, budget, predict , and report financial results

ERP

A unique label used to sort and match the same record in two different data sets

identifier

has jurisdiction over commercial entities to prevent unfair or deceptive trade practices

Federal Trade Commission Act

Retrieving, examining, and manipulating data to make it suitable for use

cleaning data

What are the 3 phases of cleaning data?

Rinse
Wash
Scrub

replaces obvious errors with a missing value label, or corrects them if that is easy to do

rinse

cleaning step that removes duplicate entries

wash

requires deep study, making corrections one at a time, by hand, potentially eliminating erroneous records, or making some fields as uncertain

scrub

What are the 5 steps leading from data to decisions?

Source Raw Data
Store
Retrieve and manipulate
Gain insight
Make decisions

What are the 4 categories of data analytics

Descriptive
Diagnostic
Predictive
Prescriptive

A type of analytics that describes what has already happened or what is currently happening and helps organizations detect patterns in data

descriptive analytics

Ex of ___ analytics: selling price trends of a single product across different regions in the US, the change in raw materials costs over the past 12 months, number of customer complaints

descriptive

A type of descriptive technique that presents data visually

data visualization

A popular means of gathering a variety of metrics for visual presentation.

dashboards

A type of analytics that attempts to make sense of (diagnose) the observations and/or patterns detected, such as tracing an increase in costs to a particular cause; focus on answering why questions

Diagnostic Analytics

Ex of ___ analytics: why was there an increase in DM cost this last year? Why did just one region of our business experience a decrease in profit?

diagnostic

A type of analytics that uses observations and patterns detected to predict future outcomes.

Predictive Analytics

Ex of ___ analytics: what is the expected production volume for next year? How would income vary if we hired a new manager?

predictive

___ analytics are constrained by:
Quality of Data Available
Degree of uncertainty around situation
Degree of statistical training needed to increase reliability of model
Potential errors and biases
Communicating models results to key decision makers

predictive

A data-mining technique that looks for cause-and-effect relationships in data

association rules

A type of analytics that involves understanding the outputs of predictive analysis and finding different ways to reach desired outcomes

prescriptive analytics

What are some specific prescriptive techniques?

Machine learning tools
Simulations
What if or sensitivity analysis

How does data analytics impact cost accounting?

Eliminate non value added activities
Supply chain management
Performance evaluation
Strategy formation

What are the top five skills for entry level accountants?

Understand the company you work for
Be curious and home your critical thinking skills
Be an effective communicator
Get comfortable with ambiguity/failure
Develop technical/data analytics skills

What are the steps for data analytics and decision making in order (5)

Source raw data
Store info
Retrieve and manipulate
Gain insights
Make decisions

What is the source of human resource data?

internal

What is the source of lenders and shareholder data?

external

What are the sources of customer service data?

internal

What is the source of industry reports?

external

Ex of ___ data: data sensors, customer calls/recordings, company emails, customer comments

unstructured

Ex of ___ data: Names and addresses, transaction data, current labor rate earned per employee, notes in personnel file, vendor locations, payment terms

structured