www.icmai.

in

STUDY MATERIAL

DATA ANALYTICS
FOR
FINANCE PROFESSIONALS
MODULE I
INTRODUCTION TO DATA ANALYTICS

Board of Advanced Studies

THE INSTITUTE OF
COST ACCOUNTANTS OF INDIA
Statutory Body under an Act of Parliament
Headquarters: CMA Bhawan, 12 Sudder Street, Kolkata - 700016
Delhi Office: CMA Bhawan, 3 Institutional Area, Lodhi Road, New Delhi - 110003

Behind every successful business decision, there is always a CMA

 MISSION STATEMENT
“The CMA Professionals would ethically
drive enterprises globally by creating
value to stakeholders in the
socio-economic context through
competencies drawn from the integration
of strategy, management
and accounting.”

VISION STATEMENT
“The Institute of Cost Accountants of
India would be the preferred source of
resources and professionals for the
financial leadership of enterprises
globally.”
INSTITUTE MOTTO

असतोमा स गमय
तमसोमा यो तर ् गमय
म ृ योमामतं
ृ गमय
ॐ शाि त शाि त शाि तः

From ignorance, lead me to truth

From darkness, lead me to light
From death, lead me to immortality
Peace, Peace, Peace

The Ins tute of Cost Accountants of India

The Ins tute of Cost Accountants of India (ICAI) is a statutory body set up under an Act of Parliament in the year 1959. The
Ins tute as a part of its obliga on, regulates the profession of Cost and Management Accountancy, enrols students for its
courses, provides coaching facili es to the students, organizes professional development programmes for the members
and undertakes research programmes in the field of Cost and Management Accountancy. The Ins tute pursues the vision
of cost compe veness, cost management, efficient use of resources and structured approach to cost accoun ng as the
key drivers of the profession. In today's world, the profession of conven onal accoun ng and audi ng has taken a back
seat and cost and management accountants increasingly contribu ng towards the management of scarce resources like
funds, land and apply strategic decisions. This has opened up further scope and tremendous opportuni es for cost
accountants in India and abroad.

A er an amendment passed by Parliament of India, the Ins tute is now renamed as ''The Ins tute of Cost Accountants of
India'' from ''The Ins tute of Cost and Works Accountants of India''. This step is aimed towards synergizing with the global
management accoun ng bodies, sharing the best prac ces and it will be useful to large number of trans-na onal Indian
companies opera ng from India and abroad to remain compe ve. With the current emphasis on management of
resources, the specialized knowledge of evalua ng opera ng efficiency and strategic management the professionals are
known as ''Cost and Management Accountants (CMAs)''. The Ins tute is the 2nd largest Cost & Management Accoun ng
body in the world and the largest in Asia, having approximately 5,00,000+ students and 85,000+ members all over the
globe. The Ins tu on operates through four regional councils at Kolkata, Delhi, Mumbai and Chennai and 107 Chapters
situated at important ci es in the country as well as 10 Overseas Centre headquartered at Kolkata. It is under the
administra ve control of Ministry of Corporate Affairs, Government of India.

DISCLAIMER
The material and content in this publica on should not be reproduced, whether in part or in whole, without the consent of the authori es of The Ins tute of
Cost Accountants of India. The views and contents expressed by the author(s) are personal and do not necessarily represent the views of the Ins tute and
therefore should not be a ributed to it. Readers of this publica on are advised to seek their own professional advice before taking any course of ac on or
decision, for which they are en rely responsible, based on the views and contents of this publica on. The Ins tute neither accepts nor assumes any
responsibility or liability to any reader of this publica on in respect of the informa on contained within it or for any decisions readers may take or
decide not to or fail to take.

©2020 The Ins tute of Cost Accountants of India. All rights reserved.

Behind every successful business decision, there is always a CMA

 www.icmai.in

STUDY MATERIAL

DATA ANALYTICS
FOR
FINANCE PROFESSIONALS
MODULE I
INTRODUCTION TO DATA ANALYTICS

Board of Advanced Studies

THE INSTITUTE OF
COST ACCOUNTANTS OF INDIA
Statutory Body under an Act of Parliament
Headquarters: CMA Bhawan, 12 Sudder Street, Kolkata - 700016
Delhi Office: CMA Bhawan, 3 Institutional Area, Lodhi Road, New Delhi - 110003

Behind every successful business decision, there is always a CMA

 Module I - Introduction to Data Analytics

Evolution of Digital Technology and Industry 4.0:

One of the pioneers of Industry 4.0, the Platform Industry 4.0, defines the term as "the intelligent
networking of machines and processes in industry with the aid of information and communication
technology". Industry 4.0 therefore means the fusion of digitalization with traditional industrial
processes. This results in intelligent value chains and product lifecycles that start with development,
go through manufacturing, assembly, product delivery and maintenance, and end with recycling.

The first industrial revolution, which lasted from around 1760 to 1840, was triggered by the
construction of railways and the invention of the steam engine. It ushered in the era of mechanical
production.

The second industrial revolution began in the late 19th century and continued into the early
20th century. Their main drivers were the introduction of electricity and the assembly line in the
automotive industry by Henry Ford in 1913. As a result, production became much faster, as each
employee concentrated on only one work unit.

The third industrial revolution began in the 1960s and was significantly influenced by the
development of semiconductors, mainframe computers (1960s), personal computers (1970s and
1980s) and the Internet (1990s).

The Fourth Industrial Revolution, also known as Industry 4.0, is the era of digitalization. The term
itself was coined at Hannover Messe 2011 and was included as an important component into the
German government's high-tech strategy. Two years later, the Industry 4.0 Platform set up by the

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Bitkom digital association, the German Electrical and Electronic Manufacturers' Association (ZVEI)
and the German Engineering Federation (VDMA) took up its work. The Industry 4.0 Platform is the
central network for national and international activities concerning digital transformation in
Germany.

