Changing the speed and format of information provision
Examining the temporal decoupling of accounting numbers and their analysis
Introduction
Managers are “people who make decisions about a business, department, […], etc.” (Merriam-Webster Online Dictionary, n.d.) and communicate information to internal and external stakeholders (Barnard, 1938). For those purposes, they rely on managerial information provided by various sources (McLeod and Jones, 1986; Jones et al., 1989) such as management accountants. Historically, management accountants have been recognized by scholars as crucial sources of information due to their prominent professional role (Burns and Baldvinsdottir, 2005). This role has undergone a major shift over the last decades, as several studies have observed (e.g. Granlund and Lukka, 1997): from “bean counters”, who primarily gathered historical data and measured past performance, to internal consultants or “business partners”, who provide more in-depth insights such as analytical interpretation and scenario analyses (Atkinson et al., 2012; Hansen and Mowen, 2007; Siegel et al., 2003). This development was primarily facilitated by innovations in information technology (IT) during the 1990s (Booth et al., 2000; Sánchez-Rodríguez and Spraakman, 2012; Scapens and Jazayeri, 2003). Information systems (IS) that were up and coming at the time, such as enterprise resource planning (ERP) systems, made it possible to harmonize multiple stand-alone systems across different functions into a single organization-wide system (Spathis and Ananiadis, 2005; Davenport, 1998). This new opportunity empowered management accountants to develop holistic digital representations of organizations; consequently, they were able to provide managers with more recent, accurate and in-depth analyses (Sánchez-Rodríguez and Spraakman, 2012).
Now, circa 20 years later, another surge of innovation in the IT industry is taking place (Stodder et al., 2015). State-of-the-art AIS are taking advantage of in-memory technology, which promises real-time data processing and the automation of more sophisticated analyses (Stodder et al., 2015). This increase in speed means that accounting numbers can be continuously and instantaneously available rather than – as common in current reporting practices – only at the end of a period (typically month end). Consequently, this challenges the relevance of period deadlines at which management accountants provide information. Furthermore, the format of how information is displayed offers new opportunities by replacing inflexible graphs and extensive tables of figures with interactive visualizations (Dilla et al., 2010), which makes dealing with accounting numbers more intuitive (Stodder et al., 2015). Interactive visualizations provide the possibility to “amplify cognition or the acquisition and use of knowledge” to a more expansive group of people (Card et al., 1999, p. 6). Due to such improvements in usability, management accountants and, in particular, non-accounting experts such as managers can grasp accounting numbers with less difficulty. In this way, managers can be empowered to perform analyses themselves to gain insights about the business. Thus, technologically-advanced AIS may – like their predecessors, the ERP systems – facilitate another change in management accounting. In particular, it can result in a transfer of previous accounting activities to managers, which could, on the one hand, threaten the role of management accountants as the primary providers of accounting information but, on the other, strengthen their role as business partners within the organization (cf. Caglio, 2003) and, subsequently, allow more time for more profound analyses. Therefore, we addressed the following research question: How can the opportunities that AIS provide affect the process of providing managers with information relevant for decision-making and what role do management accountants play therein?
To address the study’s aims, empirical evidence was collected and analyzed from an in-depth case study in a multinational organization. Its management accounting department had been distinguished by an international consulting firm as the most efficient and effective among their peers. The organization attributed the success to their technologically-advanced AIS, which exploited opportunities of increased speed when providing information as well as new interactive formats to visualize that information. Methodically, data was gathered from semi-structured interviews, observations and internal documents, and was analyzed based on a thematic coding (Flick, 2014). Our analysis showed that faster data processing led to a temporal decoupling of accounting numbers and their corresponding analysis. Although faster and automated data processing allowed for the generation of accounting numbers in real-time – thus making them available on a continual basis – the analysis of such information still required preparation time. In this context, we could observe changes in both management accountants’ and managers’ work as well as in the interaction between managers and management accountants that resulted from that temporal decoupling.
