Tuesday, March 29, 2011
On 18 March, Prof. Dr. Jacques de Swart MBA held his inaugural lecture as Professor of Applied Mathematics at Nyenrode Business Universiteit. The title of the lecture was ‘De brug tussen wiskunde en boek houden’ (Maintaining the bridge between mathematics and bookkeeping). The Chair was established by PwC, where Jacques de Swart works as a consultant with the Advisory Group and as Director of the Quantitative Analysis Group. He is also a member of the Statistical Auditing Steering Group of the Limperg Instituut.
From left to right: Dean Prof. Dr. Leen Paape,
Prof. Dr. Jacques de Swart, Rector Magnificus
Prof. Dr. Maurits van Rooijen (photo by Kees
Klaasse)
Why is applied mathematics important to accountants and controllers?
De Swart: “The ever-growing data streams in organizations are becoming increasingly difficult to digest for anyone who has not had a scientific or data-oriented education. Accountancy practices and controllers are increasingly aware that they need to do something about this. There has to be innovation in this field, otherwise an error might be overlooked that could have been discovered by means of an intelligent query in the data files. To that end, it is necessary to bridge the gap between mathematics and bookkeeping (in the broadest sense).”
How do you intend to create a bridge between mathematics and bookkeeping?
De Swart: “A huge amount of work remains to be done because mathematics is not the most popular subject. I have been teaching statistics and quantitative methods at Nyenrode (formerly NIVRA-Nyenrode) for about nine years now and students find it quite a difficult subject, so the first years were hard work for me. I stood before the class like some kind of policeman because I wanted to make sure that they passed their exams. But now I employ a different approach and try to get the mathematics across to the students by employing rather more empathy in my style. As teachers and managers at Nyenrode, we have recently become acquainted with the ‘appreciative inquiry’ method within the framework of the 'De Luiken Open' (Opening the Shutters) program. That has a very nice parallel with conveying mathematics to students.”
‘Appreciative inquiry’... what is that?
De Swart: “ ‘Appreciative inquiry’ is based on the idea that you tell stories about when things went well. You then look to see how you can multiply these success stories rather than constantly saying "You are doing this wrong; do it better next time". You learn from mistakes, but you develop from successes.”
“A good example is the case of an airline. Initially, it had defined a project in terms of “How can we reduce the number of items of lost luggage, and thereby reduce the number of claims?” That is the classic approach. Using appreciative inquiry, the question became “How can we create a fantastic arrival experience for our customers?” That was very inspiring.”
How do you use appreciative inquiry in your lessons?
De Swart: “The approach is to ask the students “On what occasions have you seen statistics used effectively in practice?” In every class you will find someone who has a positive experience of this. For example, in a class for controllers there was someone who worked for the Rotterdam municipality. There had just been a complete recount of the votes in the municipal elections. There was a discussion about whether that was really necessary. Would it have been more useful to simply process a sample? When you take into account the chance of error and look at the difference in votes that was relevant in order to modify the distribution of seats, you suddenly realize that statistics can have a significant input.”
On 18 March, Prof. Dr. Jacques de Swart MBA held his inaugural lecture as Professor of Applied Mathematics at Nyenrode Business Universiteit. The title of the lecture was ‘De brug tussen wiskunde en boek houden’ (Maintaining the bridge between mathematics and bookkeeping). The Chair was established by PwC, where Jacques de Swart works as a consultant with the Advisory Group and as Director of the Quantitative Analysis Group. He is also a member of the Statistical Auditing Steering Group of the Limperg Instituut.From left to right: Dean Prof. Dr. Leen Paape,
Prof. Dr. Jacques de Swart, Rector Magnificus
Prof. Dr. Maurits van Rooijen (photo by Kees
Klaasse)
Why is applied mathematics important to accountants and controllers?
De Swart: “The ever-growing data streams in organizations are becoming increasingly difficult to digest for anyone who has not had a scientific or data-oriented education. Accountancy practices and controllers are increasingly aware that they need to do something about this. There has to be innovation in this field, otherwise an error might be overlooked that could have been discovered by means of an intelligent query in the data files. To that end, it is necessary to bridge the gap between mathematics and bookkeeping (in the broadest sense).”
How do you intend to create a bridge between mathematics and bookkeeping?
De Swart: “A huge amount of work remains to be done because mathematics is not the most popular subject. I have been teaching statistics and quantitative methods at Nyenrode (formerly NIVRA-Nyenrode) for about nine years now and students find it quite a difficult subject, so the first years were hard work for me. I stood before the class like some kind of policeman because I wanted to make sure that they passed their exams. But now I employ a different approach and try to get the mathematics across to the students by employing rather more empathy in my style. As teachers and managers at Nyenrode, we have recently become acquainted with the ‘appreciative inquiry’ method within the framework of the 'De Luiken Open' (Opening the Shutters) program. That has a very nice parallel with conveying mathematics to students.”
