Timo Hyvonen

MANAGEMENT ACCOUNTING AND INFORMATION SYSTEMS: ERP VERSUS BOB

The purpose of this study is to compare the use of enterprise resource planning (ERP) and best of breed (BoB) standalone systems in practice. The data for the study were collected through a postal questionnaire in 300 large and middle-sized industrial units in Finland. The questionnaire addressed questions concerning IS implementation (why, how and by whom the IS project was introduced), management accounting function, and the use of advanced management accounting techniques. The results obtained indicate that financial departments have been more interested in traditional BoB systems, while other departments have concentrated more on ERP solutions. Further, as the articulated motives behind the IS project were strategic, and moreover technical in nature, the solution in most cases was ERP, while in the cases where motives were either strategic or technical, the choice was BoB. Otherwise, there were no statistically significant differences between the groups of BoB or ERP adopters, and the problems perceived in management accounting or the adoption of advanced management accounting techniques (e.g. ABC, ABM and BSC).

Institutional Logics, ICT and Stability of Management Accounting

The purpose of this paper is to study the institutional logics of how and why two case units in the Finnish Defence Forces have reacted differently to external pressures originating from the State Audit Office to change their management accounting systems. The situation is made complex due to the fact that in military organisations, accountants’ tasks have traditionally consisted of bookkeeping and financial reporting, while management accounting tasks especially (e.g. planning and control) have been performed predominantly by military personnel, who can be called hybrid accountants. The data for this study consists of project memos and interviews with people involved in designing and implementing enterprise-resource-planning (ERP)-linked cost accounting and reporting systems. In the case unit where management accounting and control had become institutionalised as a part of the uniformed officers professional sphere, various resistance strategies (i.e. compromise strategy/pacifying tactics, avoidance strategy/buffering tactics and defiance strategy/dismissing tactics) were adopted. However, where this was not the case, the response was acquiescence. Despite the differences in responses to institutional pressure, the outcome for management accounting was the same. In the first case, demands for change were resisted, and in the second case, the old management accounting system was transferred into new information and communication technology (ICT) infrastructure without any significant change in content.

Contract-Based budgeting in health care: A study of the institutional processes of accounting change

Abstract The managed care system is a provider–purchaser model, in which the hospitals sell their output at a predetermined price to public sector purchasers. The purpose of contract-based budgeting (CBB) is to control the flow of resources in this system so that what is budgeted as revenue in the hospitals is budgeted as an expense in the municipalities. This study explores the process of how budgetary bias prevails in municipal and hospital district budgets despite the introduction of CBB. The data, which consists of budgetary documents and interviews, is informed by the framework by Burns and Scapens (Management Accounting Research, 11(1), pp. 3–25, 2000). The results obtained indicate that the changes in budgeting practices were not revolutionary, but incorporated the prevailing institutionalised practices into new ones. It also appears that the municipal frame budgets, conservative revenue estimation and the strict requirements for budgetary balance have a great potential to resist demands of change originating from outside.

Ethos at stake: Performance management and academic work in universities

Higher education has been subject to substantial reforms as new forms of performance management are implemented in universities across the world. Extant research suggests that in many cases performance management systems have disrupted academic life. We complement this literature with an extensive mixed methods study of how the performance management system is understood by academics across universities and departments in Finland at a time when new management principles and practices are being forcefully introduced. While our survey results enabled us to map the generally critical and negative view that Finnish scholars have of performance management, the qualitative inquiry allowed us to disentangle how and why our respondents resent the ways and means of measuring their work, the assumptions that underlie the measurement, and the university ideal on which the performance management system is rooted. Most significantly, we highlight how the proliferation of performance management can be seen as a catalyst for changing the very ethos of what it is to be an academic and to do academic work.

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

Purpose The purpose of this paper is to investigate 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 eight Finnish companies that have recently adopted PA systems. The data are primarily based on 19 interviews in the companies and five interviews with the PA consultants. Findings The authors 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 The 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. The central contribution of the paper, therefore, is to show that if a PA project is initiated by the accounting department, data integration becomes more likely. It contributes also to the discussion related to the appropriateness of data integration in the context of forecasting.

Ambiguity of financial environmental information : a case study of a Finnish energy company

Purpose - Voluntary corporate social responsibility reporting has developed into an everyday activity for many commercial organizations, and scholarly interest in these practices continues to increase. This paper focuses on one subset of these disclosures, namely the figures relating to environmental expenditures and investments published by various organizations. The purpose of this paper is to provide insights into the nature, role and significance of such financial environmental information. Despite their seeming accuracy and preciseness, little is known about how such financial environmental information is constructed and subsequently used in organizational settings. Design/methodology/approach - The paper is based on a qualitative case study focusing on a Finnish energy company. We build our investigation primarily on 26 semi-structured interviews with employees at all organizational levels, which we supplement with various documentary sources. Our interpretation draws on the notion of loose coupling, which we use as a method theory to provide a better understanding of this complex organizational practice. Findings - We highlight the ambiguous and imprecise nature of the outwardly accurate figures provided by the company. We argue that disclosed financial environmental information is only loosely coupled with various dimensions, including the organization’s actual activities, its environmental impacts and organizational decision-making. Originality/value - Our findings contrast with those of some prior research, which has considered financial environmental information highly valuable. As for broader implications, the paper discusses the accuracy of public records based on such ambiguous organizational figures.