Data analytics and data visualization has been a hot topic for IA functions for a number of years. However, many IA functions have focused on using analytics only during the planning and execution of audits. Forward-looking IA functions are now leveraging data analytics to provide insights during the IA risk assessment process as a way to influence the nature of the audit plan and scope of specific audits.
IA functions are also using data visualization tools to aid in incorporating quantitative elements into the risk assessment process. These data sets are synthesized and visualized into “risk dashboards,” which are then leveraged to help IA functions maintain an understanding of key performance metrics, changes in the business and changes in the risk profile.
Progressive IA functions are beginning to introduce prescriptive analytics, thereby determining which decision or actions will produce the most effective results against a specific set of objectives and constraints. Tools for prescriptive analytics include optimization, business rules automation, and real-time learning decision models, which can be used on a continuous basis to identify key risks or red flags.
To drive insight, start small (e.g., analytics for a function, division or process vs. an entire business unit) and get a few quick wins with the data analytics program. For instance, identify the one or two divisions or processes where descriptive or predictive analytics can be deployed and then expand from there. Then look for ways to further advance your use of data analytics – for example expansion into other business units, increased complexity and customization.