Seven Keys to Cost Effective Business Intelligence: Part 2

You Don’t Have Big Data

In previous posts, I wrote about
how a financial data consultant differs from a regular data consultant and why it’s important not to oversell financial data projects.

In this post, I want to talk about big data. Because, contrary to what you might believe, you don’t have big data. Most financial executives work with regular data. As financial data consultants, we work with regular data. Even if you have $3 billion in sales and 100,000,000 transactions, it’s still regular data.

Let me explain how big data and regular data differ:

  1. Big data is unstructured. Regular data isn’t.

Let’s use an example. We often start projects with the general ledger. (For more on this topic, see Using the General Ledger as a Data Warehouse.) General ledger transactions have a standard structure. Every record has an accounting string, a posting date, and a currency amount (or maybe several). The consistency of this structure works perfectly with standard relational databases—tools that have been around (if evolving) since the 1980s. For our clients (and we’ve worked with companies with multiple billions in revenue), there’s no need for anything else.

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Seven Keys to Cost Effective Business Intelligence: Part 1

Don’t Oversell

Data is hot. So, as with any trend, folks begin thinking that data is the way to solve their problems. As financial data consultants, this is great.

But while we love the enthusiasm, we want to acknowledge that what we do is rarely transformative in itself. Don’t be oversold. As we like to say, having good data can keep you from being stupid. But being smart is a whole lot harder.

Here’s why:

1. Past performance is no guarantee of future results.

We hear that disclaimer in mutual fund ads. It’s a cliché, but it’s absolutely true. Things change. For example, in the early 90s, my family’s chain of men’s clothing stores had a mediocre year. Why? Because sweaters, which had been a leading category for years, stopped selling. This impacted the entire clothing industry. Consumer desire changed and suddenly everyone had too many sweaters on hand.

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There’s No Such Thing as a Data Consultant

Lately, I’ve been presenting on the topic “7 Keys to Cost Effective Financial Business Intelligence.” I’ll be covering this topic here in a series of blog posts too. But before I start, I want to use this post to discuss the title. What is “financial business intelligence” anyway? How does it differ from “regular” business intelligence? What do we mean at Red Three when we say our focus is data for finance and accounting?

To explain, let me start with a key belief (and something that has taken me years to acknowledge): There’s no such thing as a generic data consultant. Sure, it sounds cool to call yourself a data consultant, especially when “big data” regularly makes the front page of the newspaper. Suddenly, people who have no idea what you do, think they do know.

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Why Filling Out Your Time Sheet—Every Day—is Essential

No one likes filling out time sheets, and I’m no exception. But if I wait until the end of the week (or the end of the billing period), my notes are, shockingly, not readable. I’ve been getting better at filling out my time sheets every day, and I’m enforcing this practice with my people too. And I’m not doing it just to be annoying.

Part of my insistence on this task is because I’ve found that successful people always know where they’re at in a project. They spend a few minutes at the beginning and end of each day figuring out what tasks are open, what questions to ask, and what issues to raise. Because they go through this “awareness” process, adding up their time each day is easy. It’s part of their process.

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