The fourth industrial revolution was significantly shaped by physical and digital trends. Klaus
Schwab names four material manifestations of the fourth industrial revolution, which are concrete
and thus tangible:

 Autonomous motor vehicles (not only cars, but also trucks, drones, aircraft, ships)
 3D printing (suitable for medical implants and even wind turbines)
 Advanced robotics (widely used from agriculture to healthcare)
 New materials (e.g. graphene)

Internet of Things (IoT) the largest digital megatrend that bridges the physical and virtual worlds.
The increasing networking of people, objects and machines with the Internet is leading to the
emergence of new business models.

Smart Systems Shape Industry 4.0

Sensors and other devices are used to connect objects of the material, physical world with virtual
networks. The basis for digital production lies in intelligent (smart) systems. But what does "smart"
refer to in a concrete context?
The term "smart" refers to a combination of equally tangible or intangible goods with digital
systems. These in turn are networked and able to communicate intelligently with each other, which
ultimately results in added value for the user. Here, the goods sometimes expand their original
range of services many times over. There are also three terminological specifications: Smart Factory,
Smart Products and Smart Services.

What does Smart Factory mean? The term Smart Factory, or intelligent factory, basically refers to
adaptive production systems that are networked by software and connected to the various value
creating networks. Operators benefit above all from the prompt dissemination and utilization of
data. In order to ensure the most secure and predictable exchange of information between the
devices and services involved, network and real-time capability as well as scalability are critical
factors for success. On the basis of decentralized intelligence, these scalable architectures can make
their own decisions. Apart from factories, products can also be intelligent. But this also raises the
question of a definition.

Smart Products and Smart Services

What are Smart Products? Smart products are products that can be flexibly adapted to the needs of
the user and can also be connected to other systems by means of intelligent networking. This
makes it possible, for example, to store configuration data on a component or module in such a
way that subsequent commissioning of the machine is possible in a timely manner, since manual
setup measures are no longer required. Private users may know this capability from the

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independent integration of a smart TV into their own device peripherals. Smart Factory and Smart
Products are complemented by Smart Services as a third component.

What are Smart Services? Smart Services are generally defined as a combination of virtual and
physical services that offer added value to the customer. Smart Products often go hand in hand
with Smart Services. These services ensure a flexible market orientation at all times, which promotes
agility. The basis for these services is provided by networked software environments, which in turn
are embedded in the services.

One example is remote monitoring: Things are made with sensors or RFID-Chips to allow them to
be tracked. The exact point in the supply chain at which the product/object is currently located can
be traced. This is widely used in the field of logistics and increases competitiveness and
organizational capability.

Characteristics of Industry 4.0

The intelligent factory is at the heart of Industry 4.0. The aim is to create an autonomous
production in which people, machines, plants, and products communicate independently with each
other. So-called cyber-physical systems make production more flexible and efficient. This makes it
possible to implement individual customer wishes at costs that were previously only possible in
mass production.

Since many of today's products are developing or changing faster and faster, production must be
able to keep up. To avoid having to surrender without a fight to permanently shortening
innovation and product cycles, it is necessary for companies to be able to act flexibly. One
promising step along this path may be to identify the respective network production capacities
across companies.

Due to the cross-company networking of productions, it is possible to react flexibly to fluctuating

market conditions or order situations. Such smart factories, integrated into an ecosystem, also
ensure particularly efficient utilization, which can reduce costs and promote more resource-efficient
production. Company A shares its own free capacities with company B, which is fully utilized. If
Company B uses the offer, it will not only temporarily expand its own production facilities but will
also enable Company A to achieve better capacity utilization. This allows both companies to keep
fluctuations in orders to a minimum. Since such order-controlled production requires
standardization of the individual manufacturing steps, the prerequisites for automated order
calculation, allocation and finally control are created at the same time. This results in additional
efficiency. Additionally, maintenance procedures based on the evaluation of process and machine
data can also be carried out proactively. This procedure is called Predictive Maintenance predictive
maintenance.

Platform Industry 4.0, a joint project of the German trade associations BITKOM, VDMA and ZVEI,
attributes the fourth industrial revolution the potential to increase the economic efficiency of
production, strengthen the competitiveness of industry in Germany and increase the flexibility of
production.

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The rise of new digital industrial technology, known as Industry 4.0, is a transformation that makes
it possible to gather and analyse data across machines, enabling faster, more flexible, and more
efficient processes to produce higher-quality goods at reduced costs. This manufacturing
revolution will increase productivity, shift economics, foster industrial growth, and modify the
profile of the workforce—ultimately changing the competitiveness of companies and regions.

Advanced digital technology is already used in manufacturing, but with Industry 4.0, it will
transform production. It will lead to greater efficiencies and change traditional production
relationships among suppliers, producers, and customers—as well as between human and machine.
Nine technology trends form the building blocks of Industry 4.0.

Augmented Reality:

Augmented reality is the blending of interactive digital elements – like dazzling visual overlays,
buzzy haptic feedback, or other sensory projections – into our real-world environments. If you
experienced the hubbub of Pokémon Go, you witnessed augmented reality in action. This (once
incredibly popular) mobile game allowed users to view the world around them through their
smartphone cameras while projecting game items, including onscreen icons, score, and ever-
elusive Pokémon creatures, as overlays that made them seem as if those items were right in your
real-life neighbourhood. The game's design was so immersive that it sent millions of kids and
adults alike walking (and absentmindedly stumbling) through their real-world backyards in search
of virtual prizes. Google Sky Map is another well-known AR app. It overlays information about
constellations, planets and more as you point the camera of your smartphone or tablet toward the
heavens. Wikitude is an app that looks up information about a landmark or object by your simply
pointing at it using your smartphone's camera. Need help visualizing new furniture in your living

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room? The IKEA Place app will provide an overlay of a new couch for that space before you buy it
so that you can make sure it fits [source: Marr]

But AR is more than just smartphone fun. It is a technology that finds uses in more serious matters,
from business to warfare to medicine.

