Technology Trends to WatchBy
Here are some of the latest technolgy trends that could impact management accountants and their jobs.
Management accountants need to filter through what’s hot to find emerging technologies that are relevant to best business practices. The IMA® Technology Solutions & Practices (TS&P) Committee serves as a forward listening post on this tech and helps CMAs and our broader membership understand how to adapt current technology to organizations today. The Committee has compiled a list of technology trends to watch in 2016-2017.
The blockchain is the primary technology behind Bitcoin (a secure form of digital currency)—essentially a distributed ledger that secures, records, and proves a full history of all the transactions on a network. A blockchain consists of a growing set of completed blocks that are added for each transaction in chronological, linear order. As one block is added from a completed transaction or activity, a new block is generated and added to the just-completed one in the chain.
Each computer connected to the network that validates, processes, or relays transactions will get a copy of the blockchain automatically. The comprehensive history contained within the blockchain data is then usable by the connected computer or access node. Beyond Bitcoin ecurrency, blockchain can also be used to capture and preserve the full history of a set of transactions.
Blockchain will depend on high-quality, structured data—XBRL is being explored to see how it might be integrated to improve machine-readable blockchain data. Imagine the value of a fully preserved history of financial or accounting transactions for management accountants and finance professionals. Blockchain is the topic of much discussion among capital markets and financial services regulators and has far-reaching implications for management accountants, including the depth of data contained within the chains as well as its reliability and usability for advanced analytics for management reporting and decision making.
The ever-present cloud continues to be valuable to business, particularly for making solutions and capabilities scalable and cost-effective for small and medium-sized businesses. In addition to all the current cloud capabilities that benefit management accountants (e.g., Software-as-a-Service, Infrastructure-as-a-Service, Platform-as-a-Service), one emerging trend is the shift of internal controls and continuous monitoring into the cloud. Opportunities are growing for CFOs and others to move their controls (using the updated COSO Internal Control—Integrated Framework) online to enable greater capacity, capability, and efficiency to monitor information and processes while minimizing risk.
Many companies (regardless of size) lack formal IT and data governance policies to help protect one of the organization’s most valuable assets—its information. This includes accounting and other data used for management reporting, budgeting, forecasting, trend analysis, compliance reporting, and risk management processes.
Boards of directors have a responsibility to shareholders and other stakeholders to ensure effective risk management. Technology enables various capabilities around the information supply chain (e.g., data authoring and signing, validation, aggregation and analytics, automated internal controls, reporting), which require proper governance to function effectively. Parts of that governance can also be automated (e.g., cloud-based internal controls) and represent an opportunity for management accountants to play a central role.
Perhaps this is the year where Big Data simply becomes “data” since it is widely seen to be part of the current lexicon. As companies begin to internally produce their own mountains of information, simultaneously accessing open data sets and purchasing proprietary data streams, one can quickly see that not all data may be meaningful or useful. It must be filtered to what is relevant, reliable, and meaningful.
The shift in this trend is in the ability to capture and filter data across multiple platforms easily, quickly, and cheaply. Nimbleness in dealing with Big Data is key to eking out a competitive advantage from any decisions made using this data. As nonfinancial information increasingly becomes part of the purview of CFOs and finance teams, a completely new layer of information gets heaped on top of traditional financial data. This magnifies the risks and the payoffs. Technology assists throughout the Big Data supply chain, and management accountants must take a direct role in preserving the integrity of that supply chain.
The close sibling of big data is advanced analytics. Businesses today need to leverage every possible opportunity to create an advantage in the marketplace. Technology and innovation will help them achieve these advantages. As technologies improve, so do capabilities to analyze information using sophisticated cloud-based tools. But it’s no longer sufficient to simply make decisions using outdated, historical information nor to merely predict what could happen based on inputs, variables, and choices made along the way. The successful business will be able to use big data and advanced analytics technologies to prescribe the next course of action—to apply prescriptive analytics to define what should be done by removing more uncertainty and gaining more insight.
INTERNET OF THINGS (IoT)
The number of Internet-connected products on the market today has exploded. Real-time data generated by IoT-enabled devices and networks has the potential to help companies run a smarter business. For example, managing a fleet of connected trucks or heavy equipment can improve efficiency for repairs and upkeep, use of gas or energy sources, and deployment. Management accountants will rely on some of this information, and we need to be able to trust its timeliness, reliability, and quality. The technology itself isn’t really new, but communicating directly with devices and networks in new ways is. Proper IT/data governance helps alleviate some of the reliability concerns. Yet these aren’t the only risks. Effective standards, internal controls, and continuous monitoring are needed to protect the information from cyber threats.
SMART MACHINES AND AUTOMATION
A close relative of IoT, smart machines and automation are no longer the domain of sci-fi movies and fantasy. Sentient robots are going to become a reality in the next few years. Robotic accountants are not far off—the key will be for businesses to think about how they can integrate smarter, more powerful machines with greater computing and analytics capabilities as well as intelligent machines into their accounting and finance functions. Management accountants need to move higher up the value chain into more strategic roles, presumably somewhat safer domains for the time being.
Bring-your-own-device policies are commonplace today among companies. Along with all the benefits (e.g., efficiency, cost-effectiveness, flexibility, access) come risks (e.g., cybersecurity, data breaches) that can directly impact the accounting and finance functions. Daily headlines about cybersecurity intrusions mean that central accounting and finance functions are exposed to threats through the multiple entry points of every tablet or smartphone.
Cybersecurity is probably the top concern among companies today. Infrastructure of all types is being targeted by national and foreign agents through sophisticated technologies. Physical security of real-world assets and facilities (e.g., data centers, server farms, offices, and factories) continues to be a closely related issue. Management accountants must be active in protecting company information, systems, software, data centers, and hardware through effective IT/data governance, internal controls and continuous monitoring, and strategic use of technology.