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Executive Summary This report documents a research project that sets out to explore the implications of data warehousing for management accountants and management accounting. The research suggests that management accountants are actively involved in shaping the direction of data warehousing in their organisations. Managers’ information needs appear to have grown rapidly in recent years, and with them the need to manage that information for the benefit of the organisation. This growth has occurred for a number of reasons: ◆ ◆ ◆
Today’s global markets are more complex and exhibit greater uncertainty than formerly. The modern, ‘delayered’ organisation has more complex relationships with its business partners and may have outsourced some of its routine functions. With increasingly discerning consumers, there is a need for more information about their specific needs and wants.
For these reasons and others, the management of information is now a central, strategic issue for organisations, and data warehousing is being promoted as a means of supporting that management. Many organisations have accumulated a diverse set of systems spread over a variety of platforms. Such systems were often designed to process large volumes of routine transactions as efficiently as possible, rather than to provide management information. Thus, while the organisation may be data-rich, it is information-poor. Managers have responded by building a variety of stand-alone information systems, often based on the ubiquitous spreadsheet, to meet their operational information needs. The result is a number of information ‘pockets’ across the organisation with no integrated view of the business processes. Data warehousing can provide an integrating mechanism across the organisation’s existing systems. The data-warehousing process encompasses the extraction of data from existing operational databases, the transformation of that data into standard formats, the storage of the data in a data warehouse (a large database), and the provision of a variety of user-oriented views of the stored data. It enables staff at all levels of the organisation to have appropriate access to data relevant to their tasks, be these operational or strategic. A questionnaire survey was undertaken of CIMA members employed as management accountants and financial controllers in a variety of industries. Although intended mainly as a means of gaining access to companies that had implemented, or were planning to implement, data warehousing, the survey provided evidence of considerable involvement by management accountants in the design and implementation of data-
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DATA WAREHOUSING AND THE MANAGEMENT ACCOUNTANT
warehousing systems. It also provided evidence that data warehousing is enabling management accountants to enhance their role by moving away from being passive providers of paper-based routine reports to being analysts and interpreters of information that adds value to the business. A number of the respondents to the survey were contacted together with some of the researcher’s own contacts, and ten site visits were undertaken. The companies, which were at different stages in their development of data warehousing, are from a variety of manufacturing and service industries and range in size from small to very large. In seven of the companies, accountants were interviewed, while in the other three the interviewees came from other functions. The interviews lasted on average about two and a half hours and were supported by documents and demonstrations. Generally, the data-warehousing projects had been instigated for business rather than technical reasons. This approach continued with the development and implementation phases being managed by business-led teams in which management accountants played important or leading roles. A variety of data-warehousing architectures were found in the companies visited. It would appear that no single data-0warehousing model is applicable in all organisational contexts. Although the interviewees generally expected data warehousing to affect management accounting and the role of the management accountant, they anticipated a positive effect. They had experienced, or expected to experience, an enhanced, more proactive role. The management accountants interviewed on-site demonstrated an understanding of their organisation’s business processes and its environmental context. They also understood their organisation’s data structures and had developed an understanding of relational database management systems and their capabilities. Such attributes should be provided by the training and development of management accountants if they are to continue in their information management roles.