“A Study on the Challenges and Sustainable Business Opportunities for CMA in the Digitalized Er

International Journal of Accounting and Financial Management Research (IJAFMR) ISSN(P): 2249–6882; ISSN(E): 2249–7994 Vol. 10, Issue 1, Jun 2020, 1–8 © TJPRC Pvt. Ltd.

“A STUDY ON THE CHALLENGES AND SUSTAINABLE BUSINESS OPPORTUNITIES FOR CMA IN THE DIGITALIZED ERA WITH SPECIFIC REFERNCE TO CHENNAI CITY” S. A. MADHAVAN Research Scholar, D. B. Jain College, Chennai, Tamil Nadu, India ABSTRACT In business, digitalization most often refers to enabling, improving and/or transforming business operations or business models/processes by leveraging digital technologies and a broader use of digitized data, turned into actionable, knowledge, with a specific benefit in mind. IoT is a core component of industrial transformation efforts across the globe, including Industry 4.0 and the Industrial Internet. Cost and Management Accountant (CMA) can play an important role in Information Technology. They may function as Business Analyst, Project Manager, Quality Assurance, etc. CMAs has a role in developing Software right from Analysis of business requirements, Review of designs to detect defects at an early stage, Assuring the standards to meet the specifications, Functional testing such as User Acceptance Testing/Business

Cost Controlling of Software Projects in Finance department, Back office operations, Transaction Processing, MIS, Financial Analysis and forecasting in IT enabled Services, Business/Product Development and Managing Finance in Start- ups. This research paper aims to bring out the opportunities and Challenges for CMAs in the digitalized era of business.

KEYWORDS: Digitalisation, IoT, Tech-Savvy, Challenges to CMA & Crypto Currency

Original Article

Acceptance testing and Managing end to end Software development project. They also play a vital role in Budgeting and

Received: Oct 21, 2019; Accepted: Nov 11, 2019; Published: Jan 21, 2020; Paper Id.: IJAFMRJUN20201

INTRODUCTION IoT means connecting physical objects (or devices) through internet or network. It is a network of internet or network enabled objects connecting the unconnected.. It may be Machine to Machine or Machine to Person, Person to Person or collection of these with an objective of exchanging data between and among them. IoT links Data, People, Process and Things. IoT has evolved from convergence of wireless, Micro-Electro Mechanical Systems, Micro Services and the Internet. With the emergence of Internet, Operational technology rooted into IT and transformed into Internet of Things (IoT). IoT collaborates with the support of SMART (Sensors, Mobiles, Applications, Real-time and technology). IoT devises further help manufacturers to identify new efficiencies through data collection, data monitoring an data analysis for understanding the performance of the factory. This research article focus on the need for CMAs to understand the business opportunities that are created by application of Information technology to the industries and business in the form of Big Data, Artificial Intelligence, Data Mining, Predictive analysis, Cloud computing, GST Audit, Online Compliance services, etc.

Application of IoT IoT can be divided into 3 categories based on usage and clients base:

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Consumer IoT comprise of the connected devices such as phones, smart cars, watches, laptops, connected appliances, and entertainment systems.

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Commercial IoT consists of things like device trackers, inventory controls, and connected devices.

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Industrial IoT encompasses connected electric meters, waste water systems, flow gauges, pipeline monitors, manufacturing robots and industrial devices and systems.

IoT brings down the cost of down time of machinery which significantly lowers the down time of machines

and early detection of damage in plant. IoT is not only limited to manufacturing or production but also rapidly expanding in banking, health, urban development, environment surveillance, services, telecom, housing, agriculture sectors. Cost and Management Accountants (CMAs) can be implemented IoT in Inventory Management, Energy Monitoring, connecting to shop floor, Monitoring equipment and employee, reduction of overheads and safety and health and environment measures.

REVIEW OF LITERATURE Lakshmana Rao U (2016), he suggested in his study that areas for CMA to implement internet of things are, inventory management, energy monitoring, connecting to shop floor, equipment and employee monitoring, overheads reduction, safety, health and environment. The study also concludes that one-man factory, self-driving vehicles, autonomous cars, guard-less surveillance, smart buildings, smart parking and instantaneous governance are the leading factors to achieve significant reduction in operating costs of a business in long-term. Moreover Internet Of Things (IOT) is the innovation way to achieve strategic cost management.

