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We have often stated in this blog that the role of the accountant is changing. This change is heavily driven by new achievements in technology like cloud computing that enable anytime-anywhere access to decision-relevant data. At the same time, businesses acquire a plethora of data about their customers – so much data that professionals need the knowledge, skills and tools to excavate what is relevant, and what is not. As accountants, we should be in the middle of this “data excavation site”, handling this data mine to discover its treasures. This ACCA article argues that the finance profession (including accounting) needs to extend its reach and apply its core skills of gathering, manipulating and providing relevant information to a much larger data set. To enable accountants to do so, they will need to be the link between the IT department running the tools that enable real-time analytics of big data, and the business that needs to make sense of the results and put it in a strategic context. This will add skills to accounting that include data analytics and software engineering, leading to a hybrid role of accountants in the future.
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)