Digitization of the budgeting process: determinants of the use of business analytics and its effect on satisfaction with the budgeting process

Abstract

Since the use of business analytics promises automation of business processes and time savings, the budgeting process seems predestined for the integration of analytical methods. Therefore, this study examines the determinants of the use of business analytics in the budgeting process and its effect on satisfaction with the budgeting process. Specifically, we focus on one technical determinant (data infrastructure sophistication) and the importance of the two major budgeting functions (the planning and the evaluation function), which could affect the degree of dissemination of using analytical methods. Based on a survey among German companies, we find, as predicted, that the sophistication of the data infrastructure is positively associated with the use of business analytics in the budgeting process. Further, the more a company emphasizes the planning function, the greater the extent to which business analytics is used in the budgeting process. In contrast, we find no association between the evaluation function and the use of business analytics in the budgeting process. Finally, we find that the use of business analytics is positively associated with satisfaction with the budgeting process. Thus, the use of business analytics can help to overcome dissatisfaction with traditional budgeting systems. Overall, our findings provide practitioners with valuable indications under which circumstances the use of analytical methods appears reasonable.

Exploring the programmability of management accounting work for increasing automation: an interventionist case study

“…This suggestion contradicts with some earlier studies (cf. Bhimani and Willcocks, 2014; Warren et al , 2015; Al-Htaybat and von Alberti-Alhtaybat, 2017; Gärtner and Hiebl, 2018; Sutton et al , 2018; Bergmann et al , 2020; Knauer et al , 2020). As our study provides a clear inconsistency to this stream of literature, we suggest that more research should be conducted to unveil the actual process implications of management accounting automation.…”

“…Some authors connect digitalization to efficiency, efficacy and automation (e.g. Bhimani and Willcocks, 2014; Sutton et al , 2018; Bergmann et al , 2020; Knauer et al , 2020), thus implying that digitalization changes accounting processes.…”

Big Data’s Disruptive Effect on Job Profiles: Management Accountants’ Case Study

“…The interest in DA of management accounting researchers is in an emerging phase; for this reason, papers from 2010-2016 are mostly conceptual. Starting with 2017 research interest in empirical quantitative management accounting has increased considerably; thus, case studies based on semi-structured interviews are revealing more as regard the MA perception about BD and DA (Arnaboldi et al 2017b;Andreassen 2020;Bergmann et al 2020). The general conclusion of the studies is that not enough is known about how MAs are using DA, specifically, what tools they utilize, what type of analysis is being performed and what skills and competencies are required.…”

“…Bhimani (2020) begins with a summary of digital data and management accounting, specifically, why a reconsideration of research methods is needed (Bhimani 2020). The papers' approaches in this volume have been influential in the field because they have targeted the outcome of digitalization on main controlling processes: budgeting and reporting (Bergmann et al 2020), and on the overall control system (Vitale et al 2020).…”

Matching the Controller Role: Individuals vs Companies

“…The role of controllers is also associated with a broader and more strategic function that seeks to maintain the logic and rationality in decision making processes by adding value to the managerial and administrative tasks and being the anchor that deploys the business strategy in the literature that studies the business partner (Goretzki et al, 2013;Granlund & Lukka, 1997;Janin, 2017;ten Rouwelaar et al, 2018). Technological advances facilitated the accomplishment of the role defined in the early 1970s as a qualified analyst and as a reasonably precise forecaster (Crampton, 1970) who, due to the digitalized and integrated information systems, focuses more on the analysis and interpretation of information floods coming in high volumes, velocity, and variety from all the functional areas, than on the mechanical tasks to collect data, and manually process them (Bergmann et al, 2020;Chapman & Kihn, 2009;Vitale et al, 2020). Such changes moved the role from an initially operational level described as a "bean counter", "score keeper" or even "watchdog" to a strategic position called a "business partner", "consultant" or "business advisor" (Baldvinsdottir et al, 2009;Granlund & Lukka, 1997;Pasch, 2019;Yazdifar & Tsamenyi, 2005).…”