Summary and Progression
Discuss about the Digital technology transformation in accounting and its impacts on businesses.
Digitalisation refers to a platform for sharing knowledge in a time bound manner. It helps in providing an easier access to knowledge and various kinds of information in a real time manner. Today, due to the increased advent of the wave of digitalisation, embracing digitalisation by business organisation has become the need of the hour. It has provided the businesses of today a new lease of life. Faster productivity, cost cutting advantage over competitors and increased profitability are some of the impacts are some merits of embracing it. The progression in the field of accountings with the new wave of accounting has reshaped a new ear. It has benefited accountants and financial analyses across the globe. The businesses which aggressively embrace and use modern digital tools such as cloud, analytical tools, and various other mobile tools in their businesses are have achieved a significant amount of success and are continue to do so (Bhimani and Willcocks, 2014).
On carefully analysing the four articles of Bhimani Et al., 2014 of Digitalisation of accounting business, Deloitte’s report on Digitalisation in the financial services sector, Ketterer ‘s 2017study on Digital Finance: New Times, New Challenges, New Opportunities and the report of Gulati and Soni’s of 2015 dealing with the Digitization: A strategic key to business. Journal of Advances in Business Management. The most important aspect of this digitalisation has been the complete transformation which it has brought in with the wave of increased usage of digital medium in the day to day working of the business forms and other companies. Some of the common themes have been discussed below:
- Increased benefits to accountants:One of the most striking themes which has been common to all the different four themes, the increased benefits which have been provided and are available to the accountants all over the world. The accountants and financial experts have now started to receive increased help from new partners like intelligent automation, digital workforce, technology driven financial platform for conducting the day to day activities of the business and the increased digital trust with advanced securities for strengthening the digitised environment.
- Risk of Cyber Security:As internet usage and implication has increased, the protection against cyber-attacks becomes necessary. Accountants of various leading business organisations must collaborate with the cyber experts in order to nullify the cyber threats. The increased threat of cybercrimes have been mentioned and discussed in all of the four academic articles. The threat of cybercrime is large and real.
- The Mobility benefit:Various accountants are exploring the mobile technologies in order to deliver quality services, productivity, gains for the business. According to the mentioned reports, the increased digitalisation of the financial services and corporations, helps in ensuring that they always stay connected irrespective of their presence in the office or elsewhere. A large number of latest mobile devices are being synchronised and combined with the latest cloud software’s in order to provide unlimited, uninterrupted access to special software’s concerned with financing and accounting.
- Cloud computing impact:The common theme of cloud computing has been repeatedly been discussed across all the four academic articles. Accountants, today and the business organisations are exploring cloud in the context of business practices. Cloud based infrastructure provide unlimited storage facilities. The simplification of accounting tasks, cost reduction and the easy storage and availability of the accounting and financial data have enabled the accountants and the financial accountants to undertake process large amounts of accounting and financial data in a short period of time.
- Staunch resistance from the CFOs:According to the poll which was conducted by Deloitte Debriefs, many of the CFOs, have reportedly expressed the fact that they are not adequately prepared in order to take on the latest technological advancements (Deloitte United States, 2018). This technological changes has caused a great concern for the CFOs of the various reasons. Some 39% of the CFOs of various world class companies have unanimously regarded technological change as one of the most distressful factors in today’s world. CFOs, are increasingly being burdened with the added responsibility of forming novel strategies to for implementing digital technologies in the financial arena.
- Influence on accounting practices:In accordance with Bhimani Et al., 2014 of Digitalisation of accounting business, with the influx of digitalisation, its impact of accounting and finance has been substantial. A large amount of data of different sizes, passes through business organizations every day and it is the job of finance and accounting experts of making proper sense of it. Interpreting this kind of data and information would require Finance professionals to have a broader skill sets that must include some IT knowledge as well as risk assessment knowledge as well. This requires significant amount of knowledge from the CFO’s end. The CFO must have adequate data and knowledge of big data. If the CFO’s are not equipped with the expertise of using the new technologies, then it would pose a serious problem for the company.
- Growth of the internet economy:The internet economy has grown by leaps and bounds as has been discussed in Ketterer‘s 2017study on Digital Finance: New Times, New Challenges. The financial services industry is one of the fastest growing industry in this digital age and most importantly, it is based on the internet economy for its survival. Digital currency has been extensively used in today’s world. Digital deposits and digital investing are some of the recent subjects which have come out of the genre of digitalisation. In today’s advance world, the accounting of important day to day financial operations are recorded in a digital way, which fuels the digital internet economy.