Venkateswaran P (2016), the results of the article identified that management accountant has a lot of opportunity to take up key positions in technology space like business analysis, design and contraction, quality assurance, functional testing, project management, finance department, business process outsourcing, and managing the back office operations.

They also effectively use IoT for Financial Analysis, Forecasting, Outsourced Business, Transaction Processing, MIS, Business Development, Product Development and Financial Management.

Gary Cokins (2013), he propounded in his study that the following are the seven major trends in Management Accounting i.e. Expansion from product to channel and customer profitability analysis, expanding role with EPM, shift to predictive accounting, Business analytics embedded in EPM methods, co-existing and improved methods, Management information technology and shared services and need for better skills and competency with behavioral cost management.

Analysis is about investigation and discovery. Business analytics creates more complex and interesting questions and the power to answer the same.

M. Krishna Moorthy, Ong Oi Voon, Cik Azni Suhaily Binti Samsuri, M. Gopalan and King-Tak Yew, (2012) analyzed the use of Information Technology (IT) in management accounting and also the potentials and drawbacks of adopting IT in management accounting. CIMA, the management accounting body have initiated Business Information Systems syllabus for the management accounting students. The application of IT in management accounting is becoming essential part of accounting to cater to the current needs of immediate business analysis and performance measures. The managers are depending on IT to deliver the requirement that traditional management failed to provide. However, the management can choose the system and technology according to their budget.

Impact Factor (JCC): 7.1593

NAAS Rating: 3.17

“A Study on the Challenges and Sustainable Business Opportunities for CMA in the Digitalized Era with Specific Reference to Chennai City”

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NEED AND IMPORTANCE OF STUDY Information Technology (IT) is a powerful instrument that can play a crucial part in making an organization’s business a successful one. The world has acknowledged that the dawn of internet computing would be very dominant and primary in the near future. The impact of the technology has been felt in many business areas such as trading, publishing, filming and many more. The IT and the internet have provided the opportunity for organizations to offer their products to customers anywhere in the globe. However, the growth of IT and internet remain stunning, the major portion are unexploited in accounting, particularly in Management accounting. Management accounting provides information on the budget, capital investment status, payback period etc. to the internal users and decision-makers. Many organizations have ignored the prominence of management accounting and focused only on financial accounting. The pivotal use of management accounting would be more significant for planning and control operations when it is incorporated with current IT. Information Technology revolutionize recurrently and accounting standards remain static for several years without any major change. IT and management accounting are vital to both small and large organizations. Accounting bodies and communities have instantly stressed the need for a shift in accountants’ education by increasing the knowledge of information systems and IT knowledge. IT has major impact on the costs, as implementing IT will result in big spending on the technology hardware, software and IT personnel. The study also shows that IT can improve accounting department efficiency and produce result effortlessly, timely and accurately.

The modern tech-savvy environment generate various business opportunities to the CMAs with respect to Accounting, Auditing, Taxation, Internal Control, Budgeting, Financial Management, Big data handling, Forecasting of business operations, etc., There are also certain challenges they may face in terms of Computer Fundamental, Software process, preserving data, Cost of implantation of IoT, Resource allocation, etc.

Objectives of the Study •

To understand the technology acceptance level of CMAs in business applications

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To identify the benefits of IoT in business operations leading to sustainable opportunities for Management Accounting Profession.

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To recognize the challenges for CMAs in successful implementation of IT

Hypothesis of the Study Ho A: The CMAs do not have sufficient exposure to technology enabled professional services Ho B: There is no significant association between the Overall Satisfaction level of CMAs in using IoT and the benefits they derive from the same.

Ho C: There are no barriers to successful implementation of IoT in Management Accounting Occupation.

Statistical Tools used for the Study •

Chi- Square Analysis to understand the level of acceptance and exposure of CMAs

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One Way Anova to know the benefits of using IoT in business applications

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Kruskal-Wallis test to identify the important challenges arising out of IoT applications.

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RESEARCH METHODOLOGY Research Design: An exploratory research design is applied to conduct the study Data Collection: Primary data is collected from the respondents using electronic questionnaires.

Sample Size: 105 consisting of CMAs either in practice or in employment services.

Type of Sampling: Non Probability Sampling – Purposive Sampling is adopted for study.

Limitations: The study covers the area of Chennai only for duration of 2-3 weeks.

