The management accountant as cloud herder Part 2
It has been suggested that “management accounting” as a label is redundant (Otley, 2008), and that the management accountant as a role (or management accounting as a set of tasks) is moving away from counting beans and crunching numbers to an in-house consultant on operational and strategic topics and decision-making, even a business partner (Weber, 2011). In other words, they should help make sense of the information and advise the decisions that based on our textbook-knowledge the managers should take based on what management accountants provide them. I would claim that based on this, the management accountant is assumed to take a “grey eminence” position as a powerful advisor to the managers.
Now based on our own survey, as stated by Martin Quinn on his IMARN-blog, “a substantial number of respondents (40%) noted that managers use tablets and smartphones to obtain information for decision-making”. That means that managers (with or without knowledge of the management accountant) are able to make quicker decisions by obtaining decision-relevant information with a tap or a swipe, using anytime-anywhere technology like tablets and smartphones, powered by wifi and broadband. The easy access to cloud technology and the generation of so-called “big data” thus enables managers to bypass the management accountant. If their role was not to take another dent, management accountants will need to re-define themselves as quickly as the technological cycles go, on a permanent basis. They will need to be more than “just” business partners – they need to be IT-savvy knowledge workers (Bontis, 2011), experts in handling of big data, and “cloud herders”, up-to-date with technological developments that may impact how management decisions can be improved and supported. Management accounting will need to accept the responsibility to develop the IT procedures so the technology is able to provide information at a finger’s tap.
This would determine a strong impact on the discipline of management accounting itself – the toolbox of instruments like budgeting, break-even or variance analysis will not only need an overhaul but also an extension. Even practice will have difficulties keeping up with all these requirements due to the sheer pace of technological change and “information bombardment” that needs to be turned into corporate gold.
And where is academic research in all of this, with their overly long publishing cycles, cumbersome dissemination procedures and penchant for “theory first, practice later”? The number of publications in accounting and finance journals that deal with the aforementioned technologies (and their impact) is low. Closing the research – practice gap anyone? I might have a theory for it.
Bontis, N. (2011), “Information Bombardment: Rising Above the Digital Onslaught”, Institute for Intellectual Capital Research, Canada
Otley, D. (2008), “Did Kaplan and Johnson get it right?”, Accounting, Auditing and Accountability Journal, vol. 21, no.2, pp.229-239
Quinn, M. (2013). Researching information technology and management accounting change – some researchers thoughts. [Blog] IMARN. Available at: http://imarn.org/2013/01/28/management-accounting-change-and-information-technology-some-researchers-thoughts/ [Accessed 19 May. 2014].
Weber, J. (2011), “The development of controller tasks: explaining the nature of controllership and its changes”, Journal of Management Control, Vol. 22, Iss. 1, pp.25-46
The management accountant as cloud herder Part 1
Technological change has impacted and shaped society for ages – from the first use of a tool to the first abacus up to steam power and the computer. That is nothing new, and I have yet to find the person to contest it.
Hand in hand with technological change came the craving to codify information generated – arguably, the quicker the technological change, the more information generated. That means information about EVERYTHING. One of the main drivers was undoubtedly IT and computer technology, but only since the world wide web became fast and affordable to the masses (and businesses), the flow of newly generated information and data is mind-blowing. According to Nick Bontis from McMaster University in Hamilton, Canada, everything we know and wrote down on a stone, papyrus or in a Word document – or as he calls it “cumulative codified information base” doubled every 30 years when evaluated in the 1930s, every 7 years in the 1970s, in the future we can expect that everything we know and wrote down doubles every 11 hours (Bontis, 2011). Even from our own experience as part of the world wide web, email and social media we can tell that we have no way of keeping up even with everything that lies in the sub-set of “interesting to me”.
Now it is safe to say that businesses have always produced massive amounts of data, from ledgers in the 15th century to customer data used and employed by the likes of Google, Amazon or Facebook. Data from transactions, patterns in customer behaviour, market reactions, costs and prices – it goes on and on. The assumption is thus not far-fetched that businesses as part of our culture and society are at least not slower in codifying new information.
To managers, that information is key to decisions they need to make on various bases, from daily, short-term to strategic, long-term ones. In order to do this – and so we learn and teach and assume – the management accountant is the role that is responsible in order to gather, process and provide this decision-relevant information to the managers. Looking in any textbook, however modern, shows that this is still the basic assumption what the management accountant is and does.
(Continued in part 2)