Considering new sources of data and conducting more advanced analytics.
While management information to inform and guide the planning and control cycle remains central to management accounting, information that managers routinely require will be provided via Business Intelligence (BI) applications.
Management accountants articulate expected outcomes, performance drivers, indicators to be reported and questions that might arise. Financial planning and analysis to inform decision-making and performance management will remain a key aspect of management accounting. Despite the hype about the sophisticated analysis of Big Data, management accountants appreciate there is still so much untapped potential in more readily available data.
Our future of finance research suggests the finance function’s remit will extend to considering new sources of data and conducting more advanced analytics. The CIMA syllabus has been updated to ensure management accountants have competencies in data management and some forms of more advanced data analysis.
Figure 5 shows Big Data provides opportunities for measures and analysis to improve performance in each block of the CIMA ‘building blocks’ framework (Figure 4).
The Agile finance revealed report reveals a weak alignment between what finance professionals see as the drivers of value in the business and the measures the finance function provides or monitors. The top five drivers of value were all intangibles: customer satisfaction, the quality of business processes, customer relationships, human capital (e.g. the level of staff engagement) and the brand’s reputation.
The intangibles on which the development of all others depend on is the quality of decision-making. Finance functions currently tend to provide data analysis related to financial outcomes and analysis of performance against financial objectives.
"Our future of finance research suggests the finance function’s remit will extend to considering new sources of data and conducting more advanced analytics."
While management accountants probably won’t need to become expert data scientists, management accountants should also develop a good understanding of data sources and analysis, as well as sufficient understanding of data architecture and analytical techniques to engage with IT, business colleagues and Data Scientists.
This will enable them to tackle bias in decision-making so they can operate as effective business partners. Ensuring decision-making is properly informed, the ethical implications of all decisions are considered, and performance is managed in the interests of stakeholders.
