The Future of Technology and AnalyticsBy
It’s essential to track disruptive trends and maintain your knowledge base and skill set for what’s next.
In February 2019, IMA® (Institute of Management Accountants) released the latest version of the Management Accounting Competency Framework (bit.ly/309rjw8), which reflects the knowledge and expertise that today’s—and tomorrow’s—management accountants must have in order to be relevant in today’s rapidly evolving business climate and to be prepared for what the near future holds for the accounting profession. Factors such as changing demographics, the dynamic economy, increased regulation and legislation, emerging technologies, globalization, and many others are driving change across the professional landscape, including accounting and finance.
Legacy models and paradigms of how accountants “used to do things” are being disrupted by innovative new approaches, solutions, and processes. Make no mistake about it: Disruption in your profession is already here, and it’s going to continue. Some may see chaos or uncertainty; others will experience fear of what’s next; still others will see innovation, opportunity, and competitive advantage amidst the disruption.
The disruptive changes mean that management accountants need to adapt or get left behind, figuratively speaking. This is meant to urge you to action. The profession must evolve its competencies and skills in order to get out ahead of the changes and best position itself to ride the wave crest into the future while remaining relevant and valuable.
Technology and analytics are two domains in which management accountants must improve their competency in order to be future-ready. CFOs and other financial professionals already need to understand basic enterprise technology and analytics for all their crucial roles; these are already part of daily work life. Yet newer technologies such as advanced AI and machine learning, blockchain, prescriptive and adaptive analytics, and data visualization are where most of the profession falls short.
HUMANS AND “COBOTS”
Looking at the current impact of automation and robotic process automation (RPA) on business, The Economist in its “The Future of Employment” study predicted as early as 2013 that much of what accountants and auditors do would be computerized in the very near future. In fact, it was a virtual certainty at 94% likelihood. More than five years later, today’s pundits predict that not only will large portions of more operational and lower-level tasks in accounting and finance be automated, but also higher-level, more strategic insights and even decision making will increasingly be made by “cobots,” our robotic coworkers.
One of the Big 4 firms has publicly predicted that the audit will be fully automated within the next few years. Fully automated. Where do the human accountants fit into that evolving process? How do they balance the need to modernize, adapt, and evolve while preserving their roles? It’s partly about strategy and partly about improving competencies and filling gaps with them.
Don’t despair. Help is here on the competency side. The updated IMA Management Accounting Competency Framework overhauled its predecessor in a few significant ways, including updating the technology domain to focus on technology and analytics. This domain covers four competencies:
- Information Systems: This involves using technology to support operational and financial processes, solve business problems and challenges, perform analysis on data, and enhance overall business performance.
- Data Governance: This is about managing data over its entire life cycle, including data authoring, data gathering, and data validation, as well as ensuring that data is accessible, usable, high quality, and secure.
- Data Analytics: This involves extracting and aggregating data, transforming it to meet your needs, performing increasingly sophisticated analysis (e.g., predictive and prescriptive analytics), gaining insights from the analytics, and driving business decision making.
- Data Visualization: This is about presenting data in a variety of visual ways to identify and explain patterns, relationships, correlations, and trends in the data to support business decision making.
IMA AND THE FRAMEWORK
The Framework identifies five levels of technology and analytics knowledge within each of the competencies: limited knowledge, basic knowledge, applied knowledge, skilled, and expert, with expert-level competency being the end goal. For example, within Data Analytics, expert-level knowledge means you can build prescriptive models that optimize organizational performance (also known as goal seeking). In other words, you need to build data models that prescribe the course of action. They tell you the actions to take in order to reach the goals. This is data analytics at its most sophisticated state.
Expert-level competency in Data Visualization means that you can demonstrate expertise in all three aspects of visualization: substantive, statistical, and artistic. If you can demonstrate your competency at building data marts and data warehouses to provide access to information throughout your organization, you have reached the expert level. Automating data-cleanse processes or designing and implementing data governance systems in accordance with recognized frameworks such as the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and COBIT (Control Objectives for Information and Related Technologies) also put you at the top level of knowledge in Data Governance.
Management accountants who use the IMA Framework to assess the gaps in their technology competencies can use it as a road map for additional education and training they need to take. It not only keeps them focused on what matters, it’s also more efficient in the use of their study time and budgets for professional development.
IMA is also in the midst of developing training resources around the technology domains in the Framework, so more help will be on the way. The four technology and analytics competencies in the updated Framework have also been mapped to the 2020 CMA® (Certified Management Accountant) exam. CMA Exam Part 1, Financial Planning, Performance, and Analytics, is where most of these competencies will be examined. Those who pass the next series of exams will be successful in part if they possess the knowledge about these newly added technology-related competencies. But this isn’t about leaving tomorrow’s CMAs to worry about this and burying your head in the sand. The new Framework is a wake-up call to management accountants everywhere…now. Learn these competencies. Otherwise, you risk being disintermediated in favor of other professionals who have.
It’s your opportunity. Are you preparing to position yourself with the knowledge, tools, and skills needed for what’s next?