Virtual Reality (VR) implies a complete immersion experience that shuts out the physical world.
Using VR devices such as HTC Vive or Oculus Rift ,users can be transported into a number of real-
world and imagined environments such as the middle of a barren desert or even on the wings of a
dragonfly.

3 D Printing

By and large, most manufacturing industries are set to benefit from adopting 3D printing
technology at the earliest. However, most tangible benefits will be reaped by automotive and large
manufacturing companies, due to the significant cost savings associated with digitalizing their
inventory. Other companies that are likely to benefit earlier include consumer manufacturing,
defence equipment manufacturers and healthcare companies, especially those in dental healthcare
&prosthetics.

To summarize, we are on the threshold of another industrial revolution called Industry 4.0. As the
speed, reliability, safety, and quality of 3D printers improves, and the cost reduces, 3D printers are
set to play an important role in this digital transformation of industry. As the performance of 3D
printers improves rapidly and the cost decreases, new opportunities will arise that will take 3D
printing ever closer to mass production. As 3D printing develops, the range of products that can
be manufactured is also set to grow. Rate of development of specialized printing materials,
integration of digital security to protect IP and certification of 3D products by regulatory agencies
will boost adoption of 3D printers in Industry 4.0 But of course it is the willingness of innovative
manufacturers who choose to embrace the tenets of Industry 4.0 and digitalize their businesses fast
who will benefit the most.

Internet of Things (IOTs)

The Internet of things (IoT) is a system of interrelated computing devices, mechanical and digital
machines provided with unique identifiers (UIDs) and the ability to transfer data over a network
without requiring human-to-human or human-to-computer interaction. The Internet of Things
extends internet connectivity beyond traditional devices like desktop and laptop
computers, smartphones, and tablets to a diverse range of devices and everyday things that utilize
embedded technology to communicate and interact with the external environment, all via the
Internet. Examples of objects that can fall into the scope of Internet of Things include connected
security systems, thermostats, cars, electronic appliances, lights in household and commercial
environments, alarm clocks, speaker systems, vending machines and more. Businesses can
leverage IoT applications to automate safety tasks (for example, notify authorities when a fire
extinguisher in the building is blocked) to performing real-world A/B testing using networked
cameras and sensors to detect how customers engage with products.

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Smart Factories

The smart factory is defined as a factory where physical production processes and operations are
combined with digital technology, smart computing, and big data to create a more opportunistic
system for companies that focus on manufacturing and supply chain management. The smart
factory are an aspect of Industry 4.0, a new phase in the Industrial Revolution that focuses heavily
on real-time data, embedded sensors, connectivity, automation, and machine learning.

As factories evolve in light of the data revolution, businesses need to rethink how they handle
everything from automation strategies to workforce development tactics. Along the way,
manufacturers will need modernized tools, including robust, flexible enterprise resource planning
systems as a data and transactional backbone, that help them adapt quickly as they build toward a
smart-factory future.

Some ways this can play out include:

 Integrating real time production data with predictive inventory and purchase management
systems so material supply can align more optimally with the production schedule.
 Using machine learning to automatically analyse data gathered by sensors and monitoring
devices on equipment and recognize opportunities for efficiency gains. From there, the
software can actually change the parameters machines use to function, automatically
putting process improvements into place.
 Leveraging robotics solutions at a deeper level, such as drones to handle repetitive tasks
that previously required human intervention.

BIG DATA

The revolution of Industry 4.0 is not the big data itself. Manufacturers have been generating a lot of
real-time production and quality data for quite some time now. However, it is not unusual for these
lakes of siloed data to “go to waste” due to the lack of platforms that can truly leverage these
diverse data sources and extract overarching insights to improve quality, productivity, and so on. In
other words, the pain point is not generating and collecting data but being able to effectively
extract value from it.

Industry 4.0 big data comes from many and diverse sources:

 Product and/or machine design data such as threshold specifications

 Machine-operation data from control systems
 Product- and process-quality data
 Records of manual operations carried out by staff
 Manufacturing execution systems
 Information on manufacturing and operational costs
 Fault-detection and other system-monitoring deployments
 Logistics information including third-party logistics
 Customer information on product usage, feedback, and more

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Some of these data sources are structured (such as sensor signals), some are semi-structured (such
as records of manual operations), and some are completely unstructured (such as image files). In all
cases, however, most of the data is either unused or used only for very specific, tactical purposes.
One key factor as to why Industry 4.0 big data is generally not leveraged strategically is poor
interoperability across incompatible technologies, systems, and data types; a second key factor is
the inability of conventional IT systems to store, manipulate, and govern such huge volumes of
diverse data being generated at high velocity.

Thus, what companies require are cutting-edge platforms that can fully leverage the value of
manufacturing big data using machine learning, artificial intelligence, and predictive analytics.

Simulation

We already know Industry 4.0 is driving things forward in a very fascinating way. One of the
technologies which has given its fair share to the wonder of Industry 4.0 is Simulation: the
computer model which can mimic the operation of any real or suggested system. Perhaps the best
way simulation can help an organization is to estimate better the return of investment before it is
actually initiated. It is another enabler of improved decision making and needless to say it helps
companies both save and earn more money. How does that happen? Well, the main reason a
simulation process can achieve such results, is that it can account for the behaviour of individual
tasks and resources by measuring what will happen in a manufacturing system over a given period
of time. Simulation is also preferred because of another important feature it has – a risk-free
environment. Here is an example: your company receives a large production order which needs to
be done in a short amount of time and because of the process intensity a machine brakes down or
you identify another problem within the production line. This is where simulations comes in handy:
it can help you find out such weaknesses in advance and reduce equipment downtime, by testing
ways to limit its impact and also making it easier for engineers to design a more efficient
manufacturing line.

