In the second part of this mini-series on digitization and digitalization, I would like to highlight the connection between digitization, digitalization and accounting information systems (AIS). This connection is nothing new in modern AIS that are typically computerized, i.e. business processes are reflected on a digital basis. The collecting, processing, storing and outputting of accounting information is at the heart of any AIS, to enable crucial tasks like financial reporting or management decision-making.
It is (almost) obvious how digitization plays a role in this. The conversion of paper receipts, bills of materials, or other relevant documents into the AIS is an ongoing task. It is also a major undertaking if a company implements a modern AIS – decisions need to be made what type and range of relevant documents need to be digitized (converted into binary form) and transferred into the AIS, so that the data does not get corrupted in the process. Clearly, the focus here is on the technical side of the AIS. The accountant is of particular importance here, since it is part of his/her job description to be in charge of corporate information. Ideally, the accountant is also a major contributor to the design, implementation and maintenance of the digitization processes here, linking management needs to IT capabilities.
Digitalization is now directly linked to the purpose of AIS. The latter’s purpose as stated earlier in this post (collect, process, store, output accounting-relevant information) is clearly in line with leveraging digital technologies to enable, improve, transform, and support business processes and decision-making (see Part 1 of this mini-series). Designing, implementing and running an AIS can at the same time support a rethinking of a business’s current processes and operations, and as such, turn it into decision-relevant information. In other words, AIS can enable digitalization processes in a business. Again, this bears important implications for the accountant who as main information hub should enact his/her influence on the digitalization process to achieve the business’s objectives.
In a nutshell, digitized accounting information needs to enter the AIS which in turn is a leveraging technology to support the digitalization of the business. And this had, has, and will have a major impact on the role of the accountant in businesses in the future. I will discuss this aspect in the third part of this mini-series.