On the part of the management accountants, the automated data generation saved time, which they then used for more profound analyses as well as the analysis of issues arising from ad hoc events. Because of this, management accountants were able to develop a better understanding of the business and strengthen their role as business partners in the organization. On the part of the managers, it became evident that the new interactive formatting opportunities translated into a temporal decoupling of accounting numbers and corresponding analyses. This was because the intuitive and interactive visualizations enabled managers, as non-accounting experts, to grasp and interpret accounting numbers on a daily basis without having to wait until month’s end to receive accounting numbers. Consequently, managers were more concerned with the accounting numbers and developed a better understanding of the business. Nevertheless, in addition to managers’ individual analysis of accounting numbers, management accountants still provided comprehensive analyses at month’s end. Despite this temporal decoupling, managers and management accountants in our case described the associated discussions as more intense as their focus changed from conferring about what the status of the business actually is to discussions about the underlying reasons for the provided numbers as well as solutions to related problems.
In the remainder of this chapter, we will first review the literature on management accountants’ tasks and then discuss both how a shift in the ratio of these tasks were enabled by new information technologies as well as recent developments of information technologies that could cause another shift. Subsequently, we will describe the empirical setting and the applied data collection and analysis in the method section. Finally, we will present our empirical findings and a concluding discussion.
Literature review
Management accountants provide managers with decision relevant information (Byrne and Pierce, 2007), which is why they are entrusted with several tasks that can be categorized into three areas: transaction processing, reporting and decision support (Booth et al., 2000). Transaction processing refers to data preparation, which includes entering, collecting and cleansing raw data (cf. Madsen, 1963). Reporting builds upon this raw data to account for past developments and the status quo (Madsen, 1963). Finally, to support decisions both historical and future-related information is considered in the form of forecasts and evaluated options for actions (Madsen, 1963; Stodder et al., 2015). These three fields have been supported in varying degrees by IS and, in particular, AIS (Granlund and Mouritsen, 2003).
The dependency of organizations on IS (including AIS) has grown over the last decades, thus forcing IT managers to improve the quality of IS (Gorla et al., 2010). The further standardization and automation of already integrated IS has led to an even stronger harmonization of systems across functions (Spathis and Ananiadis, 2005; Davenport, 1998). Based on this, AIS were able to effectively support management accountants in their transaction processing tasks (Granlund and Malmi, 2002). The harmonization of systems principally affected the collection, entry and cleaning of raw data, thus increasing the quality of the output and thereby automating previously manual tasks (Scapens and Jazayeri, 2003). The reduction of manual tasks again led to several benefits (cf. Shang and Seddon, 2000, 2002) – in particular, efficiency gains (Granlund, 2007; Burns and Baldvinsdottir, 2005). This increase in transaction processing efficiency (Grabski et al., 2011; Vakalfotis et al., 2011) allowed management accountants to put more effort on analyses for reporting and decision-support (Granlund and Malmi, 2002). The role of the management accountants then tilted towards internal consultancy (Anastas, 1997). In addition, management accountants had to develop IT competencies to design and manage the related information flows of IS (Caglio, 2003), meaning that they also took over tasks that traditionally belonged to the IT department. Although this, in sum, led to improvements in data collection, Fahy and Lynch (1999) have found that spreadsheets were still used to generate analytical explanations and handle managers’ unpredictable information demands. In other words, reporting and decision support have seen only modest direct benefits from AIS in the last decades.
Recent technology, used in AIS, aims to further standardize and automate tasks (Stodder et al., 2015) in reporting and decision support in order to achieve efficiency gains in these areas, as well. Thus far, management accountants have provided information to aid managers in their problem-solving and decision-making activities. However, the technological changes make it worthwhile to review how managers’ capabilities to succeed in these tasks are affected by different presentations of information. Ramarapu et al. (1997) have found that IS that present information in a strict linear sequence are inferior to IS that allow users to follow their own logic of connecting the information. Their reasoning is based on cognitive fit theory (Vessey, 1991), which argues that a pre-set sequence fits the specific cognition of the user less well and is therefore more challenging to understand (Bush, 1945; Shneiderman and Kearsley, 1989). These findings emphasize the need for possibilities to break through a sequence and go back and forth to better mirror managers’ cognition. Regarding management accounting information and the visualization thereof, interactive dashboards with hyperlinks can thus be considered favourable to PowerPoint decks that present information sequentially. Furthermore, these dashboards rely on graphical visualizations that facilitate the encoding of information (Stodder et al., 2015). The reason being that even when visualizations contain the same information as tables, they better fit managers’ cognition, which subsequently increases decision-making quality (Hirsch et al., 2015) by enabling them to be more accurate (Umanath and Vessey, 1994) and efficient (Huang et al., 2006). Consequently, research suggests that changes in AIS that incorporate features that are more aligned with the requirements of managers as final recipients may again change the role of management accountants and their interaction with managers.
