It may not only affect the digital landscape of the organization and the associated business models, but also management accounting and control practices as well as the role of the controller. In outlining similarities and differences in the production of management accounting information from aural to digital cultures, it argues that while the effects of the digital revolution on management accounting and decision-making are still unclear, these effects surely (and hopefully) will not deliver the dream of perfect information and rational decision-making as one may be lead to believe by the growth of data-driven organizations and societies. What are preconditions for self-controlling and self-reporting solutions? Where and how does digitalization affect the finance function? In addition, only in a minority of observations business analytics is used for financial planning and analysis. How should a digitalized finance function be structured by means of processes, responsibilities, and IT resources? Internal service providers tend to be deprioritized, resulting in the finance function being a relative latecomer as far as digital transformation is concerned. Historically, the finance and accounting teams have been early adopters of technological tools because they already rely on high-level IT to optimize business processes and interactions. Possible research questions include: What will be the impact of specific digital techniques on particular finance function processes? Impact of business analytics and enterprise systems on managerial accounting. M.P. The digitalization will require company cultures, which are digitalization friendly. The AI Revolution Has Begun. In addition, new information routines might lead to a more decentralized, self-service-based reporting and decision-making environment that may change the nature of control as well as the role of controllers. Möller, K., Schäffer, U. Frey, C. B., & Osborne, M. A. Ross, J. W., Beath, C. M., & Sebastian, I. M. (2017). ): Controlling und Unternehmensführung, Bern, 28–40. Download Research . We thank all contributors, reviewers, and especially the managing editor of the Journal of Management Control, Prof. Dr. Thomas Günther, for supporting this special issue. (2019). McKinsey. In the first survey, the average difference between the perceived importance of the top ranked controlling trends in 2011 and the importance expected in five years from then was 0.39 points (on a 7-point Likert scale). INSURANCE !! It may not only affect the digital landscape of the organization and the associated business models, but also management accounting and control practices as well as the role of the controller. In U. Schäffer (Ed. Acccessed 26 Mar 2020. Although quite a few papers have been published in this area since then and authors such as Moll and Yigitbasioglu (2019) as well as Rikhardsson and Yigitbasiglu (2018) have provided overviews of the literature, we still observe that digitalization is only about to enter the scholarly debate. Findings. Complete automation will likely only be effective in niches with clearly defined and understood processes. This makes working in a team very easy. George, G., Haas, M., & Pentland, A. ScienceDirect ® is a registered trademark of Elsevier B.V. ScienceDirect ® is a registered trademark of Elsevier B.V. Management accounting goes digital: Will the move make it wiser? They conducted three studies on the future of controlling (2012, 2015, and 2018a). Research students are invited to attend a course in Digitalization and Accounting, equivalent to 5 ETS points. Schäffer, U., & Weber, J. The Nordic PhD program in Management Accounting organizes the … We build upon the literature on digitalization in management accounting and draw upon the pragmatic constructivist methodology to understand how digitalization takes place at the individual actors' level in accounting practice. In addition, traditional capital budgeting or investment control approaches might be inadequate in the context of exponential growth fueled by digital products, platform strategies, and network economies. ), Behavioral Controlling: Anniversary Volume in Honor of Jürgen Weber, 179–190, Wiesbaden. What are effective strategies for competence building, transfer, and governance? Some companies have already introduced data analytics and automated forecasting technologies, using (or combining) time series techniques, machine/deep learning, and/or simulation. Let’s study the subject matter further: A quick look at the stats. Most of the papers are largely conceptual (e.g. De gevolgen van technologie voor de financiële functie: een analyse op verschillende niveaus. CFO or chairperson of the management board. This is reflected in the third WHU study on the future of controlling as well as a further study Schäffer and Weber conducted, namely the first WHU digital pulse check (Schäffer & Weber, 2018b). McKinsey, 2018; Deloitte, 2020). https://doi.org/10.1007/s00187-020-00300-5, DOI: https://doi.org/10.1007/s00187-020-00300-5, Over 10 million scientific documents