According to a leading IT firm research nearly 90 percent of the data in the world has been produced in just the last two years. Though a bit of a buzz phrase these days, big data is as important as the internet itself to many businesses today, for a number of reasons. The simplest explanation of how big data benefits businesses is this: It provides the insights needed to make more confident decisions, take faster actions, improve operational efficiencies, minimize risks, and reduce spending.
The sudden emergence of the whole phenomenon around the data explosion has been the result of the pervasive use of mobile devices and the large volumes of data generated from web based purchases, mobile activities, and social media interactions. As the massive volume of data and computing platforms continues to proliferate, the absence of thorough reassessments and thinking around information processing paradigms of the past will leave today’s enterprises ill-prepared to deal with this new (IT) normal.
Enterprises have to realize the obvious fact that big data is an immensely powerful concept, and information is a strong business asset. Managing large volumes of homogenous data is something that organizations of all kinds can benefit from; spanning retail, social networking, science and research, clinical trials, CRM, operational activities, transactions and more. The real challenge for organizations today is to move beyond the data volumes and data storage obstacles to assess the true value of available data to reduce overall internal audit or compliance field work costs. The vast majority of enterprise businesses are faced with the challenge of decoding large volumes of homogenous, inconsistent, or inaccurate data — often referred to as “bad data.”
Industry analyst Doug Laney encapsulated the characteristics of big data using the three Vs — volume (the quantity of data), velocity (the rate at which data is generated and changed) and variety (the number of different data sources and types). Many are also adding characteristics such as “complexity,” “veracity” and “variability” to their understanding of the concept.
An accurate analysis of big data helps enterprises with better insights into their customers, market opportunities, growth prospects, and corporate performance. This strategic analysis of large volumes of data enables organizations to achieve higher-quality results in their own internal audit and compliance processes, thus enabling them to establish more effective governance, controls, and monitoring mechanisms.
With the skyrocketing number of transactions and evolving compliance requirements and regulations, big data analysis offers endless opportunities for enterprises to mitigate key governance, risk, and compliance issues. Just as big data analytics can lead to more targeted marketing initiatives by analyzing marketing program responses, supplier activities, customer demographics, and sales patterns, effective analysis of massive volumes of structured and unstructured data can also enable organizations in the Governance, Risk and Compliance (GRC) space to:
- Develop strong risk intelligence to strengthen risk management and streamline regulatory compliance
- Identify high-risk vendors/persons with multiple fraud risk indicators in accounts payable
- Display travel and entertainment expenses of local office employees
- Identify the best practices in the industry to effectively mitigate risks
- Determine if control procedures are working effectively
Big data analysis should become a core component of every organization’s operations, performed on a continuous basis, spanning areas such as payment or billing transactions, payroll, social media analysis, sales, operational processes, and compliance. For many organizations, especially in highly scrutinized and regulated industries such as healthcare, finance, and insurance, big data analysis can support Enterprise Risk Management (ERM) by helping monitor risks involving loans, claims, and patient care procedures.
Simply stated, integrating big data analytics into an organization’s GRC methodology will help pave the way for a truly data-driven organization.