Xero investigates Big Data

Company looks to mine information from $150 billion worth of transactions

SaaS accounting company Xero has started its journey into the world of Big Data.

The company has now processed more than $150 billion worth of transactions, says CEO Rod Drury. All those transactions generate huge amounts of data from individual businesses that is brought into one centrally managed cloud storage environment.

“One of the big benefits of that is that you get fantastic insights into what is really going on, on an almost real-time basis,” says Drury.

“It would be very valuable to our customers if we could give that insight back to them, so that they can use it to improve their businesses.”

Xero is working on a number of Big Data-type projects at the moment, he says. The company has been doing the preparation work for the last two years. By standing up a parallel BI environment next to the transactional databases, the team expects to start “unlocking” the information in thousands and thousands transactions over the next year, Drury says.

To make the system successful, a few things have to happen in parallel – you have to capture the data, clean the data up so you can get useful information out of it, and also make people comfortable about sharing their data, he says.

“Our plan is to be able to demonstrate to [our customers] that we can give them insights that are valuable to them,” Drury says.

The system has to operate on an opt-in basis, because it is the customers’ data, he adds.

Among the benefits to customers would be benchmarking groups to monitor how their business is doing in the context of other similar businesses; visualising seasonal trends; and calculating the average number of days that it takes before invoices are paid. From a wider perspective, the data would give “interesting insights” into small business in general, Drury says.

The company is getting some “reasonable data sets” now, and is currently building the architecture to be able to ask the right questions, he says. Xero’s Big Data team has been able to use some existing tools, but Drury is also evaluating tools from a vendor and “keeping an eye on new technologies in this space”.

Finding staff with the right skills is not a problem, according to Drury.

“A lot of developers in New Zealand would love to get to play with Big Data but the volume of data just hasn’t been there, because businesses aren’t that big,” he says.

With135,000 customers, each with thousands of transactions, Xero is starting to get some big data sets that its team can play with.

“Our team is pretty excited about finally having enough data,” he says.

The main challenge is to build confidence in the community and make organisations comfortable about sharing their data, he says. However, a lot of accountants are asking for benchmarking, so the benefit is well understood, he says.

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