Understanding the concept of data-driven organizations : A study on how data-driven approaches impact management accounting
Abstract
During the last decade, an increasing amount of data has shifted the focus on how organizations can utilize this data at best. Along came a new concept, data driven. Data-driven organizations are consistently being praised for their ability to be more efficient and productive. However, the concept of data driven usually puts its focus on the analytics business functions, but it is unclear how being data driven affects other functions outside the data analytics domain. In this thesis we aim to provide insight into what it really means to be data driven, and how it impacts the management accounting function. With this in mind, we sought to explore the following research question.
What are the consequences of data-driven approaches for management accounting?
We seek to explore this concept through a mixed methods research approach, beginning with a review of existing literature on data-driven organizations and how different data- driven approaches are implemented in management accounting. Moreover, we conduct a survey directed to management accountants in Norwegian companies to answer our main research question. The analysis incorporates both quantitative and qualitative data from the survey.
By answering the main research question, we identify three important elements of data-driven approaches in management accounting. First, we find that management accountants primarily rely on descriptive analysis in their decision-making processes, where experience and intuition play significant roles. Second, management accountants deal with rigorous information systems that provides them with great access to data. Consequently, they need to be proficient in gathering, processing and analysing data. Here, we identify an analytics competency barrier that potentially prevents management accountants from acquiring more advanced analytical capabilities.