In addition, with a stronger consideration of managers, organizations must also deal with an increasing proportion of unstructured data (i.e. textual data) and an exponentially growing amount of data (Russom, 2011). This influx of data creates a need for greater data processing speed. In-memory technology (e.g. SAP HANA) and real-time reports are powerful technical prerequisites to address these new demands (Russom, 2011). In summary, there is a call for faster, more intuitive and recipient-specific information provision to realize the opportunity of a powerful means for understanding data (Dilla et al., 2010), which points to real-time and self-service formats.
Concomitant with the increasing importance in practice, these developments have also caught the attention of scholars (Chen et al., 2012), who have also pointed to some critical points. Hodge (2001) and Elliott et al. (2012) have found that information presented in an interactive way are perceived as more reliable and trustworthy. In other words, the possibility to interact with accounting numbers involves the risk of an overconfidence bias. This bias points to the necessity of management accountants as an intermediary to mitigate this effect (Hodge, 2001). In addition to a potential bias, what are further consequences of the implementation of real-time and self-service formats for the provision of information by management accountants? Scholars have argued that the analysis of accounting numbers is more valuable than the pure provision of accounting numbers, as the process and argumentation that lead to the results of analysis are decisive for the quality and effectiveness of decisions (Merchant and Van der Stede, 2007). In this line of reasoning, Galbraith (1973) has questioned whether everything could be measured and represented in numbers and figures, as would likely be necessary for a self-service information provision. Similarly, Quattrone (2016) has stressed the relevance of a process of communicating, discussing and understanding accounting numbers and, thus, underlines Galbraith’s argumentation. This indicates that numbers do not speak for themselves, as they can be considered incomplete translations of reality (Chapman, 1997) and underlines the need for intermediaries to provide a more complete picture of the reality. Scholars have argued that management accountants can act as such intermediaries and enable reasonable choice (Busco and Quattrone, 2015; Quattrone, 2015). In conclusion, prior research underlines the importance of IS for management accountants and indicates various potential effects regarding the provision of information, which we will analyze in more detail in the following sections.
Method
For the empirical evidence in this chapter, we conducted a qualitative, in-depth, single-case study at PolymerCo (fictitious name), which specializes in material solutions and generated approximately €15 billion in 30 manufacturing plants worldwide in the 2013 fiscal year. The management accounting function comprises approximately 120 people, who are assigned to three different departments for each organizational business unit as well as a central department of approximately ten people. In the course of a general savings program, a team consisting of people from the business intelligence and management accounting department started an initiative to improve the provision of information within the organization in 2013. Thereupon, a new AIS, an automated dashboard solution, was implemented, which replaced the prevailing manual Excel-based calculations and PowerPoint-based slide decks. This new dashboard solution could process all organization data in near real-time and generate interactive visualizations for any aggregation level that facilitated the analysis of accounting numbers. It was accessible by both management accountants and managers in the form of aggregated accounting numbers. Since the data was directly loaded in the tool and displayed in graphs on the dashboard, it made the combination of Excel and PowerPoint obsolete. In addition to the individual use of such dashboards, management accountants and managers also shared dashboards to distribute the same accounting numbers among different people.
Data gathering started in July 2013, upon contacting PolymerCo, and ended in September 2016. To guarantee data reliability and reduce a potential informant bias (Gioia et al., 2013), a confidential agreement with PolymerCo was signed in advance (Miles et al., 2014). During the first six months, the primary objective of data collection was to become familiar with the organization, particularly the people and processes related to the dashboard solution. After this familiarization, we aimed at collecting process and interpretive knowledge of the participants (Bogner and Menz, 2009) to understand the course of actions as well as how participants perceived them. For this purpose, we conducted semi-structured interviews (Meuser and Nagel, 2009), which were held with the head of the business intelligence team (who was responsible for the implementation of the dashboard solution), eight executive managers, and eleven management accountants. The interviews were audio recorded and transcribed verbatim immediately afterwards to ensure data integrity. Some of the interviews were conducted in German. Quotes from these interviews were translated as accurately as possible in order to convey their general meaning. In addition, informal talks were documented, especially those that took place when we visited the team responsible for the operational implementation. Furthermore, observations (e.g. software presentations) enabled us to gain an understanding about how the new dashboard solution works. The content of these informal talks and observations was carefully noted (Emerson et al., 2011). Moreover, we had access to internal documents, such as reference databases and presentations, as well as a duplicate of the dashboard solution. Both documentation and experimentation helped us to gain a deeper understanding of the features and use of the dashboard solution. We began an ongoing data analysis simultaneous to data collection (Miles et al., 2014). In particular, we alternated between discussions in regular case analysis meetings (Miles et al., 2014) and cross-examinations of the gathered data. Both were based on the results of thematic coding of the data (Flick, 2014). This iterative approach allowed us to carve out conclusions regarding how the opportunities regarding speed and format affected information provision at PolymerCo.