ANALYSIS OF DATA AND INTERPRETATION Analysis 1 Table 1.1: Chi-Square Test for Association between Level of Acceptance of IoT and Satisfactory Services Training Duration of using Speed and Capacity Successful task and IoT Upgradation Chi-square 64.790a 6.400b 71.714c 55.619c df 3 2 4 4 Asymp. Sig. .000 .041 .000 .000 Source: Computed from Primary Data As the p value is less than 0.05, the test is statistically significant and Ho is Rejected. From the Chi- Square analysis it is evident that the level of acceptance of IoT among CMA is significant in Management Accounting profession.

Analysis 2 Table 1.2: One Way ANOVA to Test the Significance of Merits of IoT Benefits of IoT Sum of Squares df Mean Square F Sig. Between Groups 4.233 4 1.058 1.142.041 E-data replacing manual data Within Groups 92.681 100 .927 Total 96.914 104 Between Groups 5.368 4 1.342 2.514.046 Small firms Competing large business Within Groups 53.394 100 .534 Total 58.762 104 Between Groups 6.221 4 1.555 4.665.002 Providing current internal information Within Groups 33.341 100 .333 Total 39.562 104 Between Groups 6.221 4 1.555 4.665.002 Data mining and data warehousing Within Groups 33.341 100 .333 Total 39.562 104 Between Groups 4.757 4 1.189 2.631.039 Accuracy of data Within Groups 45.205 100 .452 Total 49.962 104 Between Groups 6.221 4 1.555 4.665.002 User friendly to choose Reporting design Within Groups 33.341 100 .333 Total 39.562 104 Between Groups 4.757 4 1.189 2.631.039 Long term investment decisions Within Groups 45.205 100 .452 Total 49.962 104 Between Groups 4.757 4 1.189 2.631.039 More Focus on core areas by CMAs Within Groups 45.205 100 .452 Total 49.962 104 Clear picture of organization to stakeholdersBetween Groups 4.757 4 1.189 2.631.039

Impact Factor (JCC): 7.1593

NAAS Rating: 3.17

“A Study on the Challenges and Sustainable Business Opportunities for CMA in the Digitalized Era with Specific Reference to Chennai City”

Within Groups Total Between Groups Within Groups Total

Competitive edge

5

45.205 49.962 4.757 45.205 49.962

100 104 4 100 104

.452 1.189 .452

2.631.039

Source: Computed from Primary Data The above One Way Anova table exhibits that Ho is rejected as the p value of all factors are less than 0.05 and understood that there is a significant association between the Overall Satisfaction level of CMAs in using IoT and the benefits they derive from the same.

Analysis 3 Table 1.3: Descriptive Statistics for Challenging Factors in IoT Challenging Factors N Mean Std. Deviation Computer Skills 105 4.03 .965 Quality of Technology 105 2.79 .768 Legal and Regulatory Frameworks 105 3.30 .746 Data Modeling 105 4.06 .745 Virtual Currencies/Crptocurrency 105 3.22 .693 Integration of IoT products 105 3.22 .693 Data Security and Privacy Concerns 105 3.22 .693 Developing assumptions 105 3.28 .672 Making forecasting 105 3.30 .649 Connectivity Problems 105 3.04 .649 Latest ERP software 105 3.23 .593 Artificial Intelligence and Automation 105 3.27 .576 Investment in Technology 105 3.12 .454 Appropriate reporting design 105 3.00 .000 Duration of IoT 105 3.30 .919

Artificial Intelligence /Automation

Legal and Regulatory Frameworks

Connectivity Problems

Data Security and Privacy Concerns

Investment in IoT

Integration of IoT product

Quality of Technology

Strategic and looking forward_

Appropriate reporting design_

Developing Assumptions

Making forecasting

Latest ERP software

Data Modeling

Computer Skills

Table 1.4: Kruskal-Wallis Test for Identifying the Challenges in IoT Application

Chi-square .449 .000 .129 .094 .285 .000 .037 3.621 .037 .333 .037 .003 .213 .137 df 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Asymp. Sig. .503 1.000 .719 .759 .593 1.000 .848 .057 .848 .564 .848 .960 .645 .712 Source: Computed from Primary Data Ho is summarily Accepted as the p value of Kruskal-Wallis test is greater than 0.05 for all the variables /challenge factors and hence inferred that there exists some notable barriers to adopt IoT in Management Accounting Profession in terms of Computer Skills, Data Handling, Upgradation of Software and hardware components, Intelligent Analytics, Quality of IoT, Cost, Security, Connectivity, Virtual Currencies/Crpto currency and Regulatory norms and Automation.

