HONG KONG, Oct. 17, 2019 /PRNewswire/ -- Companies across Hong Kong are eyeing the potential of enhanced data analytics capabilities, with 46 percent of finance functions across several industries looking to invest in such systems in the next three years, according to a survey of 217 financial professionals conducted jointly by KPMG and the Association of Chartered Certified Accountants (ACCA).
In the joint report Hong Kong's Data-driven Future, more than one in three surveyed (38 percent) invest in data analytics to improve efficiency and reduce costs, making it the most cited reason for adopting data analytics. That was followed by 20 percent who are motivated to understand business drivers and 16 percent who seek to use these capabilities to develop new products, markets and channels. Other reasons were better understanding customers (13 percent) and driving innovation (9 percent).
Isabel Zisselsberger, Partner and Head of Financial Management, Customer and Operations, KPMG China, said, "Amid current global economic uncertainties, organisations need to move more nimbly to survive, and this means being proactive rather than reactive. Leading organisations clearly use data analytics to their advantage. It is critical that companies in Hong Kong continue their investment in analytics capability and technology, and embrace the power of data to be fit for future."
Tracy Shum, Director, Management Consulting, KPMG China, added: "CEOs and boards are increasingly aware of the possibilities that data analytics generate. They expect faster and more accurate insights with which to make decisions at a pace that matches that of business changes. Organisations that invest in forward-looking data analytics stand to benefit from early-mover advantages and find themselves ideally positioned to thrive in this new environment."
Although there is willingness to invest, many organisations have not invested fully in the potential of data analytics the report found. Only 6 percent of participating financial functions have invested in advanced data analytics systems, with 51 percent remaining heavily reliant on manual processes and spreadsheets to do data analysis. This has led to the surveyed professionals spending two-thirds of their time on descriptive and diagnostic analytics, while only spending one-third of their time on predicting future trends.
Challenges remain
Executives and finance professionals say multiple factors hold organisations back from moving more rapidly towards investing in advanced data analytics.
A lack of awareness of what advanced data analytics can do and what products are available were widely cited as factors slowing down investments in this space, with 19% of survey respondents saying they need support to help enhance their awareness. There is a lack of trust at the C-level, with management teams at many companies still uncertain about data analytics insights due to a lack of understanding of how the science works. There are also concerns among the C-suite about the usefulness of past data and information integrity.
In addition, 14 percent of the financial professionals stated resistance to change as a key hurdle to investing in data analytics. Twenty-five percent noted "cultural change" was the most critical factor needed to invest in forward-looking data analytics.
Another stumbling block identified by finance professionals is the increasing need for the right talent with the right skill sets. Organisations that cultivate ties to those studying data analytics could go a long way in addressing their challenges in finding people who have adequate technical knowhow.
A short-term mindset is another hurdle. When combined with the other hurdles, this explains the current low levels of data analytics investment commitment. Only 19 percent of organisations have a dedicated annual budget for data analytics, according to the survey, and 20 percent have an overall budget for technology initiatives that includes data analytics. That said, about one-third (34 percent) say that although they lack a dedicated budget, they are able to get their budget requests approved upon request.
Such challenges will need to be met as many organisations spend extensive time producing reports and deepening their reliance on spreadsheet technology. According to the survey, some 32 percent of respondents say existing reports are unable to meet their needs, necessitating ad hoc reports. Without a constant review of existing report inventory or use of emerging technology and interactive dashboards, the workload is likely to increase.
Ways to overcome the hurdles
The report suggests companies take the following steps to tackle the challenges:
Eunice Chu, Head of Policy at ACCA Hong Kong, said, "Despite all the hurdles, companies are undeterred in investing in data analytics. Many organisations have decided to increase investments in the next few years. Greater understanding of technology, a change of mindset, and finance professionals being armed with a wider range of related skills through continuing professional development together offer a path forward. ACCA offers regular training opportunities to help finance professionals stay up-to-date with technological trends and related knowledge they need to advance their careers. This multifaceted approach could pave the way for more rapid adoption of technologies, which are widely available in the market. The next step is for an organisation to successfully navigate data analytics implementation."
About KPMG China
KPMG China is based in 23 offices across 21 cities with around 12,000 partners and staff in Beijing, Changsha, Chengdu, Chongqing, Foshan, Fuzhou, Guangzhou, Haikou, Hangzhou, Nanjing, Qingdao, Shanghai, Shenyang, Shenzhen, Tianjin, Wuhan, Xiamen, Xi'an, Zhengzhou, Hong Kong SAR and Macau SAR. Working collaboratively across all these offices, KPMG China can deploy experienced professionals efficiently, wherever our client is located.
KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 153 countries and territories and have 207,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
In 1992, KPMG became the first international accounting network to be granted a joint venture licence in mainland China. KPMG was also the first among the Big Four in mainland China to convert from a joint venture to a special general partnership, as of 1 August 2012. Additionally, the Hong Kong firm can trace its origins to 1945. This early commitment to this market, together with an unwavering focus on quality, has been the foundation for accumulated industry experience, and is reflected in KPMG's appointment for multidisciplinary services (including audit, tax and advisory) by some of China's most prestigious companies.
About KPMG's Financial Management and Data and Analytics Practices
Financial Management practice
The Financial Management practice supports organisations as they deal with the increased complexities and responsibilities related to the role of the CFO and finance functions. The practice helps organisations continually evolve their finance functions: shifting focus from transaction processing and historical reporting to that of a business partner responsible for driving growth and profitability.
Data and Analytics practice
The Data and Analytics core competence comprises data strategy and governance, data architecture, data engineering and visualisation, and advanced analytics and AI. Providing service offerings as well as solutions and frameworks, the team helps clients use analytics to inform their most important decisions amid a global environment defined by constant disruption. KPMG China works with clients to unlock the value of their data through a combination of industry and process knowledge that leverages technology innovation. The end result helps increase revenue, reduce cost and manage risk.
About ACCA
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. ACCA now has 26,000 members and 133,000 students (including affiliates) in Greater China, with 11 offices in Beijing, Shanghai, Chengdu, Guangzhou, Shenzhen, Shenyang, Qingdao, Wuhan, Changsha, Hong Kong SAR and Macau SAR.
Globally, ACCA supports its 219,000 members and 527,000 students (including affiliates) in 179 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 110 offices and centres and 7,571 Approved Employers worldwide and 328 approved learning providers who provide high standards of learning and development.
Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.
ACCA has introduced major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally.
Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability.
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