Empirical analysis
Prior to the implementation of the new AIS, reporting and decision support at PolymerCo, according to involved management accountants, was characterized by a high degree of monthly manual work (which will be outlined in more detail later). This monthly procedure provided managers with an opportunity to directly discuss the accounting numbers and corresponding analysis with the responsible management accountants. In this way, they not only received the status of the business (represented by the visualized numbers) but also learned more about the underlying reasons due to the annotations and additional interpretations that they obtained in personal interactions with management accountants. As a result, managers could deepen their understanding of the business.
The objective pursued by PolymerCo with the implementation of a new AIS, an automated business intelligence system with an interactive dashboard, was to improve the provision of information by eliminating recurring manual work. This new AIS could process data in near real-time, which allowed both management accountants and managers to have direct access to the latest accounting numbers. In addition, the new AIS visualized these accounting numbers automatically in pre-defined graphs and allowed the user, via its intuitive user interface – as described by users – to filter, drill down, etc. to multiple organizational levels. The faster data processing and automated visualization of various metrics (mostly key performance indicators such as revenues, volume, margins, production figures, downtimes, savings and safety figures) allowed an instant interaction with the accounting numbers. This opened new avenues for use, such as a trial-and-error-search with almost no effort in comparison to the previous Excel and data warehouse procedure. In interviews, the developers of the new AIS explained that the design of the system and, in particular, the usability of the user interface as a dashboard was inspired by Apple’s highly intuitive software. This comparison referred to the ease that the new AIS provided in selecting applications from a catalogue as well as in arranging and customizing them in a personal screen according to users’ preferences. Following this logic, users were able to set up individual dashboards that could consist of several pages. Each page could contain multiple frames, which could represent and visualize various accounting numbers. For instance, one could depict three metrics (e.g. revenues for business units A, B and C) in a chart and compare their progress over time for different regions and product categories. A selected frame could provide various functions, such as drill-downs and filters, which allowed the user to apply assumptions in simulations that compare against other bases (e.g. periods, metrics). These features facilitate the monitoring and analysis of historical trends, current performance, and scenario analysis (see Figure 8.1).
During our interviews, it became evident that the technological-advances described in terms of faster data processing and intuitive visualization of information had implications for the work of both management accountants and managers as well as the interaction between them. In the following two sections, we will examine the resulting implications, first for management accountants and then for managers. In the subsequent section, we will then elaborate on the implications for the provision of information by management accountants and the interaction between managers and management accountants in the long term.
Figure 8.1 Illustration of a dashboard
Implications of faster data processing
Due to the new AIS, accounting numbers were continuously and almost instantaneously available for managers, whereas they were previously provided in specific reporting cycles. The head of global product management described the implications of the change in data processing for managers as follows:
I am no longer dependent on using a management accountant to give me an interim report or information on a region. I can now simply have a look, see how the US is going, and if it is not going [how I expect it to be], I can pick up the receiver and say, “Listen, what’s going on? I see here that sales have been going down for two days. Volume is going down. Something is going on.” That is significantly easier. Now, we have near real-time information for everything that you want to look at for this enterprise on a global basis from everywhere in every detail, and therefore, it’s amazing.
