This week’s episode of Conversations with Kip deals with the computer efficiencies that can be gained through consistent data structures.
Analytical processes typically aggregate or combine data in some way. To understand our spending over time, we have to accumulate spending. If the format of each expense record is different, logic will have to be applied to each one to find the common fields needed to analyze the total data. Much greater efficiency is possible if the data structures are consistently.
The slide above was developed on a large project to explain how a universal ledger could be constructed which included a comprehensive view of the enterprise. Using these consistent structures increased the level of detail the system could manage to be in the hundreds of millions of postings in approximately one hour.
Every major enterprise ultimately puts all financial data into a consistent structure, because every transaction is accumulated into the enterprise financial statements. Using this concept earlier in the financial system can increase consistency, and analytical capabilities. It can become like a great central shaft supporting a skyscraper. It’s time to stop premature ledger aggregation, and use the computing power available today.
Watch all episodes in order at the Conversation with Kip playlist