Autonomous robots

Autonomous robots are intelligent machines capable of performing tasks in the world by
themselves, without explicit human control. Examples range from autonomous helicopters to
Roomba, the robot vacuum cleaner. Autonomous devices are physical robots that are aware of
their physical surroundings, can learn from input and experience and are able to do tasks mostly on
their own. Drones and humanoid robots are only a few examples of autonomous devices.

An essential facet of Industry 4.0 is autonomous production methods powered by a concept

referred to as the “Internet of Things” (IoT) — the idea that by harnessing a connected mesh of
objects, devices and computers machines can communicate with each other. Autonomous robots
are a seminal example across countless industries, including manufacturing.

By connecting to a central server, database, or programmable logic controller the actions of robots
can be coordinated and automated to a greater extent than ever before. They can complete tasks
intelligently, in an orchestrated manner with minimal human input. Materials can be transported
across the factory floor via autonomous mobile robots (AMRs), avoiding obstacles, coordinating
with fleet mates, and identifying where pickups and drop-offs are needed in real-time.

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Cloud Computing

Industry 4.0 has been driven by 4 disruptors

 a rise in data volumes

 computational power and connectivity
 emergence of analytics and business intelligence capabilities – e.g. new forms of human-
machine interaction such as touch interfaces and augmented-reality systems
 improvements in transferring digital instructions to the physical world such as advanced
robotics and 3D printing.

Cloud computing means storing and accessing data and programs over the Internet instead of
your computer's hard drive. The cloud is just a metaphor for the Internet. It goes back to the
days of flowcharts and presentations that would represent the gigantic server-farm
infrastructure of the Internet as nothing but a puffy, white cumulus cloud, accepting
connections and doling out information as it floats. For it to be considered "cloud computing,"
you need to access your data or your programs over the Internet, or at the very least, have that
data synced with other information over the Web. In a big business, you may know all there is
to know about what's on the other side of the connection; as an individual user, you may never
have any idea what kind of massive data processing is happening on the other end. The end
result is the same: with an online connection, cloud computing can be done anywhere, anytime.

That said, Microsoft also offers a set of Web-based apps, Office Online, that are Internet-only
versions of Word, Excel, PowerPoint, and OneNote accessed via your Web browser without
installing anything. That makes them a version of cloud computing (Web-based=cloud).

Google Drive: This is a pure cloud computing service, with all the storage found online so it can
work with the cloud apps: Google Docs, Google Sheets, and Google Slides. Drive is also
available on more than just desktop computers; you can use it on tablets like the iPad or on
smartphones, and there are separate apps for Docs and Sheets, as well. In fact, most of
Google's services could be considered cloud computing: Gmail, Google Calendar, Google Maps,
and so on.

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The journey from ERP to digital transformation

If you are a business aiming for delivering value to your customers and willing to accept challenges
to integrate technology for a better tomorrow, then Digital Transformation is your Nirvana!

Small to large enterprises, require digital transformation to remain ahead of their competitors. The
increasing value offered to your customers and digitally transforming your business goes hand-in-
hand. According to IDG, State of Digital Business Transformation, 89% of businesses have accepted
their first business strategy as digital transformation. This includes 95% in Services, 93% in Financial
Services, and 92% in Healthcare Services, followed by other industries.

Key Objectives of Digital Transformation

Digital Transformation is undoubtedly one of the biggest buzzwords of today. Enterprise leaders
are looking for strategies to digitally transform their business to leverage the benefits. According to
IDC, as per the Worldwide Semi-annual Digital Transformation Spending Guide, the worldwide
spending on digital transformation, by the year is forecasted to reach $1.97 trillion by the year
2022.

The major objectives of digitally transforming your business include the following:

 Improved Customer Experience

 Increased Operational Workflow and Agility
 Enhancement of Workforce
 Better Work Culture
 Integration of Digital Technology

How Is Digital Transformation Different from ERP Implementation?

ERP or Enterprise Resource Planning software is a suite of applications that can be customized to
allow businesses and enterprises to manage their processes.

However, with the Lidl software disaster followed by the National Grid lawsuit, enterprises are
sceptical about ERP implementation, to the core. Some people consider ERP implementation as a
broader form of Digital Transformation. But both are different in various ways. Let us walk through
the following key differences between the two:

Differences in Technology

Core ERP vendors such as Microsoft, SAP, and Oracle rely on technologies that automate back-
office functions. On the other hand, digital transformation makes use of a variety of technologies
that include ERP, Artificial Intelligence, Internet of Things, Industry 4.0, to transform their existing
business models.

ERP is a typical enterprise application that integrates phases of business operations such as
product planning, manufacturing, sales, financials, inventory management, marketing, and human

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resources within a single MVC architecture, that is, in a single user interface, application, and
database.

Differences in Business Process Management

ERP systems approach business processes by incremental steps towards business processes for
incremental benefits. On the other hand, digital transformation approaches business process
improvement by “quantum leaps”. That is, only digital transformation supports a reengineering of
business processes.

Business processes can be processed such as customer onboarding, managing insurance claims,
etc. The difference lies in the approaches as well. ERP systems take a holistic approach altogether,
whereas, on the other hand, digital transformation requires a strategy.

Additionally, ERP systems aim at providing data and functions to deliver products and services
more efficiently to customers. On the other hand, digital transformation enhances the way
products and services are delivered to customers. Digital transformation additionally changes even
the products delivered to the customers.

