AAFCPAs Explains Descriptive, Predictive, Prescriptive, and Compliance Data Analytics

Posted on October 12, 2020July 21, 2021

Key Business Questions (KBQs) are questions that establish a framework for an organization looking to gain insights produced by analytics. They are central to understanding the past and overall strategy you are deploying or considering deploying in the future.

AAFCPAs assists clients in defining and prioritizing high-value KBQs in order to bridge the divide between insight and business value.

Analytics options may be categorized at a high-level into the following distinct types:

Descriptive (Historical) analytics provide insight into the past and answer KBQs related to: “What happened?” Analysts interpret and parse historical data to better understand changes that have occurred in a business over a set period. Financial metrics, such as year-over-year pricing changes, month-over-month sales growth, the number of users/constituents served, or the total revenue per subscriber, are common examples of descriptive data.
Predictive analytics provide insight into the future and answers KBQs related to: “What will happen?” Analysts utilize predictive analytics to forecast buying patterns, potential risks, and likely opportunities. Common uses of predictive analytics may include optimizing marketing campaigns, improving operations, and reducing risk.
Prescriptive analytics provide insight into possible outcomes and answer KBQs related to: “What do we need to do to make things happen?” Analysts utilize data and hypothetical actions/situations to model a series of possible outcomes. They then illustrate actionable paths that could lead to these outcomes. This helps businesses identify the optimal path to a desired outcome.
Compliance analytics provide insight on how well an organization conforms to relevant laws, policies, and regulations. Analysts utilize data to ensure organizations are within tolerance of applicable contracts or statues. In highly regulated, high-risk industries like healthcare and finance, compliance is especially important. However, all businesses can leverage compliance analytics to prevent noncompliance and fraud before damages occur.

Once KBQs are defined and prioritized, AAFCPAs provides guidance on defining the appropriate metrics, or key performance indicators (KPIs), that will inform your decision making. Then, we extract, inspect, cleanse, and model the data to assist clients in making more confident business decisions that drive operational efficiency.

Does your data provide actionable insights?

AAFCPAs designed a quick survey in collaboration with the Financial Executives International (FEI) Boston Chapter to capture how CFOs are leveraging data to answer key business questions (KBQs) and drive strategic business improvements. CFOs: Take the survey.>>

We encourage you to take this 4-5 minute survey for the following reasons:

Enter to win a $250 donation to your nonprofit charity of choice.
Consider your Key Business Questions and their potential to impact the business.
Evaluate your data inventory and processes around data collection.
Learn how other CFOs are leveraging data to provide actionable insights.

If you have questions, please contact James Jumes, MBA, M.Ed. at jjumes@nullaafcpa.com, 774.512.4062; Vassilis Kontoglis, at vkontoglis@nullaafcpa.com, 774.512.4069; or your AAFCPAs Partner.

About the Authors

Vassilis Kontoglis

Vassilis is a leader in AAFCPAs’ Business Process & IT Consulting Practice. He has 20+ years’ proven experience providing business intelligence, productivity, information risk management, and cybersecurity solutions. He is a critical resource in keeping clients and the firm on the forefront of transformative technologies while mitigating risks that come along with these advancements. Vassilis leads the delivery of Robotic Process Automation solutions at AAFCPAs. He understands the unique requirements to achieve RPA success, including proper design, planning, implementation, and governance. He works collaboratively with clients and cross-functional teams, and leverages his deep understanding of enterprise information systems, business logic, and structured inputs to automate rote processes and increase operational efficiency. Vassilis is also the leader of AAFCPAs’ automation center of excellence (CoE), an internal team that streamlines automation output, provides structure, and helps scale automation through the firm.

James Jumes, MBA, M.Ed.

James joined AAFCPAs in 2013 to lead the Business Consulting Services practice. He has more than 25 years of experience working with information technology systems and diverse business operational processes. James is highly experienced in IT controls and assurance, SOX 404, and Service Organization Control (SOC) reports: SOC 1 (SSAE 18), SOC 2, SOC 2+ and 3 attestation reporting. James developed a unique methodology to delivering SOC reporting services, and he is an AICPA-approved Peer Review SOC Specialist, assisting peer review teams to review SOC 1, 2, 2+ and 3 engagements. He is a HITRUST Certified Common Security Framework (CSF) Practitioner, providing HITRUST CSF self-assessment consulting, or SOC 2 + HITRUST for assessing against the evolving compliance landscape shaped by HITECH, HIPAA, CMS and various other federal, state and business requirements.