Management accounting is an important process carried out to identify measure, interpret, analyze, and communicate essential information for the favor of the company or the organization’s goals. It combines finance, accounting and management and all of these kind of information are used to inform a certain business strategy involved. They include collecting data on the revenues generated, cash flow and any outstanding debts to create monthly or timely trend reports and statistics in order to have a day to day management and to take on any important business decisions. In organizations, businesses and companies organizational changes are bound to occur as a form of development and progression to goals. Organizational change includes modifying business processes and management structures. The change typically includes three important stages of establishing the need, implementing and monitoring. Organizational change management would identify and minimize any risks or issues that are associated with the implementation of a new system or process. In relation to management accounting the impact of organizational change will be discussed and what kind of results will be observed. Even if the system is a high functioning one in the company but the project would still be at risk of failing because organizational change management ( OCM ) needs to ensure that all of the users have embrace that change and how to work with it. The function of management accounting has changed with the introduction of new technologies such as the ERP systems and with an organizational change the change is observed.
With the technological advances, highly competitive environments, new management strategies an operational change could be and will be greatly evident. Operational changes initiatives are carried out to change a system or a process in the organization. One of the newly introduced systems is the enterprise resource planning system ( ERP ) which exposed the need for several procedural changes across all the different functional areas. These systems offer various modules that integrate multiple functional areas of the business starting from an accounting system to provide a general or a common support across a broad spectrum of business functions. The ERP would allow different business to integrate their processes so that the managers in the different sections or functional areas can improve their decision making through a more centralized view of where their specific process fits into the overall strategy. According to the research done by the association of accountants and financial professionals in Business, a few important statements given on the management accounting had mentioned that some time around 2002, it was seen that 67% of large and mid-sized were already applying ERP systems, while about 21% were considering implementing the ERP system. The expenses spent for ERP in 2004 were about $30 billion and it’s highly expected to continue growing by approximately 150% per year. The ERP technology’s application’s result is evident in quite many functional areas such as across different communication channels and several data points and that opens up greater possibilities for the variety and volume of data that can be stored and analyzed by diverse companies.
Switching from a more isolated business environment and moving on to using an integrated system, and in addition to that the capacity for storing more data is increasing and relationships across the functional areas of business, has opened a new opportunity for a more current trend which is called “Big Data”. The term Big Data is summed up by three terms in which first it was identified by Doug Laney in 2001: volume, velocity, and variety. For a certain dataset to be considered “big” that would depend on the system that’s storing the data. However, if a given dataset is too voluminous for that current system used and the processing speed starts slowing down below the efficient velocity then it has met the two conditions identified to categorize it as Big Data. The data from the company must come from several sources and in return that contributes to the magnitude of the volume. Statistically speaking, In 2012, in the United States around 15 out of 17 business sections had much more data stored in each company in comparison to the U.S. Library of Congress. The data is quite informative as it is used to make important connections to provide a predictive analysis in order to be able to drive a proper business decision rather than just basing the significant decisions simply on intuition or even only by experience.
The impact of an organizational change causes a need to update the operational systems and the employees once faced with a change an instant emotional response is evident as they would assess their acceptance to this change. However, the adaptability to a better addition and to work on a more technological advance is a full on benefit for the company on the long run and any form of resistance should be set aside to accomplish that. The widespread adoption of the ERP systems and the application of Big Data represent a great opportunity to continue a long established tradition where the management accountants could actually provide a higher value to the organization’s ability to make decisions. It’s quite essential to have management accountants fully immersed in the project worked on in the company. They are actually much more than a resource that are occasionally called upon, instead they are considered to be a full business partner with the skills and knowledge pertained within and that can contribute to the operational change initiatives. Several articles have suggested that there could be someone evidence of a shift in accountants’ role from being just working behind the counter emphasizing on controlling the expenses and budgets into actual “business consultants” and to essential information providers to the operational managers. Finally, management accountants should highly consider and to a more serious level must adopt the organizational change methods in order to follow the path of having the success in projects which include involving their system and the process changes for and within their departments.