FINDINGS •

The Cost and Management Accountants have understood the importance of technology and their impact on Management accounting decision making. The parameters like the association of IoT, Speed and capacity of the

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Network, Successful task accomplishment and the requisite training by the ICMA are taken into consideration for this analysis.

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The advantage of IoT are strongly felt in terms of Paperless data handling, Data mining & data warehousing, Precise data for effective internal reporting, Capital budgeting decisions, portray of clear picture of organization to multiple stakeholders, getting competitive edge, customization of design and user friendly operations.

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The major challenges for CMAs in applying IoT are identified such as Computer skills requirements, Investment in technology, handling unstructured data, latest ERP software, developing assumptions and criteria for making forecasting, compatibility issues, Data Security and Privacy concerns, Connectivity problems, Legal and Regulatory norms and the threat from Artificial Intelligence/Automation.

SUGGESTIONS CMAs can effectively capitalize the technology using Internet by improving their computer and networking skills, moving towards real time electronic data processing and handling, filtering the redundant data for accurate forecasting, learning big data management, Cloud computing services, designing business models, auditing around the computer, Interactive Voice Response System, application of digital signatures/certificates, legal and regulatory knowledge, Usage of Crypto Currencies and Artificial Intelligence/Automation of process.

CONCLUSIONS From the above study it has been observed that IoT brings numerous opportunities to the Accounting Professionals in the areas of Business Analytics, Big data Management, Reporting Systems, Compliances, Automation of transaction process using AI, Capital Budgeting, Strategic decisions, etc. At the same time, there are certain challenging factors that pull the technology based applications by means of Unstructured data, training and upgradation, meeting the customer expectations, Connectivity issues, Quality issues, legal and regulatory framework, issues arising out of automation process, etc.

Inspite of the hurdles, the cutting edge advantage of IoT can never be underestimated especially in the domain of book keeping, transaction processing, computer enabled accounting, auditing in online and remote access mode, fulfilling regulatory norms pertaining to business operations and security codes, financial analysis using appropriate and accurate data, Utility of Digital Currencies in settlement of financial claims, and forecasting of projects, Inventory, Output and turnover. Certainly the technology has improved the analytical and decision making capabilities of CMAs. Scope for Future Research Further research can be made in data security and confidentiality, integration of IoT products with different IoT platforms, connecting various IoT devices, defining audit and logging standards for IoT components, Inventory Management using Commercial IoT, Crypto currency in financial transactions and Assets management, Data accuracy in Business Analytics, Electronic compliance systems, Block Chain technology etc.

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Lakshmana Rao U (2016), “IOT as a strategic Cost Management Tool”, The Management Accountant, pp 22-26.

2.

Venkateswaran P (2016), “Role of Management Accountants in Technology Space”, The Management Accountant, pp 55-57.

Impact Factor (JCC): 7.1593

NAAS Rating: 3.17

“A Study on the Challenges and Sustainable Business Opportunities for CMA in the Digitalized Era with Specific Reference to Chennai City” 3.

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Gary Cokins (2013), “Top Seven trends in Management Accounting”, EDPACS the EDP Audit, Control and Security newsletter, pp 21-29.

4.

M. Krishna Moorthy, Ong Oi Voon, Cik Azni Suhaily Binti Samsuri, M. Gopalan and King-Tak Yew ( 2012 ), “Application of Information Technology in Management Accounting Decision Making” International Journal of Academic Research in Business and Social Sciences Vol. 2, No. 3

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AUTHORS PROFILE

CMA. S. A. Madhavan is currently working as an Assistant Professor of Commerce at A. M. Jain College, Meenambakkam, Chennai. He is specialized in Finance and Accounts Domain and having two decades of experience in handling UG and PG Subjects He was a Finance Faculty member at ICFAI National College, Chennai and coordinator of Academic and Administrative tasks. He is also guiding the students for placement training. He holds a Post Graduation in Commerce, a qualified Cost and Management Accountant pursuing his Ph.D in Commerce. The author has published in reputed National and International journals of high impact factor and reach. He also participated in various Faculty Development Programmes and workshops organized by colleges and Madras university. He has presented papers in National / International conferences of emerging themes.

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