He pointed out that in comparison to the previous process, the faster data processing eliminated the time lag of data availability. Previously, more than a hundred organizational entities delivered their data after the sixth working day of the month. The management accounting teams then started with the preparation, consolidation and subsequent analysis. This meant that, after the consolidation, they first analyzed the relevant data in Excel and subsequently created visualizations of their analysis in PowerPoint, which they then annotated. Due to limited resources, management accountants were more likely to fill a previous PowerPoint deck instead of adapting it continuously to the current situation or making additional visualizations. Nevertheless, according to one head of a management accounting department in a business unit, this procedure took almost two weeks and thus resulted in outdated data. The new technological-advancement minimized this time lag, leading to instantaneously available data that was generated independently from reporting cycles.
As the quote above also indicates, in addition to an independence from reporting cycles, an independence of managers from management accountants emerged, because data were now accessible not only directly to management accountants but also to all persons concerned with the respective numbers. The management accountants thus no longer served as information intermediaries. Instead, information became democratized so that managers in our case study perceived an increased transparency due to the direct access to all accounting numbers. That increased the awareness of what was selected by management accountants, to whom they could refer more easily, if needed. Despite the increased transparency, the independence from management accountants had a further consequence regarding the kind of information provided. Previously, management accountants provided analytical interpretations of accounting numbers in annotations and face-to-face meetings and, hence, a story about what the accounting numbers represent from their perspective (e.g. a story about the recent development of a business unit). With the new AIS, managers were able to and/or had to interpret the accounting numbers on their own. This implicated that managers had more degrees of freedom to tell a specific story that favours their interests in, for instance, the leadership team meetings. This shows that the role of the management accountants as providers of accounting numbers lost relevance.
Given the technological opportunities, PolymerCo could have restricted the availability of accounting numbers by updating the numbers only in specific reporting cycles. However, they opted not to implement these restrictions, as they feared that the system would lose acceptance among managers and they saw the advantages of having data that were more recent. The new AIS gained acceptance not only by providing information faster but also by providing information in a more easily graspable format, which we will elaborate on in the following.
Implications of intuitive visualizations
Whereas faster data processing primarily had implications for managers, the new format also impacted the work of the management accountants. A high number of static visualizations that management accountants provided previously in the form of a PowerPoint deck of approximately two hundred slides changed to an automated interactive dashboard that put both managers and management accountants in the position to inform themselves more intuitively. Three characteristics of the system were crucial: formatting automation, formatting flexibility to select the content according to individual specifications and features of the new system that facilitated collaboration by sharing information.
In terms of the first format-related aspect (automation), the AIS automatically generated, in contrast to the previous Excel and PowerPoint procedure, visualizations of over 100 different predefined graphs. Users could select these graphs from a catalogue based on their needs and preferences. As one management accountant explained, this implied that management accountants no longer needed to “dive deeply into endless tables of numbers and pick the right ones” for their analyses. This increased the accuracy and, in the beginning of an analysis, facilitated an understanding of the data, as our informants reported. In addition, the direct visualization allowed users to more easily identify “certain trends and correlations, but also outliers and mistakes”, as one head of management accounting at one business unit recounted. Based on an easier trend identification, it empowered management accountants to be more proactive and communicate certain issues early on. Concerning managers, it implied that, due to the visualization, it was not necessary to extract (uncleansed and non-aggregated) data out of a data warehouse. Instead, managers had instant and intuitive access to (cleansed) accounting numbers that could be aggregated for any level of analysis. In other words, the dashboard solution allowed access to accounting numbers with little or no knowledge about data warehouses and data preparation – thus extending the scope of possible users to managers.
A second aspect was the flexibility to select the content according to users’ specific needs and/or interests by simply selecting a graph (e.g. revenue development against the previous year and revenue development against the forecast) from the catalogue. Moreover, it allowed users to filter the content of the dashboard according to different levels of analysis. The implication of this flexibility was that managers and management accountants could compile accounting numbers exactly according to their needs and did not have to go through two hundred PowerPoint slides. The head of procurement and trading stressed this in an interview:
I think each user, of course, has a different need, depending on how the technology helps them to do their jobs. In addition, everybody gets the chance to have their relevant metrics served in a way that is digestible and actionable. I think that’s what is very important.