In a nutshell, ERP implementation is automating the existing business processes, whereas digital
transformation involves taking quantum leaps for improving business value. Transforming
businesses digitally involves business process re-engineering and optimization. Additionally, digital
transformation relies on disruptive changes in existing business processes and are open to new
business models and strategies on doing business as well.

Differences in Organizational Change Management

Though there are MNCs are adopting technologies such as SAP HANA, Oracle Cloud ERP, or any
other ERP implementation, is likely to witness an organizational change management challenge.
Organizational change management associated with ERP implementation aims at training people
on how to perform the same processes and transactions in a new system.

According to its definition, Enterprise Resource Planning Organizational Change Management (ERP
OCM), is a framework to manage the impact of new business processes along with the
organizational changes in an enterprise.

However, digital transformations aim at helping the workforce change their job roles to support
new business models. Digital transformation makes use of disruptive technology rather than
automating the status quo. This is because while ERP systems provide an incremental
improvement, digital transformation aims at materially disrupting the existing business model for
improvement. This leads to the provision of better products and services to customers.

In a nutshell, Organizational change management in ERP systems aims at addressing the people
side of change management in enterprises. It can be also defined as strategies that help
stakeholders and employees migrate from their existing state to a new system altogether. On the
other hand, digital transformation changes the existing business model with a disruptive
technology mechanism.

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While ERP implementation focuses on achieving greater efficiency with an enterprise’s existing
business model, digital transformation disrupts or changes the existing business model.

Differences in Providing Business Value And ROI

A recent HBR survey was conducted for certain companies that invested in digital transformation.
This survey that polled 2216 employees illustrated that these companies invested in digital
transformation and embraced an annual revenue of $500 million. This figure shows that strategic
planning on transforming their businesses digitally resulted in increased revenue and reduced
costs.

ERP implementations can deliver a good ROI for enterprises within a few years with all business
processes going well. Whereas on the other hand, digital transformation potentially delivers an
exponential increase in revenue and considerably reduced costs. This, in turn, leads to
enhancements in business value, significant ROI increase, customer loyalty and satisfaction,
improved efficiency and other benefits.

Differences in Employee Strategies

Enterprise Resource Planning systems focus on getting their employees trained on new systems.
This transactional training addresses organizational change management concerns. On the other
hand, digital transformation aims at employee acceptance strategies of the new systems.
Enterprises adopting digital transformation perform so by making use of comprehensive
organizational changes and employee transition methodologies.

ERP systems hardly, invest in organizational change management strategies. This, in turn, leads to
high failure rates in enterprises adopting ERP implementation. Whereas on the other hand, digital
transformation invests largely on organizational change management strategies. This increases the
people side support considerably. This largely explains the success rate and improved ROI as well
as the increased business value in enterprises adopting digital transformation strategies.

ERP Implementation or Digital Transformation – Which Is Better for Your Business?

To automate business operations entirely, some enterprises choose a single technology platform.
Leveraging on the plethora of technology advancements is the key solution to improving business
processes.
A right Risk Mitigation strategy can work wonders in managing your business processes
irrespective of which strategy you choose to implement. To this strategy, it is also required that all
employees be equally aligned to this strategy as well.

There is no universal or all-purpose solution as to a perfect business strategy implementation. This

is where our experts can provide you with the best roadmap for your business. Our experts can
guide you with step-by-step guidance for implementing the best technology that suits your
enterprise. Call our strategists right away to learn more about which strategy is best to implement
for your business!

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 Digital transformation is often associated with highly innovative technologies like predictive
analytics, AI, and robotic process automation (RPA). Common business applications like
enterprise resource planning (ERP) systems do not often inspire quite the same level of
enthusiasm.

 Although ERP is not new or disruptive, the technology is advancing from the back office to the
forefront of business digitization. While its customary focus has been to help organizations unite
traditional business-management solutions, ERP also provides a flexible foundation upon which
organizations can integrate more cutting-edge technologies. Put simply, a well-configured ERP
solution can help organizations strategically advance their digital maturity and drive
transformation.
 Implementation of ERP and ancillary technologies will not be easy, but here are eight tips on
how to execute a successful deployment and get the most value from your IT investments.

1. Align ERP and digital strategy

ERP should be fully aligned with your organization’s digital strategy, as well as its business
objectives and processes. IT and business leaders must ensure that ERP is embedded in the
organizational culture and serves as the foundation for technology modernization. A certain
amount of education might be necessary, since using ERP as a foundation for digital
transformation will be a novel concept for some stakeholders.

Executive buy-in will be critical to ensuring that the implementation extends beyond technology.
You will need to maintain an unwavering focus on re-engineering business processes and
comprehensive change-management initiatives for employees.

2. Implement in phases

Chances are good that implementation of an ERP system will temporarily disrupt day-to-day
operations. Keep in mind that typical deployments last roughly 10 to 18 months, depending on the
size and complexity of the company and its operations.

A phased deployment can help reduce the risk of disruption. Many businesses opt to implement
ERP by individual module, updating functional groups one at a time. Doing so enables
organizations to better understand the implementation process, challenges, and expectations for
value. Incremental adoption also allows for employee training, one business function at a time;
deployment teams can apply lessons learned from each launch to continually enhance deployment
processes.

Another option is an incremental deployment by business location or site. This approach can help
ensure project success by implementing modules at an initial site that serves as a pilot. This will
enable you to establish a reference point, experience, and roadmap for subsequent rollouts across
the organization.

3. Rewrite the right business processes

Digitally delivered customer preferences, market shifts, and rapidly evolving business models have
made efficient processes critical to operational performance. Deployment or upgrade of an ERP
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system provides an opportunity to re-engineer and document operational processes from the
beginning of the project. The goal is to redefine and streamline your business processes in ways
that standardize operations across functional units and enable integration of leading-edge
technologies.

