The role of a predictive analytics project initiator in the integration of financial and operational forecasts

Abstract

Purpose -This paper investigates the initiation of accounting information system projects. Specifically, it examines the role of the predictive analytics (PA) project initiator in the integration of financial and operational sales forecasts.Design/Methodology/Approach -The study uses a field study method to address the studied phenomenon in 8 Finnish companies that have recently adopted PA systems. The data is primarily based on 19 interviews in the companies and 5 interviews with the PA consultants.Findings -We found that initiators appear to play a major role regarding the degree of integration of financial and operational sales forecasts. The initiators from an accounting function have a tendency to pay more attention to the integration than the representatives from other functions, such as operations and sales.Practical Implications -Our study also makes a practical contribution to companies in showing and discussing the important role of the accounting department as an initiator of a project if the target is to achieve a tight coupling of financial and operational forecast figures, i.e., "one set of numbers." Originality/Value -Even though companies have increasingly adopted PA systems in recent years, we still know little about how the initiation affects the design of accounting information systems overall.

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

“…In recent years, there has been substantial progress in data storage and processing technologies so that managers can now incorporate new opportunities in collecting and handling data into their decision-making (Brynjolfsson and McElheran 2016). In addition, BI systems are generally designed in such a way that they can also be used effectively in managerial control (Huikku et al 2017). As such, BI comprises a number of different analysis techniques or simply put business analytics.…”

“…What distinguishes predictive analytics is its proactive focus on forecasting, while descriptive and diagnostic analytics mainly concentrate on the analysis and reporting of past data (Halper 2013). In other words, predictive analytics uses an inductive logic instead of a deductive logic (Huikku et al 2017). Finally, prescriptive analytics refers to the question of what should be done and follow an optimizing approach (Gandomi and Haider 2015).…”

“…Since budgeting involves a number of recurring process steps, the effects of digitization could be integrated comparatively quickly into companies' budgeting processes (Warren et al 2015). Further, there is a general upward trend for using quantitative modeling (Fotr et al 2015), which is expected to benefit budgeting as it may produce more accurate forecasts for annual budgeting and rolling forecasts (Huikku et al 2017). Especially in a volatile business environment, more accurate forecasts could prove to be a tremendous competitive advantage (Hofer et al 2015).…”

Determinants of information system quality and data quality in management accounting

“…Organizations may also benefit from best practice outlines. In particular, consultants can initiate and advance IS projects within organizations (Huikku et al 2017). In general, consultants' tasks encompass the analysis of the company's information requirements, advice on adequate hardware and software, and support in the implementation of IS (Thong et al 1997).…”

“…In some cases, full integration may not be possible because concurrent supplements are employed outside the system(Dechow and Mouritsen 2005). If the requirements of IS users diverge, data integration may not even be appropriate in terms of the cost-benefit ratio(Huikku et al 2017). This applies, for example, when accounting and operational departments have to prepare forecasts with different frequencies.…”