Web technologies and mobile devices are driving enterprises to embark on a new wave of digitalization that is reshaping business and the global economy. Modes of data analysis in use now enable extreme corporate agility, swift strategic re-focus and fast resource allocation decisions across many businesses. Established business fundamentals are being eclipsed including accounting expertise. Conventional financial analysis is proving ineffective in dealing with the information needs of executives in organizations facing digital transformation. In fact, accounting faces a disruption unprecedented in scale. This book shows how the new digitalization wave is impacting financial expertise and the transformation in accounting that is now essential. It will be written in a direct, straight forward style with extensive explanations and a wide range of practical illustrations and case studies.

Al Bhimani, Ph.D.,is Professor of Management Accounting at the London School of Economics. He is the former Head of the Department of Accounting at LSE and Founding Director of LSE Entrepreneurship. He is active both at CIMA and the AICPA. He speaks internationally and has written several books (his most recent is the co-authored Management and Cost Accounting, Pearson, 2019).

Preface xi

Acknowledgments xv

About the Author xvii

Chapter 1 Accounting Disrupted 1

Global Forces Reshaping the Digital Economy 5

What Do Businesses Want? 10

With Great Data Power Comes Great Responsibility 12

Why Data is Growing 13

If Finance Stands Still 15

Notes 17

Chapter 2 Unleashing Digitization 19

Why is Finance Changing? 22

The Rise of Digital 24

Decision-Making and Information: A Warning! 35

Notes 38

Chapter 3 The Trouble with Finance 41

Business is No Longer Linear 43

Strategy Folklore 45

The Importance of “?s” 50

High Sales Volume Means High Profits, Right? 54

How Do New Technologies Disrupt Accounting? 56

What Now? 60

Notes 61

Chapter 4 As If Managing Costs Mattered 63

Accounting Pillars 66

A Risk from Which There is No Return 66

Volume is Half the Story 69

Growth Through Scope 76

Notes 82

Chapter 5 Learning is Everything 83

Learn Fast: Cut Costs Faster 85

Intelligent Learning 87

Push the Pedal 90

Notes 93

Chapter 6 Performance Changes 95

New Targets for Performance Management 98

Whose Performance, Anyway? 99

Operations Get Closer to Strategy 100

Incentivizing Digitalization 101

Data’s Consequences 104

Digitalization Makes All Enterprises Unlike 105

On Being Data-Centric and Intuitive 106

Predictive Performance Management 108

How to Track Digitalization 110

Notes 111

Chapter 7 Digitalization and Auditing 113

Big Data: Big Audit Questions 116

RPAs, AI, and Audits 118

Blockchain is Here 121

Notes 128

Chapter 8 Better Change Your Mind 129

Unite and Conquer: The New Data Mantra 132

What Skills? 137

Risking Digital 140

The Hidden Side of Data: Careful! 144

What “New Normal”? 147

Notes 150

Resources 153

Index 157