You can, for instance, harness the power of RPA to automate manual processes across multiple
functions to make low-level decisions quickly and efficiently. Another way to streamline operations
is the use of AI to automate tasks like end-to-end processing of invoices for accounts payable.

It is important to note that simply applying new technology to old processes is not effective. Now’s
the time to strategically rethink your business processes in ways that, in combination with new
digital tools, can really transform the organization.

4. Maximize your data

Data is the lifeblood of your business, and ERP provides a centralized information platform and a
single point of truth. But the insights you glean will only be as good as the underlying data.

You will need to maximize the utility of your data with a comprehensive data-governance program
and strategy for cleaning, managing, storing, and archiving disparate types of information. Data
must be interoperable across all relevant sources to achieve real insights into your business
performance.

It is also essential that data is accurate, particularly when implementing data-driven technologies
like predictive analytics. When centralized on the ERP platform, this data becomes a single point of
truth for analytics across the organization. It should be clean and consistent to seamlessly flow
from the ERP across the ecosystem.

5. Make ERP customer-centric

One of the most powerful strengths of ERP is its ability to improve the customer experience. That is
also a key driver – and an ideal outcome – of digital transformation.

ERP can help you align internal processes to deliver on customer needs. Business leaders should
first identify critical customer interactions and leverage digitized data to tailor the experience. You
will also need to refocus business processes on the customer and combine the right technologies.
ERP should be integrated with systems like CRM and e-commerce to unite customer data, as well
as help enhance inventory management, pricing, and supply-chain operations.

6. A path to the cloud

While on-premise deployment remains the most popular option among midsize businesses, cloud
adoption is catching up. It is easy to see why: Cloud-based ERP solutions are scalable, cost-
effective, and offer strong cybersecurity safeguards. The cloud also provides a modern platform for
deployment of new technologies.

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Some businesses we know are implementing cloud-ready on-premises systems that can be moved
to the cloud later. Doing so enables them to transition to cloud at their own pace, based on
individual business strategy, resources, and evolving customer needs.

7. Training for change

Organizational change management is critical to successfully adopting ERP. Many people resist
new technologies, so you will need to identify and eliminate barriers that prevent staff from using
ERP and ancillary systems. Communications and training will be the backbone of instruction and
will require carefully considered programs to effectively educate your people in the processes and
procedures for using new systems.

8. The next level in digital maturity

If your organization currently has a robust, well-integrated ERP system, you could be poised to
build on that foundation and maximize your ERP investment by adding on emerging technologies
like AI, RPA, and advanced analytics. Doing so can open a world of new possibilities. Consider, for
instance, that businesses are beginning to deploy AI-driven products that automate functions like
accounts payable. AI tools, when integrated with ERP, can programmatically capture, process, and
pay invoices, as well as extract business-critical information that can be parsed to better
understand performance and profit.

Application of digital tools for business decision-making and

execution management
 Researchers analysed small businesses’ use of digital tools in six categories:

 Business web presence, such as online directory listings, websites, and mobile apps
 Social media for customer engagement, sales, marketing, or other business purposes
 Data analytics to gain customer insights or inform business decisions
 E-commerce and online scheduling capabilities via their own websites or third-party
platforms
 Online advertising, including ad banners on websites, social media advertising, and search
engine marketing and optimization
 Internal productivity tools that improve internal business processes, such as cloud-based
software, video conferencing, and corporate social networks.

The typical decision-making process involves defining the problem, gathering information,
identifying alternatives, choosing among the alternatives, and reviewing/monitoring the results.
There are many different techniques that are used by managers to help them choose among the
alternatives and decide. In some instances, it may be a combination of a couple different strategies
that help them achieve the best results. What works for some organizations may not work for
others, and what works for making one decision may not work for the next. We have compiled this
list to help narrow things down and give you an idea of what some of the more popular tools and
strategies for decision-making are.

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Top Decision Making Tools & Strategies

Marginal Analysis

Marginal analysis weighs the benefits of an input or activity against the costs. This type of analysis
helps business leaders determine whether and activity or input is providing the maximum return-
on-investment (ROI). Marginal analysis is an effective tool for decision-making because it takes
preferences, resources, and informational constraints into account, so managers can make more
optimal decisions based on this information.

To conduct a marginal analysis, you need to change a variable, such as the quantity of an input you
use, or the volume of output you produce. Once you have identified that variable, determine what
the increase in total benefits would be if one more unit of the control variable were added. This is
considered the marginal benefit of the added unit. Likewise, the marginal cost of the added good
should also be calculated. The marginal cost is – you guessed it – the increase in total cost if one
more unit of the control variable were added. If the marginal benefit outweighs the marginal cost,
then there is a “net benefit” and the marginal unit of the variable should be added.

SWOT Diagram

When you are planning to make a significant change in your business, SWOT diagrams can help
you break down the situation into four distinct quadrants:

 Strengths: What does your company do better than its competitors? Think of both internal
and external strengths that you possess.
 Weaknesses: Where can your company improve? Try to take a neutral approach and
consider what factors may be hurting your business.
 Opportunities: Look at your strengths and think of how you can leverage them to create
new openings for your business. Also consider how eliminating a specific weakness could
open you up to a new opportunity.
 Threats: Determine what challenges stand in the way of achieving your goals. Identify the
primary threats to your organization.