In addition to facilitating users’ work on an individual level, the new AIS also facilitated the work on a collective level, which also nurtured the acceptance of the AIS. Two features were crucial for supporting effective collaboration between users: Due to the shared dashboard feature, users could subscribe to templates that contained pre-existing compilations of visualizations. Moreover, the padlock feature could be used to lock specific views in these shared dashboards (by locking a view, a subscriber could not change the comparison bases or assumptions, so that a shared view among all subscribers could be ensured). The combination of these two features allowed users to provide information in a standardized way for specific purposes (e.g. leadership team meetings), which gave managers a common discussion basis. However, as with PowerPoint decks, this feature also implicated that managers could refer solely to the shared view in meetings despite possible individual interests.
Overall, the features of the new AIS provided managers at PolymerCo an opportunity to retain the shared view on the business in specific teams (e.g. leadership team meetings), while at the same time allowed users to analyze data flexibly according to individual preferences. While the flexibility led to the situation that managers increasingly informed themselves and thus developed a better individual business understanding, the shared views helped teams develop a shared business understanding and subsequently use that to make decisions.
Temporal decoupling of accounting numbers and their analysis
The faster data processing and the interactive visualizations not only had implications for the work of managers and management accountants but also for the interaction between them. The first implication was that management accountants and managers recognized advantages for their information basis. As described above, management accountants could directly delve deeper into the data based on a faster identification of trends or outliers, whereas managers had continuous and independent access to the latest accounting numbers. A head of a management accounting department of a business unit described in an interview: “The manager does not have to wait anymore to get a report, a sheet of paper, or slides from a management accountant. He can proactively open the system whenever he wants. This allows him to deal with issues much earlier”. In our case, managers sometimes had a look at the accounting numbers even before the management accountants had even dealt with them. The head of the central management accounting department illustrated the changed interaction with an example: “Due to the fact that information is now accessible to everybody at an earlier time, the CFO can send you an email regarding specific topics as soon as he enters the office in the morning [i.e. possibly earlier than the management accountant], or he questions you directly when you pick up your coffee in the kitchen in the morning”. We thus conclude that management accountants did not necessarily have to initiate interaction with management at the end of the reporting period. Rather, the AIS created a situation that stimulated both management accountants and managers to trigger discussions of accounting numbers.
Furthermore, the new AIS also had implications for the kind of inquiries that managers made to management accountants. The CFO described the implication as follows: “This is an essential change. Previously, our [managers’] inquiries were 90% of a transactional nature. Now, however, these are ‘business partner’ questions”. Our respondents described this as a boon for the organization – previously, many transactional questions about an exact figure on specific events had to be answered, whereas now questions about the underlying reasons are more important. The head of business planning and administration described the change in the interaction as follows: “Discussions are more intense, because you do not have to ask anymore what the result is, because everybody has access to it. Instead, it is a discussion regarding the topic”. Thus, management accountants were no longer expected to merely forward numbers but, instead, to contribute to mutual and deep discussions about underlying reasons.
This increased desire on the part of the managers to discuss business issues in-depth came with an increased demand for more in-depth analytical interpretations about the underlying reasons and argumentation. Managers were able to carry out simple analyses; however, as they dealt more with the accounting numbers, they developed greater interest in more complex analyses and analytical interpretations such as cause-and-effect analyses and scenario analyses, which are more time-consuming. Both managers and management accountants felt that these more complex analyses enabled them to conduct more profound discussions with one another. The head of global product management explained this in an interview:
Well, everybody has the same numbers, but then the real work starts in interpreting them, doing variance analysis, making follow up calls and reviewing closely why specific effects exist. You need somebody who is able to explain in an hour precisely the drivers and influences that affected the business in each region, in each strategic entity in the last two months, and to derive implications in order to steer [the organizational entity you are responsible for] effectively in the upcoming months.
Although accounting numbers were continuously available, the time-consuming analyses remained to be provided at the end of a reporting period. Based on this observation, we argue that, in the context of providing information to managers, accounting numbers and their corresponding analysis became temporally decoupled, as the former were continuously available, whereas the latter were reported in specific cycles (e.g. at month end). Nevertheless, we also observed tendencies to limit this temporal decoupling. Informants reported that, overall, the frequency of inquiries increased, especially as managers used more often informal occasions (e.g. conversations in the office kitchen) to quickly discuss certain numbers. In addition, due to the outlined change of the type of inquiries from managers to management accountants, informants described the interactions as more intense because they were conducted with more analytical depth. We interpret this increased and more intense interaction as a kind of countermovement to limit the temporal decoupling in order to be still able to combine accounting numbers and analytical interpretations.