at your fingertips, Not logged in Some of the found results are: digitization will give accounting companies digital accounting tools, knowledge sharing and communication channels. Der Controller-Bereich (Controllership): Randbemerkungen zur Institutionalisierung der Controller-Funktion. Software can quickly access source data and apply tax calculation rules. That has many implications. Then we enlarge the perspective on the overall control system in two articles with a more holistic approach: Thorsten Knauer, Nicole Nikiforow and Sebastian Wagener deal with information systems, but on a more abstract level, by analyzing determinants of information system quality and data quality. Key challenges include identifying and adequately applying appropriate techniques and drivers, and—even more importantly—the right combination of ‘(wo)man and machine’ in the application process. 7. Oesterreich, T. D., Teuteberg, F., Bensberg, F., & Buscher, G. (2019). Accounting, accountability, social media and big data: Revolution or hype? And the effect of digitalization on management accounting practices. Finally, Gianluca Vitale, Sebastiano Cupertino and Angelo Riccaboni show the interplay between formal and informal control systems, influenced by big data based on a case study. Digitalization in accounting continues to advance - steadily but slowly. Technological Forecasting and Social Change,114, 254–280. Digitalization in management accounting and control: an editorial, https://www2.deloitte.com/nl/nl/pages/strategy-analytics-and-ma/articles/finance-in-a-digital-world-crunch-time-for-cfo.html, https://www.gartner.com/en/information-technology/glossary/digitalization, https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/memo-to-the-cfo-get-in-front-of-digital-finance-or-get-left-back, https://doi.org/10.1016/j.accinf.2019.100432, http://creativecommons.org/licenses/by/4.0/, https://doi.org/10.1007/s00187-020-00300-5. The views expressed are those of the presenter and, therefore, do not necessarily represent the views of either the Council or any Committee(s)/ Board(s) of the Council of the Institute of Chartered Accountants of India (ICAI). Schäffer, U., & Weber, J. Business intelligence and analytics in management accounting research: Status and future focus. What is the impact of digitalization on the roles of controllers? (2020). https://www2.deloitte.com/nl/nl/pages/strategy-analytics-and-ma/articles/finance-in-a-digital-world-crunch-time-for-cfo.html. According to respondents, controllers and data scientists work closely together in only 17% of companies in the sample of the WHU digitalization pulse check (Schäffer & Weber, 2018b). Digitalization will radically change controlling as we know it. However, most controllers are not inherently competent in this area. (2017b). Big data: the management revolution. The risk of digitalization for accountants is due to the increasing application of affordable commercial software that automates the workflow processes of the monthly, quarterly and fiscal year-end accounting close. According to the World Economic Forum, digitalization in the mining, minerals, and metals industries has the potential to deliver over $425bn in shareholder, customer and environmental value by 2025. Digital transformations in accounting also help in group management. This essay places current fascinations with the digital revolution into the historical and cultural contexts that have intertwined with the evolution of management accounting as a practice involved in the production of knowledge for decision-making. Management Accounting Competencies: Fit for Purpose in a Digital Age? Kolthof et al., 2017b; Schäffer & Brueckner 2019). https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/memo-to-the-cfo-get-in-front-of-digital-finance-or-get-left-back. Why should this be any different in the case of digitalization? Most finance functions in large companies are not as advanced in their digitalization efforts as the commonplace c-suite rhetoric and the high expectation of change might suggest. Deloitte. Schäffer, U., & Matlachowsky, P. (2008). How can drivers for planning, forecasting, and simulation be identified, used, categorized, analyzed, and optimized? Accessed 26 Mar 2020. Much of this value will come in the form of operational effectiveness, increased productivity, faster decision-making, and enhanced safety. - 204.15.248.77. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/. Schäffer, U., & Weber, J. Effects of digitalization on management control In the past decade firms have gone through tremendous changes in their information technologies, organizational designs and competitive environments. The Ph.D. Project. Management accounting goes digital: will the move make it wiser? Bhimani & Willcocks, 2014; Quattrone, 2016; Arnaboldi, Busco, & Cuganesan, 2017a, b; Appelbaum et al., 2017), with some case studies (Arnaboldi, Azzone, & Sidorova, 2017a, b) and empirical analyses (Labro et al., 2019; Oesterreich et al., 2019). 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