A SWOT Analysis can help you identify the forces that influence a strategy, action, or initiative. This
information can then be used to guide you in the right direction and support your business
decisions. To get the full picture, it is essential to take multiple viewpoints into account. When you
enlist the help of other team members and stakeholders, it is easier to spot trends, patterns, and
connections between the quadrants. Taking a collaborative approach can also offer deeper insight
into potential opportunities and threats you may not have been able to identify alone

Decision Matrix

When you are dealing with multiple choices and variables, a decision matrix can bring clarity to the
disarray. A decision matrix is similar to a pros/cons list, but it allows you to place a level of
importance on each factor. That way, you can more accurately weigh the different options against
each other.

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How to Create a Decision Matrix:

 List your decision alternatives as rows

 List relevant factors as columns
 Establish a consistent scale to assess the value of each combination of alternatives and
factors
 Determine how important each factor is towards making your final decision and assign
weights accordingly
 Multiply your original ratings by the weighted rankings
 Add up the factors under each decision alternative
 The option that scores the highest wins

Decision Matrix Example:

In this example, a company is trying to decide about which vendor they should work with for an
upcoming project. The factors they are using to evaluate each option are - capabilities, reputation,
reliability, and price. They care more about the capabilities and price than the reputation and
reliability of the vendor, so they weighted the importance of those factors accordingly. Based on
the results from their decision matrix, they should be able to confidently decide on Vendor 2.

Pareto Analysis

The Pareto Principle helps in identifying changes that will be the most effective for your business.
The principle is named after economist Vilfredo Pareto, who found that an 80/20 distribution
occurs regularly in the world. In other words, 20% of factors frequently contribute to 80% of the
organization’s growth.

An example of this principle applying to business management would be 80% of sales coming from
20% of your customers. A business can leverage the Pareto Principle by identifying the
characteristics of the top 20% of their customers and finding more customers like them. When you
can identify what small changes will make the largest impact, you are able to prioritize the
decisions that have the highest level of influence. This allows managers to dedicate their energy
and resources on what will actually move the needle for their business.

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Cyber Security
Computer security, cybersecurity, or information technology security (IT security) is the protection
of computer systems and networks from the theft of or damage to their hardware, software,
or electronic data, as well as from the disruption or misdirection of the services they provide.

The field is becoming more important due to increased reliance on computer systems, the Internet
and wireless network standards such as Bluetooth and Wi-Fi, and due to the growth of "smart"
devices, including smartphones, televisions, and the various devices that constitute the "Internet of
things". Owing to its complexity, both in terms of politics and technology, cybersecurity is also one
of the major challenges in the contemporary world.

Examples of Cyber Threats:

Backdoor

A backdoor in a computer system, a cryptosystem, or an algorithm, is any secret method of

bypassing normal authentication or security controls. They may exist for several reasons, including
by original design or from poor configuration. They may have been added by an authorized party
to allow some legitimate access, or by an attacker for malicious reasons; but regardless of the
motives for their existence, they create a vulnerability. Backdoors can be very hard to detect, and
detection of backdoors are usually discovered by someone who has access to application source
code or intimate knowledge of the computer's Operating System.

Denial-of-service attack

Denial of service attacks (DoS) are designed to make a machine or network resource unavailable to
its intended users. Attackers can deny service to individual victims, such as by deliberately entering
a wrong password enough consecutive times to cause the victims account to be locked, or they
may overload the capabilities of a machine or network and block all users at once. While a network
attack from a single IP address can be blocked by adding a new firewall rule, many forms
of Distributed denial of service (DDoS) attacks are possible, where the attack comes from a large
number of points – and defending is much more difficult. Such attacks can originate from
the zombie computers of a botnet, or from a range of other possible techniques,
including reflection and amplification attacks, where innocent systems are fooled into sending
traffic to the victim.

Direct-access attacks

An unauthorized user gaining physical access to a computer is most likely able to directly copy
data from it. They may also compromise security by making operating system modifications,
installing software worms, keyloggers, covert listening devices or using wireless mice. Even when
the system is protected by standard security measures, these may be able to be by-passed by
booting another operating system or tool from a CD-ROM or other bootable media. Disk
encryption and Trusted Platform Module are designed to prevent these attacks.

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Eavesdropping

Eavesdropping is the act of surreptitiously listening to a private computer "conversation"

(communication), typically between hosts on a network. For instance, programs such
as Carnivore and NarusInSight have been used by the FBI and NSA to eavesdrop on the systems
of internet service providers. Even machines that operate as a closed system (i.e., with no contact to
the outside world) can be eavesdropped upon via monitoring the
faint electromagnetic transmissions generated by the hardware; TEMPEST is a specification by the
NSA referring to these attacks.

Multi-vector, polymorphic attacks

Surfacing in 2017, a new class of multi-vector, polymorphic cyber threats surfaced that combined
several types of attacks and changed form to avoid cybersecurity controls as they spread. These
threats have been classified as fifth generation cyberattacks.

Phishing

Phishing is the attempt to acquire sensitive information such as usernames, passwords, and credit
card details directly from users by deceiving the users. Phishing is typically carried out by email
spoofing or instant messaging, and it often directs users to enter details at a fake website whose
"look" and "feel" are almost identical to the legitimate one. The fake website often asks for
personal information, such as log-in details and passwords. This information can then be used to
gain access to the individual's real account on the real website. Preying on a victim's trust, phishing
can be classified as a form of social engineering. Attackers are using creative ways to gain access to
real accounts. A common scam is for attackers to send fake electronic invoices to individuals
showing that they recently purchased music, apps, or other, and instructing them to click on a link
if the purchases were not authorized.

Privilege escalation

Privilege escalation describes a situation where an attacker with some level of restricted access is
able to, without authorization, elevate their privileges or access level. For example, a standard
computer user may be able to exploit a vulnerability in the system to gain access to restricted data;
or even become "root" and have full unrestricted access to a system.