In summary, we thus observed that these changes affected the relevance of management accountants. Seemingly, the time that management accountants spent on transaction processing and reporting tasks decreased further. In turn, the time spent on profound analyses and interpretations for decision support increased. Based on this, we suggest that AIS have the potential to enable another shift in the tasks of management accounts towards decision support.
Concluding discussion
Scholars proposed transaction processing, reporting and decision support as the tasks of management accounting (Booth et al., 2000). To fulfil these tasks, management accountants make use of AIS (Granlund and Mouritsen, 2003), which were already subject to innovations in the IT industry in the 1990s (Booth et al., 2000; Sánchez-Rodríguez and Spraakman, 2012; Scapens and Jazayeri, 2003). Now, approximately 20 years later, another surge of innovations is about to influence information provision in organizations (Stodder et al., 2015). In particular, technological-advanced AIS are taking advantage of faster data processing and interactive visualizations (Stodder et al., 2015) and, thus, provide the potential to introduce changes to management accountants’ work. Consequently, we set out in this chapter to examine how the capabilities that such systems bring along may affect the process of providing managers with information relevant for decision-making as well as what role management accountants play therein.
Based on an implemented new AIS that made advantage of the described capabilities with regards to speed in data processing and the format of provided information, we could observe that it allowed making accounting numbers continuously and instantaneously available. This finding is consistent with studies that showed that managers are dissatisfied with a time lag in receiving information (van der Veeken and Wouters, 2002). Furthermore, we showed that the new formatting possibilities allowed intuitive access to accounting figures by people who have less knowledge about data warehouses or who are non-accounting experts, such as managers. This finding is in line with previous studies that showed that formatting is an important aspect to reach a broader target group (Card et al., 1999). In our case, both factors contributed significantly to the acceptance of the system and facilitated, in this way, the described changes in the work of both management accountants and managers.
Regarding management accountants’ work, prior research evaluated the effectiveness and quality of management accountants output and emphasized that analytical interpretation is more valuable (Merchant and Van der Stede, 2007; Quattrone, 2016) in contrast to stand-alone accounting numbers (Busco and Quattrone, 2015; Quattrone, 2015). We observed that, with the help of the new AIS, management accountants were able to analyze data faster and, in this way, more easily identify trends, outliers, etc. Moreover, we observed a shift in the time devoted to specific tasks, in that management accountants focused more on analysis for reporting and decision support. In addition, managers are informed about the figures in shorter intervals (near real time), which enables more profound discussions and intense interactions. Therefore, we conclude that the relevance of management accountants increased due to a higher proportion of more highly valued tasks. In light of this, we did not observe a downsizing of the management accounting department, which can also be a result of the implementation of new information systems (cf. Agliati et al., 2001).
Nevertheless, managers’ direct access to accounting numbers implied that management accountants’ role as an intermediary of information changed. It allowed managers to create individual interpretations of the accounting numbers. However, prior research described accounting numbers as an incomplete translation of reality (Chapman, 1997). In this vein, Quattrone (2016) emphasized the importance of listening, discussing and understanding numbers, which underlines the significance of a critical reflection that may get lost if the intermediary role becomes less relevant. This raises the question of whether the user of such accounting numbers (e.g. managers) has the capacity to be objective and able to separate between me and myself (Hoskin and Macve, 1986). It underlines the important role that management accountants can play as a platform for reasonable discussions (Busco and Quattrone, 2015; Quattrone, 2015). Whereas, in our case, management accountants were partially able to play this role in the frequent discussions with the management, it remains open for future research if and how management accountants succeed in this role in light of such democratization of accounting numbers when managers do not seek the discussion with management accountants.
In conclusion, we showed how accounting numbers and corresponding analyses can become temporally decoupled by AIS that take advantage of faster data processing and interactive formats. Nevertheless, we could also show how managers and management accountants tried to limit this temporal decoupling by intensifying their interaction, which was concomitant with an increase in the relevance of management accountants. Furthermore, we observed a shift in the time spent on management accountants’ tasks towards more analyses for decision support. This allowed us to conclude that new AIS have the potential to improve the information provision of management accountants.
Acknowledgement
We would like to sincerely thank the Hanns Seidel Foundation, which supported this research through a scholarship to the first author.
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