The Changing Role of Management Accountant in Digital Economy

Management accounting is one of the emerging processes used by businesses to increase the proficiency of the enterprises as well as to maximize their profits. Organizations require management accounting to realize the efficacy of their budget, operational costs and then to allocate the funds subsequently in the sales, production and other endeavors of the corporations. Hence, the job of management accountant holds vitality for an organization’s overall well-being. 

Pierce and O’Dea (2003), as well as Yazdifar and Tsamenyi (2005), have argued that the responsibilities of the management accountants have been changed throughout the past two decades. Rapidly digitizing the economy is one of the major reasons behind these changes. According to Burns and Vaivo (2001), there are four particular management accountant roles that have been changed and they are: 

• The provider of information related to costs

• The controller or the storekeeper

• The consultant for the internal business operations to support the business

 • The member of the strategic team of management 

Management accounting has a sustained and substantial past record of contributing directly to the planning decisions of the organization and controlling the organizational operations. The expansion of the role of accounting practices has been continued since the 18^th century affecting management accounting and its practices. With the passage of time, the work of management accountants has become multidisciplinary. Additionally, the management tools used by the organizations have also encountered changes as per the technological and informational needs of the organization. Nowadays, the knowledge of the software or technology used by the organizations is very important to maintain the accuracy of results as well as to ensure timely results needed by the respective department within the organization. 

The increasing use of technology has influenced the work of management accountants and their roles and responsibilities within the organizations. The developments in the Informational Technology (IT) sector are expected to enhance the existing power of management accountants over the line and system managers. This might help the management accountants to get their work done through them by exercising control and providing the right direction to them. The key driving forces that encompass the digital environment and the way it shaped the role played by the management accountant constitute: 

• Internationalization and globalization of businesses

• Change in the work processes and attitudes

 • Demands for the wider scope of accountability 

• Information technology (IT)

• Growth in the number of non-accounting rivals and the expansion of alliances

• A more diverse range of products and services for customers

 • An economy based on knowledge 

However, the implementation of computerized systems such as Enterprise Resource Planning (ERP) systems has intensified the discussion on the transformation of the roles and relationships of the management accountants in the context of the technological businessenvironment. In a research, Scapens et al. (1998) have argued that the rapid usage of ERP systems within the organizations can minimize or eradicate the necessity of management accountants for the organizations in the sense that there might be no requirement of them as the supplier of information as the line managers can have direct access over any information they might need. 

In the digital economy, organizations need faster results from the management accountants with a view to attain a competitive edge in the global market. Strategic management has been recognized as the primary knowledge base for management accountants in the future. The skills that are in high demand include analytical, technological, leadership, strategic and communication centered skills. Consequently, management accountants will be required to place themselves in such a way they could provide unified and strategic recommendations and decision making (Parker, 2002). This indicates that the vitality of strategic management practices will be increased in the future for the management accountants and will also be observed in various management accounting disciplines being taught in numerous educational institutions. 

Regardless of the changing digital economy, the organizations will need management accountants to ensure the core competencies better than their competitors. A management accountant is expected to be acquainted with the changes in the market, be it a political change that could impact the market, competition, labor costs, supply of raw materials and costs associated with it, internal operations, and the like. This might be challenging for the management accountants to keep themselves updated with the relevant changes in the market as the managerial decisions are also dependent on the information provided by the management accountant. 

However, with the development of skills as per the environmental changes, management accountants can outshine in the business market all across the globe. Therefore, the management accountants are required to fulfill the informational needs of the companies in advance so that it could help the companies in financial decisions making considering the availability of the funds and the requirements of the organizations. Consequently, it will help the companies in achieving economies of scale as well as a competitive edge in the digital economy. 

References 

Burns, J., & Vaivo, J. (2001). Management accounting change. Management Accounting Research, 12, 389–402.

Parker, L. D. (2002). Reinventing the management accountant. Transcript of CIMA address delivered at Glasgow University, 15.

Pierce, B., & O’Dea, T. (2003). Management accounting information and the needs of managers: Perceptions of managers and accountants compared. The British Accounting Review, 35(3), 257-290.

Scapens, R. W., Jazayeri, M., & Scapens, J. (1998). SAP: Integrated information systems and the implications for management accountants. Management Accounting, 76(8), 46–54.

Yazdifar, H., & Tsamenyi, M. (2005). Management accounting change and the changing roles of management accountants: a comparative analysis between dependent and independent organizations. Journal of Accounting & Organizational Change.