Data – Deluge and Decisions | Episode 7 | An interview with Douglas Flint

Like many other professions, there’s little doubt that accountancy is undergoing a transformation Not only in terms of expectations, but also importantly in potential Reporter Nick Wallace caught up with a man who is no stranger to change the recently retired chairman of HSBC Douglas Flint to find out his views on where accountancy is heading. I think maybe if you told us about your experience of being an accountant and a management accountant And how it’s changed over the years what your understanding of it has changed, and how you’ve seen the business change in your career How have you seen that change happen? Well, I started my career in on the professional side in one of the accounting firms and I joined HSBC and 95 As the finance director so effectively getting much more involved in management accounting A number of things have changed, I think people are looking for much more insight as opposed to simple factual reporting And I think the quantity and quality of data that we’ve now got to work with Is considerably better and our ability to analyze it and manipulate it It’s considerably enhanced through technology then ever was. So we’re able to do more with the raw information What sort of skills to the people in that side of the business now need to develop? And how the how should businesses be developing them? I think the most important the two most important skills That I think people need is they need they need an understanding of strategy because again Otherwise the information that they produce, and how they presented is it is very shallow in terms of its depth I think they also need to be good communicators It’s not a question of saying well the number is this. It’s the number is this and what does it mean and what do we do with it? And how can I help you interpret it? and if you give me some guidance as to What other things you would like to do? I can find ways of giving you numbers that will help you make that decision You need to understand the strategy and you need to be able to communicate and have that dialogue with the Decision-makers as to what kind of information would help me make the decisions that are relevant to my job We’ve talked a lot around the data And you’ve mentioned how much data is being produced nowadays because because so many ways of measuring Different parts of the market and the information that’s flowing in all the time can be overwhelming so I guess the Analytical skills and the ability to synthesize data And then present To people outside of the captaincy, function is again crucial When you’re looking for insights, you’re not seeing what is the data? That’s relatively mechanical. Now what you’re saying is what is the data Tell us, and I think technology is and the cusp of giving us much more much much more Assistance in doing that in the sense that what artificial intelligence and this machine learning can do? is take an almost unquantifiable amount of data Uncorrelated or not disorganized and say in this huge amount of data here the correlations that can be seen by Analyzing the data so we may think that this particular way of marketing a product is working, but actually, the data tells us That it’s much more correlated to something else so rather than have a proposition to improve it. What technology can know do see these are the correlations Now you go away to see what’s driving and is very very exciting. I can understand how this works with huge global corporations Can the model shrink right down to the very smallest business? Absolutely and I think you know accountancy in a way Is one of these words that sort of stops any dinner party conversation; whereas data management is sort of New and sexy and an accounting is really just you know a really Focused part of data management and I think data analytics data management Data integrity is fundamental to business and people are beginning to see many many more possibilities for the management of data of which financial data is But one but one very important part. So management accounting or management reporting Or me better integrated reporting is actually managing data. People well in businesses find out things They’ve never known before the data will that will have been there But we wouldn’t have the capability to analyze it so that that I think is Is very exciting What I would say too is it’s challenge things I mean the great thing about the accounting mind is it’s there to challenge a few if simply all you’re doing is You’re reading the football scores You’re not doing very much, but if you’re challenging the information where you get information what is that telling me not Just what is it? What does it tell me? What does it tell me about the past? What does it tell me the future? So be challenging and you know the status quo will be changed because of technology Nowadays stakeholders have Varying expectations from the companies that they’re invested in. How can management accountancy help with that? I think it’s essential that it does I mean, I think stakeholder expectations are considerably broader than they were in the past so it’s not just about Measuring financial performance, it’s about looking at social impact whether that’s in Environmental or governance terms or in terms of the footprint from Carbon emission or whatever. Do you think there needs to be something of a culture shift within boardrooms in Understanding that this it’s not just down to management accountancy to bring the numbers to the table But also the wider impacts the business and an understanding of that. No. I think that it certainly going to be an evolution. It’s going to improve that I think The strategic review that companies now produce the fact that there is much greater Focus in the governance area on social impact I think boards are well aware of it management accounting is a big role to play in terms of giving them a broader set of Information about it a broader set of metrics And the trend on those metrics to help them be able to articulate no we thought about this and this is how We interact with society. This is how it’s moving This is where we expect to get to and this is why we are a good contributor to society Because I think you know just saying we make money nowadays. There’s actually a very shallow Piece of reporting to shareholders and saying we make money because we delight our customers And that’s why the business is sustainable is something you want to be able to say Douglas thanks very much indeed for your time. It’s been my pleasure. Thank you

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