Social engineering

Social engineering, insofar as computer security is concerned, aims to convince a user to disclose
secrets such as passwords, card numbers, etc. by, for example, impersonating a bank, a contractor,
or a customer.

Social engineering, in the context of information security, is the psychological manipulation of

people into performing actions or divulging confidential information.

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A common scam involves fake CEO emails sent to accounting and finance departments. In early
2016, the FBI reported that the scam has cost US businesses more than $2 billion in about two
years.

In May 2016, the Milwaukee Bucks NBA team was the victim of this type of cyber scam with a
perpetrator impersonating the team's president Peter Feigin, resulting in the handover of all the
team's employees' 2015 W-2 tax forms.

Spoofing

Spoofing is the act of masquerading as a valid entity through falsification of data (such as an IP
address or username), in order to gain access to information or resources that one is otherwise
unauthorized to obtain. There are several types of spoofing, including:

 Email spoofing, where an attacker forges the sending (From, or source) address of an email.
 IP address spoofing, where an attacker alters the source IP address in a network packet to hide
their identity or impersonate another computing system.
 MAC spoofing, where an attacker modifies the Media Access Control (MAC) address of
their network interface to pose as a valid user on a network.
 Biometric spoofing, where an attacker produces a fake biometric sample to pose as another
user.

Tampering

Tampering describes a malicious modification or alteration of data. So-called Evil Maid attacks and
security services planting of surveillance capability into routers are examples.

Impact of security breaches

Serious financial damage has been caused by security breaches, but because there is no standard
model for estimating the cost of an incident, the only data available is that which is made public by
the organizations involved. "Several computer security consulting firms produce estimates of total
worldwide losses attributable to virus and worm attacks and to hostile digital acts in general. The
2003 loss estimates by these firms range from $13 billion (worms and viruses only) to $226 billion
(for all forms of covert attacks). The reliability of these estimates is often challenged; the underlying
methodology is basically anecdotal." Security breaches continue to cost businesses billions of
dollars, but a survey revealed that 66% of security staffs do not believe senior leadership takes
cyber precautions as a strategic priority.

However, reasonable estimates of the financial cost of security breaches can actually help
organizations make rational investment decisions. According to the classic Gordon-Loeb
Model analysing the optimal investment level in information security, one can conclude that the
amount a firm spends to protect information should generally be only a small fraction of the
expected loss (i.e., the expected value of the loss resulting from a cyber/information security
breach).

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Legal Provisions

Some provisions for cybersecurity have been incorporated into rules framed under the Information
Technology Act 2000.

The National Cyber Security Policy 2013 is a policy framework by Ministry of Electronics and
Information Technology (MeitY) which aims to protect the public and private infrastructure from
cyberattacks, and safeguard "information, such as personal information (of web users), financial
and banking information and sovereign data". CERT- In is the nodal agency which monitors the
cyber threats in the country. The post of National Cyber Security Coordinator has also been created
in the Prime Minister's Office (PMO).

The Indian Companies Act 2013 has also introduced cyber law and cybersecurity obligations on the
part of Indian directors. Some provisions for cybersecurity have been incorporated into rules
framed under the Information Technology Act 2000 Update in 2013.

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Introduction to Data Analytics

We live in a data driven world where organizations, irrespective of their size or area of operations,
cannot ignore the impact of data analytics in the way they run their businesses. Whether it is to
improve customer experience or managing resources better, data analytics is being used at every
level of the organization to make informed decisions.

This is true, of course, only for organizations that have already started on their digital
transformation journey. Others who have not adapted will soon realize that they have missed the
bus to the next era of decision-making. When organizations invest in formal training, communities
to foster continued learning, and certifications to measure data literacy, people can thrive with data
and make a greater impact on the business – better prepared to be agile as digital transformation
demands data literacy at all levels.

Data analytics initiatives can help businesses increase revenues, improve operational efficiency,
optimize marketing campaigns and customer service efforts, respond faster to emerging market
trends and gain a competitive edge over rivals – all with the goal of making businesses smarter.
With nearly two out of three companies now adopting data analytics, the process is strongly
shaping the modern business world and is something most brands want to utilize.

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Data that is analysed can consist of either historical records or new information that is getting
generated continually or continuously. It could come from within the organizations or from
external sources. It could be structured or unstructured.

Being proactive, however, is key. Traditional reporting & BI is gradually maturing into advanced
analytics. It is no longer enough to retro-actively analyse what happened and why. Instead, systems
and partnerships need to be put in place which leverage high quality data and interpret the data to
make predictions around what is likely to happen next, with concrete evidence to back up the
claims.

“One of the hardest parts about AI projects is identifying the questions you want
to ask.”

Rachel Kalmar, Data Scientist & Staff Software Engineer, Tableau

While the sources as well as the nature of data will vary from business to business and case to case,
the approach to problem solving will follow the same set of principles in most cases.

1. Enunciate the problem statements

2. Set clear measurement priorities
a) decide what to measure
b) decide how to measure it
3. Identify sources and collect data
4. Analyse data
5. Storytelling

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Types of Data Analytics to Improve Decision-Making

Data analytics is broken down into four basic types.

1. Descriptive analytics describes what has happened over a given period of time. Have the
number of views gone up? Are sales stronger this month than last?
2. Diagnostic analytics focuses more on why something happened. This involves more
diverse data inputs and a bit of hypothesizing. Did the weather affect beer sales? Did that
latest marketing campaign impact sales?
3. Predictive analytics moves to what is likely going to happen in the near term. What
happened to sales the last time we had a hot summer? How many weather models predict a
hot summer this year?
4. Prescriptive analytics suggests a course of action. If the likelihood of a hot summer is
measured as an average of these five weather models is above 58%, we should add an
evening shift to the brewery and rent an additional tank to increase output.

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 Board of Advanced Studies
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