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GM1403: Management Accounting, Strategy and Control > Part 2: Digitalisation > Flashcards

Part 2: Digitalisation Flashcards

1
Q

Digitization

A

The process of transforming analogue information into digital bits

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2
Q

Digitalization

A

Organizational and social changes as a consequence of digitization

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3
Q

Some examples of digitalization trends

A
  1. Mobility
  2. Cloud computing
  3. Social media
  4. Internet of Things
  5. Big data
  6. Data Analytics
  7. Artificial intelligence
  8. Machine learning
  9. Blockchain
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4
Q

Big Data challenges in Accounting

A

Assurance services
Financial and Managerial accounting
Research and education
Challenges common to all areas

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5
Q

Pace of change drivers according to Oracle

A
  1. Sustainability
  2. Brand reputation
  3. Security
  4. Compliance
  5. Talent
  6. Competition
  7. Customer expectations
  8. Innovation
  9. Technology governance
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6
Q

Ability to respond constraints according to Oracle

A
  1. IT infrastructure
  2. Data
  3. Processes
  4. People & Culture
  5. Operating model
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7
Q

Accountant’s work has according to Oracle

A

Shifted from accounting activities to analysis and actions

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8
Q

Business Intelligence

A

A broad category of applications and technologies for:
1. gathering
2. storing
3. analysing
4. sharing
5. providing access to data
in order to help users make better business decisions

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9
Q

Data Analytics

A

Synonym for business intelligence

Broader term that includes statistical and mathematical processing capabilities

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10
Q

What is our position and responsibility as accountants?

A

Risk & responsibilities
Boundaries & protection
Performativity of data (illusion of objectivity)

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11
Q

Analytics three dimensions

A

Descriptive
Predictive
Prescriptive

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12
Q

Challenges for the accounting profession

A
  1. Automation of small, structured tasks
  2. More analytical tasks
  3. Structured tasks are needed to understand analytical tasks
  4. Humans are hesitant to decide against analysis
  5. System only as good as the humans programming it
  6. Disregarding of implicit knowledge
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13
Q

Accountants can

A
  1. Be aware
  2. Become an interface between technology, regulation, and business
  3. Get involved in standard setting
  4. Educate about performativity of quantification
  5. Develop control mechanisms
  6. Enable transparency through reporting and giving account in different forms
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14
Q

Digitalizational logics to create value

A
  1. Automize
  2. Inform
  3. Transform
  4. Visualize
  5. Analyse
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15
Q

What are the implications of big data on Assurance services

A

Audit risk
Service organisation controls
Compliance audits

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16
Q

What are the implications of big data on financial and managerial accounting?

A

Strategic partner role
Convince managers of analytics benefits
Monetisation of big data

17
Q

What are the implications of big data on accounting research and education?

A

Student’s career path

Course credits limitation

18
Q

What are the big data challenges common to all areas within accounting

A

Analytical skills
Privacy and security
Creative thinking
Automation threat

19
Q

What does the accountants risk & responsibilities mean?

A

Security & quality (from variety, volume, and details of data)
Ethical conduct & human rights (appropriate use of data)
Shift in responsibility and power relations
Cybersecurity

20
Q

What does boundary & protection mean?

A
  • External regulation and enforcement (coercive pressure)
  • Self-regulation of the industry (reputation and customer trust)
    (Who is capable of regulating and enforcing?)
    (Upstream and downstream monitoring of data)
  • Transparency
  • Extent of customer control over data use
21
Q

What does performativity of data (illusion of objectivity) mean?

A
  • Numbers and quantification give the illusion of objectivity
  • Through representing reality we also create reality
  • Bias in use
  • Bias in design
22
Q

What’s bias in use?

A

Anchoring
Availability
Unintentional blindness
Confirmation bias

23
Q

What’s bias in design?

A

What is collected
How it is transformed
How it is analysed

24
Q

How can Simons (1995) four levers of control be used in a digital environment? (From Capgemeni lecture)

A

Cultural controls
- Relate analytics initiatives to organisational culture, what are the gaps and the risks?

Boundary controls
- Data security and governance

Interactive controls

  • Business & IT forums and collaborations for cross functional exchanges
  • Exchange of data and information
  • Data literacy capabilities
  • External partnerships

Diagnostic controls
- Proactive solutions (predictions, cause & effects)

25
Q

What are smart, connected products? (Consist of) (Porter & Heppelmann, 2014)

A

Physical components
Smart components
Connectivity components (one-to-one, one-to-many, or many-to-many)

26
Q

What can smart, connected products do? (Four levels) (Porter & Heppelmann, 2014)

A

Monitoring
Control
Optimization
Autonomy

27
Q

Porters five forces in a digitalisation setting (Porter & Heppelmann, 2014)

A
  1. Bargaining power of buyers
    - Digitalisation expands opportunities for product differentiation.
    - Closer customer relationship through customer data
  2. Rivalry among competitors
    - Product differentiation and value-added services
  3. Threat of new entrants
    - Barriers to entry in the form of high fixed costs, complex product design, embedded technology, and IT infrastructure
    - First mover advantage in collecting data
    - Barriers can go down when digitalisation invalidates strengths of assets
  4. Threat of substitutes
    - New types of substitution threats, such as wider product capabilities
    - Product-as-a-Service models
  5. Bargaining power of suppliers
    - New types of suppliers
    - Connectivity components deliver more value relative to physical components
28
Q

Redefining industry boundaries (Porter & Heppelmann, 2014)

A 
Product 
Smart product 
Smart, connected product 
Product system 
System of systems
29
Q

The net effect of smart, connected products on industry structure will vary across industries, but some tendencies seem clear (Porter & Heppelmann, 2014)

A
  1. Rising barriers to entry thanks to first mover advantage in data collection and analysis
  2. Consolidation pressures will be amplified in industries whose boundaries are expanding (a single product manufacturer will be in disadvantage to a multiproduct company)
30
Q

The implications of smart, connected products for the value chain (Porter & Heppelmann, 2014)

A
  1. Product design
    - Hardware standardisation through software customization
    - Enable personalization
    - Support ongoing product upgrades
    - Enable predictive, enhanced, or remote service
  2. After-sale Service
    - Predictive maintenance and service productivity
    - Take advantage of product data that can reveal existing and future problems
  3. Marketing
    - New kinds of relationships with customers
  4. Human resources
    - Recruit new skill sets
  5. Security
    - Need for robust security management
31
Q

Strategic risks with smart connected products (Porter & Heppelmann, 2014)

A
  1. Adding functionality that customers don’t want to pay for
  2. Underestimating security and privacy risks
  3. Failing to anticipate new competitive threats
  4. Waiting too long to get started
  5. Overestimating internal capabilities
32
Q

How is data reshaping the value chain at its core? (Porter & Heppelmann, 2015)

A

The new data resource

Data analytics

GM1403: Management Accounting, Strategy and Control (5 decks)

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