In today’s VUCA (volatile, uncertain, complex and ambiguous) world driven by the Internet of Things, Robotics, Artificial Intelligence, Machine Learning, and BigData, you need a powerful solution to gain real-time insights to stay ahead of your business. So, which data analytics tools should you invest in and why?
By the time you read the last paragraph of this article, you will have information to make the right choice, save money by investing in the right audit and financial data analytics tool.
Who needs analytics?
Anyone with responsibilities for decision making. To be competitive, all staff at the manager level and above need data analytics to access real-time insights based on the actual data captured by the business on a day to day basis.
Take an example of the HR team,
like any other department, HR needs analytics to help test for data integrity in the payroll when preparing the payroll at the month-end.
HR must confirm whether payroll details say for the month of March 2019 matches with those of April 2019. In case of any variance, data analytics tools would easily point out the causes i.e. new staff in the payroll, salary increment or overtime pay, for which staff? HR can then check the personnel files to confirm whether changes were approved or not. Without analysis tools, you may process a payroll that has fraud and or errors that are difficult to detect with manual checks.
The Board of Directors, CEO, EXCO team, Head of Internal Audit, External Auditors, Heads of Departments – and anyone who makes decisions NEED data analytics capabilities so as to make decisions and prioritize informed by data and not hearsay or opinions.
Factors to consider when buying a software
There are five factors to consider when buying analytics software:
Implementation. How easy to implement the software? Is it available on-premise or in the cloud or both? What are your data hosting policies? Does your organization allow software as a service (saas) contracts? If the implementation will be on-premise, does the vendor have a local expert to set up the software from start to finish? Most of the time, high software costs are due to air ticket and accommodation to get the implementer to your company to effect setup?
Keep in mind that such an arrangement comes with hidden costs. In case of a small glitch after set up, your company may have to incur additional cost to transport the consultant again to look into the issue. Make sure that your Service Level Agreement (SLA) provides for a clause to the effect that in case of malfunction within the first 12 months of setup, the vendor shall incur the associated costs to fix the problem including but not limited to travel, accommodation and updates. This will save your organization costs whereby some vendors deliberately leave a backdoor so as to travel back at your cost!
When it comes to implementation, you need an expert IDEA, ACL or Teammate implementer to set up and get everything working. However, all these tools have defined functionalities for auditors which you can do. In case you have specific needs, such an off-the-shelf tool may not do it. And for that reason, Teammate which provides an Excel Add-in is better because most auditors are already comfortable with MS Excel interface.
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Cost. The off-the-shelf tools come with a big price tag. To get a single module you part with over US $12,000 minimum! That is massive. Many of these vendors charge per license! Imagine paying all that money only to get not more than 10 licenses. In addition, you pay annual subscription fees making long-term use cost very high. As you can see in Figure 1, some software vendors are difficult to use and have limited functionalities.
All analytics software is built on the visual basic for applications (VBA) programming language, which is a Microsoft applications native programming language used in MS Excel and other Office programs! What the other vendors do, is to fish, cook and serve already made food. However, in Excel, you have a powerful tool to do ANY analytics like what IDEA, ACL or Teammate can ever do. Only if you know how to use VBA and very advanced MS Excel. In fact, PowerBI is Microsoft’s response to such analytics tools by providing the common used analytical functions for average executives and users who need ready-made stuff.
In Figure 2, is the Add-in TeamMate Analytics sells to customers? Anyone who understands advanced MS Excel, may not find this add-in worth spending on since the new Microsoft PowerPivot delivers more advanced functionalities that could be available in Teammate analytics or any other analytics software!
As you can see in Figure 3, anyone with the latest version of MS Excel can enable Power Pivot, Power View to access advanced features of MS Excel. If you carefully study Figure 3, you notice “SummitBI Audit Tools” Add-in on the Excel menu ribbon. When you click on it, you gain access to any on-demand Audit tool any auditor would need including Benford analytics 1st digital, 2nd digit or 3rd digital analysis over any data set the size of more than 24 million records. The traditional weaknesses of Excel-like limited data set it could handle no longer applies in the recent versions. MS Excel can connect to any external database and perform real-time advanced analytics. In Figure 4, find market survey findings on each software.
The way forward
Carefully study Figure 5 to make an informed decision to which tool to invest in. As of writing this article, I find ACL governance, risk and compliance solution with comparable features as Teammate.
The advantage of Teammate is made use of MS Excel, which is already a readily available tool in most companies on all user computers and therefore easy to use.
For long term value delivery, I recommend you invest in training all your internal auditors in advanced MS Excel. Tired of annual fees and license restrictions? Contact one of our data scientists for a demo on how to make your own analytics functions in MS Excel and save money.
Which data analytics tool to buy?
When we talk about data analytics, the auditors and finance people come to mind. These are departments that need data analytics on a daily basis. However, as already explained, all staff need to embrace data analytics.
There are three common analytics tools that come to mind. These are (i) IDEA; (ii) ACL (Galvanize) and (iii) Teammate Analytics + Audit. IDEA – interactive data extraction and analysis owned by Caseware International Inc (CWI), domiciled in Toronto Canada; Audit Command Language (ACL), which was recently been acquired by Galvanize, a company also domiciled in Vancouver, Canada, and Teammate Analytics and audit tool, a company headquartered in Alphen aan den Rijn, the Netherlands. These three companies have dominated the data analytics space. With the acquisition of ACL by Galvanize, the company now provides additional services including auditing process management, fraud risk assessment, governance, compliance, and risk to compete directly with other players like IDEA and Teammate. However, while these data analytics tools are widely used, the reporting they do always ends up in MS Excel.
Another issue many an auditor have complained about is the fact that when conducting a continuous audit, by connecting to a real-time system, these applications require manual modeling, that is, they require one to relate each of the extracted tables together, which could be hundreds dependent on the complexity of the system. Yet, Advanced features of Microsoft Excel enable you to automate this process of extraction, transformation, and loading.
Bear in mind, the reason most companies have lost faith in using MS Excel is the myth that they have undergone “Advanced Excel Training”.
Though named “advanced”, such training tends to touch the low-level areas of MS Excel like formatting, filtering, formulas, and tables in disguise of providing “Advanced Excel Training”. This is by no way Advanced and has misled many a professional who prefers to invest big in off-shelf tools to suit their needs. Yet, with truly Advanced MS Excel Training, this should not worry about these professionals.
summitBI Advanced Excel Data Analytics Training gives you a comprehensive, practical, and advanced approach in utilizing MS Excel’s Advanced Business Intelligence features for Audit, Finance, HR, Operations, to mention but a few with real-life use cases.
Copyright Mustapha B Mugisa, 2019. All rights reserved