- Change in social order: One of the most important themes which has been touched upon by Gulati and Soni’s report Digitization: A strategic key to business. Journal of Advances in Business Management, is the fact that the internet age and the digital platform has provided a change in the existing social order. It has provided equal access to all its user and has not provided any kind of partial treatment in the distribution of any kind of information which is derived online.
In today’s hyper active world, which is dominated by the huge impact of digitalisation, the modern finance job is being led by the Chief Financial Officer. This operation is frequently disrupted by the influx of digitalisation. The production of the big data, the risky inquisitivenessof the environment and the incessant demands of the stakeholders have a huge influence over them. A study of E&Y, ‘The DNA of the CFO’, has revealed that there are four major functions which affects the finance and accounting jobs in the, which are digitalisation, data analytics which include big data and others (Mukherjee, B. 2018). . Risk and uncertainty is another factor which has a huge impact on the working of the companies in today’s uncertain, thus in today’s ultra-competitive world, maintenance of the various financial institutions in this era of digital make over is a challenge (Kear, 2013). The future of finance and accounts lies in the crux of digital platforms. In the future, the CFO should and must be adequately prepared in order to initiate a smooth and effective transition into the digital era.
The common themes across the four academic articles
Digital transformation is not a technological revolution in a pure form, it only is a part of it. It is just a driving force behind this fourth digital revolution. When it comes to the practical feasibility of the various conclusions and results of the four articles, it could be said that, with the incessant functioning of the internet economy, all these results are pretty much operable in the daily business activities. Finance function is one of the very important functions, which is undertaken by each and every business activity. It includes a wide variety of activities from taking investment decisions, liquidity decisions, dividend distribution decision, etc. are some of the important aspects of the finance function. After thoroughly going through each and every business activity, the decision of investing in the project providing the maximum returns is taken, in the same way the date and the amount of dividend to be paid, forms the crux of the dividend decision (Tarut? and Gatautis, 2014). Whether it is the internet economy, influence of digitalisation on accounting activities or the positive impact of social order, all these aspects are financially as well as practically feasible in the daily business operations. This leads on to prove the practical feasibility of all the digital backed operations on a day to day basis in today’s business operations.
In today’s hyper active world, which is dominated by the huge impact of digitalisation, the modern finance job is being led by the Chief Financial Officer. This operation is frequently disrupted by the influx of digitalisation. The production of the big data, the risky inquisitiveness of the environment and the incessant demands of the stakeholders have a huge influence over them. A study of E&Y, ‘The DNA of the CFO’, has revealed that there are four major functions which affects the finance and accounting jobs in the, which are digitalisation, data analytics which include big data and others (Mukherjee, B. 2018). . Risk is another factor which makes the maintenance of the various financial institutions in this era of digital make over a big challenge (Kear, 2013).
The studies also suffer from various limitations such as the sample size of these studies have been very narrow as a result of which, complete dependency on them could not be done. The reports have highlighted some important limitations such as staunch resistance from the CFOs about the new digitisation process and the risk of cyber-crimes, which must be resolved as soon as possible. These limitations of the reports and its results must be resolved in order to initiate a smooth transfer into the era digitalisation.
References:
Bhimani, A. and Willcocks, L., 2014. Digitisation,‘BigData’and the transformation of accounting information. Accounting and Business Research, 44(4), pp.469-490.
Deloitte United States. (2018). Digital transformation of the finance function: It’s crunch time! | Deloitte US. [online] Available at: https://www2.deloitte.com/us/en/pages/finance-transformation/articles/finance-digital-transformation-for-cfos.html [Accessed 10 May 2018].
Forbes India. (2018). How digitisation is changing a CFO’s role | Forbes India Blog. [online] Available at: https://www.forbesindia.com/blog/digital-navigator/how-digitisation-is-changing-a-cfos-role/ [Accessed 10 May 2018].
Gulati, R. and Soni, T., 2015. Digitization: A strategic key to business. Journal of Advances in Business Management, 1(2), pp.60-67.
Kear, M., 2013. Governing homo subprimicus: Beyond financial citizenship, exclusion, and rights. Antipode, 45(4), pp.926-946.
Ketterer, J.A., 2017. Digital Finance: New Times, New Challenges, New Opportunities. Inter-American Development Bank.
Loebbecke, C. and Picot, A., 2015. Reflections on societal and business model transformation arising from digitization and big data analytics: A research agenda. The Journal of Strategic Information Systems, 24(3), pp.149-157.
Mukherjee, B. (2018). How Digitization, GST and GDP have Redefined a CFO’s Role. [online] Entrepreneur. Available at: https://www.entrepreneur.com/article/302440 [Accessed 10 May 2018].
Tarut?, A. and Gatautis, R., 2014. ICT impact on SMEs performance. Procedia-Social and Behavioral Sciences, 110, pp.1218-1225.
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