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EXECUTIVE SUMMARY
Management accountants are positioned to play a key role in the implementation and application of business analytics in their organizations as they move beyond traditional, transaction-based accounting to analytics. This emerging trend will transform how management accountants analyze and interpret data for their companies.
If you have been a management accountant for any length of time, you know that you traditionally have worn four distinct hats in your organization: participation in strategic cost management to achieve long-term goals and objectives; planning and decision making for internal cost activity; management and operational control for performance measurement; and, to support the first three roles, preparation of financial statements.1 All four roles have supported decision making by using management accounting and finance data/information for analysis.
This is an exciting time to be a management accountant because recent developments in technology and the field of business analytics are going to equip you with new tools and processes that will enable you to build value in your organization. Rather than being restricted to routine spreadsheet analysis tools, management accounting analysis will be transformed through business analytics. Figure 1 shows how business analytics will anchor and tie together your traditional roles.
Bradford Hamilton, information technology (IT) controller at Cummins Inc., a global power-technology company, believes that you "need to know and be engaged in business analytics because management accountants bring value to the business as business partners. In order to be a business partner, they have to understand the financial dynamics of the company often beyond simply what shows up in the income statement and balance sheet. Business analytics provides insight into many cost drivers and other financial dynamics of the business and often in real-time, when the data is most critical. Our business leaders look to us to partner with them in interpreting and utilizing this data." The enhanced role for business analytics is driven by an explosion in the amount of new data available for analysis.
The New Data Ecosystem
Ten years ago, management accountants probably would not have recognized many of the terms shown in Figure 2, much less in the context of business analytics. As more and more information becomes digitized, the data ecosystem continues to explode, providing companies with expanded data that...