Article review of “The effects of cloud technology on management accounting”: for advanced management accounting study

Article review of “The effects of cloud technology on management accounting”: for advanced management accounting study

 

How to present the reference of this article in Harvard reference format?

Strauss, E., Kristandl, G. & Quinn, M., 2015. The effects of cloud technology on management accounting and decision making. Research Executive Summary Series, 10(6). Chartered Institute of Management Accountants, London. Available at: [URL if available] [Accessed date].

 

What are the key research issues the article wants to address?

The article identifies the following key research issues it aims to address:

·        To explore the reasons why businesses adopt or do not adopt cloud technology.

·        To assess the extent of cloud technology use in finance, management accounting, and similar systems.

·        To establish how cloud technology affects the provision of decision-making information, particularly focusing on information format and any change in the role of the management accountant in providing information.

These research objectives are outlined to gain initial insights on how cloud computing affects management accounting and decision making, addressing a gap in the existing literature on the subject.

 

What research methods have been used in this study?

The study used a mixed methods research approach, combining the following methods:

1.    Literature Review: The researchers conducted a review of information technology literature to gain foundational knowledge about cloud technology, its benefits, and challenges.

2.    Expert Interviews: Three interviews were conducted with technology experts:

·        A founder/managing director of a cloud storage solution provider (technical expert).

·        A founder/managing director of a technology firm that uses and sells cloud technology.

·        A sales manager from a leading accounting software provider offering both traditional desktop and cloud-based software. These interviews provided technical insights and practical perspectives on cloud technology adoption.

3.    Survey: Based on the findings from literature and interviews, a survey was designed targeting primarily small and medium-sized enterprises (SMEs). The survey was sent to members of the Controller Panel at WHU Otto Beisheim School of Management, Germany, which consists mainly of heads of controlling. Out of 182 contacted, 139 responses were received (76% response rate), covering a broad range of industries with over 90% of firms classified as SMEs.

 

This mixed methods approach aimed to gather both qualitative and quantitative data to explore cloud technology usage in management accounting thoroughly.

 

Describe two main theories employed in this study.

The study does not explicitly state specific named theories employed but references key theoretical perspectives and concepts that underpin the research:

1.    Technology Adoption and Change Theory: The study is grounded on the idea that advances in information technology drive changes in management accounting and decision-making processes. This is supported by references to prior research indicating that technological progress is a key force influencing management accounting practices (e.g., Scapens et al., 2003; Dechow et al., 2007). The notion of cloud computing as a utility model providing on-demand, scalable resources aligns with theories of technology adoption that focus on perceived benefits, risks (such as data security), and organizational readiness affecting uptake.

2.    Information and Management Control Theory: The interaction between information technology and management control systems is another theoretical foundation cited. For example, Dechow, Granlund, and Mouritsen (2007) emphasize the relationship between IT and management control practices. This relates to how cloud technology affects information provision for decision making, information formats, and the management accountant's role—highlighting the theory that information systems influence managerial control and decision-making structures.

Thus, although not named as "main theories," these perspectives form the theoretical basis for understanding cloud technology's influence on management accounting and decision making in the study.

 

Highlight 3 main empirical findings of this article.

The three main empirical findings of the study are:

1.                                  Low Adoption of Cloud Technology in Finance and Management Accounting Systems: Only about 25% of respondent firms have adopted cloud technology for business systems beyond common uses like email. Within this group, finance and management accounting systems are the least likely to use cloud technology compared to other areas such as CRM and other business processes.

2.                                  Data Security Concerns as the Primary Barrier to Adoption: The overwhelming reason for not adopting cloud technology is concern over data security and protection. Despite technology experts suggesting that cloud providers often offer more robust security than typical SME configurations, businesses remain wary, indicating a gap in understanding or communication about actual security benefits.

3.                                  Cloud Technology Improves Decision Making but Collaboration Gains Are Limited: An overwhelming 93% of respondents agreed that cloud technology has contributed positively to decision making, with 32% stating it improved decision making compared to previous systems. However, the expected collaborative advantage is less than anticipated, with 77% reporting no significant change in the level of involvement in decision making using cloud technology versus previous systems.

These findings highlight the current state of cloud adoption in management accounting, the barriers faced, and the impact on decision-making practices

 

Describe 2 main claims of the article in terms of Toulmin's model of argument.

Using Toulmin's model of argument, two main claims of the article can be described as follows:

1.    Claim 1: Cloud computing offers significant advantages for management accounting and decision-making, but adoption in finance processes is limited primarily due to data security concerns.

·        Grounds (Evidence): Survey results show only 25% of firms have adopted cloud technology for business systems, with finance and management accounting systems least likely to use it. Data security concerns were identified as the primary reason for non-adoption, despite technology experts asserting cloud security can be stronger than typical SME systems.

·        Warrant (Reasoning): Because cloud computing can deliver cost savings, scalability, ease of administration, and flexible access to information, its advantages should encourage adoption. However, concerns over security act as a barrier that limits uptake in finance-related systems.

·        Backing: Interviews with technology experts confirm both the advantages of cloud computing and that most firms default to private or hybrid clouds to mitigate security concerns. The literature also supports cloud computing advantages and security features.

2.    Claim 2: Cloud technology improves access to decision-making information and contributes positively to decision making, but the collaborative advantage is less realized than expected.

·        Grounds (Evidence): 93% of respondents agree cloud technology contributes to decision making; 32% say it improves decision-making compared to prior systems. However, 77% report the level of involvement in decision making (collaboration) remains the same compared to earlier systems.

·        Warrant (Reasoning): Cloud technology's ubiquitous access and mixed graphical/numeric reporting formats simplify information provision and access, enabling better decision making. Yet organizational and cultural factors may limit increased collaboration.

·        Backing: Survey data show most cloud access occurs on corporate devices during regular hours, with less use of personal or mobile devices, indicating limited change in physical or temporal decision-making contexts.

These claims integrate evidence, reasoning, and contextual support to argue both the potential benefits and the current limitations of cloud technology in management accounting

 

Describe 2 main research limitations of the study.

Two main research limitations of the study are:

1.                        Sample Composition and Size: The study’s survey largely involved small and medium-sized enterprises (SMEs), with over 90% of respondents classified as SMEs, primarily from Germany and surrounding regions through the Controller Panel at WHU Otto Beisheim School of Management. This limits the generalizability of the findings to larger firms or firms in other countries where cloud adoption and cultural work practices may differ significantly.

2.                        Exploratory Nature and Depth of Analysis: The research was exploratory with a relatively small sample size (139 responses) and limited qualitative data on how cloud technology specifically affects the evolving role of management accountants and detailed decision-making processes. The study did not provide in-depth accounts or longitudinal analysis, thus restricting insights into long-term impacts or detailed transformational changes arising from cloud adoption.

 

These limitations suggest that further research is needed to examine diverse organizational contexts, larger samples, and deeper qualitative inquiry into the evolving implications of cloud technology for management accounting.