‘Appreciative inquiry’... what is that?
De Swart: “ ‘Appreciative inquiry’ is based on the idea that you tell stories about when things went well. You then look to see how you can multiply these success stories rather than constantly saying "You are doing this wrong; do it better next time". You learn from mistakes, but you develop from successes.”
“A good example is the case of an airline. Initially, it had defined a project in terms of “How can we reduce the number of items of lost luggage, and thereby reduce the number of claims?” That is the classic approach. Using appreciative inquiry, the question became “How can we create a fantastic arrival experience for our customers?” That was very inspiring.”
How do you use appreciative inquiry in your lessons?
De Swart: “The approach is to ask the students “On what occasions have you seen statistics used effectively in practice?” In every class you will find someone who has a positive experience of this. For example, in a class for controllers there was someone who worked for the Rotterdam municipality. There had just been a complete recount of the votes in the municipal elections. There was a discussion about whether that was really necessary. Would it have been more useful to simply process a sample? When you take into account the chance of error and look at the difference in votes that was relevant in order to modify the distribution of seats, you suddenly realize that statistics can have a significant input.”
Accountants and controllers have an affinity for numbers; why is there less of an affinity for math?
De Swart: “Naturally, accountants and controllers love figures, but for them it is mainly a matter of adding, subtracting, multiplying and dividing. When it comes to application in practice, people frequently allow themselves to be led by Excel, and then you get trapped in a two-dimensional Excel way of thinking: rows and columns.”
De Swart: “Naturally, accountants and controllers love figures, but for them it is mainly a matter of adding, subtracting, multiplying and dividing. When it comes to application in practice, people frequently allow themselves to be led by Excel, and then you get trapped in a two-dimensional Excel way of thinking: rows and columns.”
“That has four major disadvantages. Firstly, it is inefficient. If you have a sizeable model with a lot of data, such a spreadsheet gets terribly big. If you want to change anything, you have to drag cells around endlessly. Secondly, it is easy to make a mistake because only the creator of a complex spreadsheet understands exactly how it fits together. Thirdly, large spreadsheets quickly become unintelligible; often, only the creator knows precisely what is happening and on what assumptions this is based. The worst disadvantage is perhaps the last: that you only have access to about 10% of the mathematical tools in a spreadsheet. From a mathematical perspective there are much more elegant ways that are also much simpler! And we can teach these to our students, precisely because they have an affinity for numbers.”
Nyenrode wants to turn out ‘robust’ accountants and controllers, with more emphasis on social skills. What role can mathematics play in this?
De Swart: “In my opinion, a robust accountant is one who is not easily baffled; one who is at home in all markets. For that, he needs social skills. On the other hand, robustness means not allowing yourself to be confounded by a complex model. I still frequently see accountants and controllers who want to avoid such issues, saying “I am not trained for that; I need an IT expert or an actuary for that.” I think an accountant or controller must understand, in broad terms, what basic principles and assumptions a model involves, and also what its limitations are; whether the formulas in the application are really correct. He has to be able to confront the model’s creator on matters like this and that means he needs an appropriate education.”
What can an accountant with a knowledge of mathematics add to a business?
De Swart: “An accountant can increase his relevance if he not only reduces his own audit risk but can also offer unexpected insights. And also, if he is trained to see more, thanks to the fact that he looks at things from a fresh angle and because he is a better specialist than the client himself. That means you need mathematics. On the one hand, it will enable you to use an intelligent model to display unexpected connections, but also, used properly, you will be able to use it to turn it into an insight that you can share even at board level: ‘turning bytes into insights’. So instead of doing your mathematics in an ivory tower, you must always translate your findings into the context of the company.”
Nyenrode wants to turn out ‘robust’ accountants and controllers, with more emphasis on social skills. What role can mathematics play in this?
De Swart: “In my opinion, a robust accountant is one who is not easily baffled; one who is at home in all markets. For that, he needs social skills. On the other hand, robustness means not allowing yourself to be confounded by a complex model. I still frequently see accountants and controllers who want to avoid such issues, saying “I am not trained for that; I need an IT expert or an actuary for that.” I think an accountant or controller must understand, in broad terms, what basic principles and assumptions a model involves, and also what its limitations are; whether the formulas in the application are really correct. He has to be able to confront the model’s creator on matters like this and that means he needs an appropriate education.”
What can an accountant with a knowledge of mathematics add to a business?
De Swart: “An accountant can increase his relevance if he not only reduces his own audit risk but can also offer unexpected insights. And also, if he is trained to see more, thanks to the fact that he looks at things from a fresh angle and because he is a better specialist than the client himself. That means you need mathematics. On the one hand, it will enable you to use an intelligent model to display unexpected connections, but also, used properly, you will be able to use it to turn it into an insight that you can share even at board level: ‘turning bytes into insights’. So instead of doing your mathematics in an ivory tower, you must always translate your findings into the context of the company.”
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