Charles Tilley, the chief executive of CIMA argues that management accountants can give companies a competitive advantage. Their ability to fully utilise business intelligence systems should be recognised by forward looking business leaders.

Accountants are sometimes described as being scorekeepers on the sidelines rather than players on the business team. At CIMA, we would contend that chartered management accountants are very much the opposite. CIMA members are trained to use their financial management knowledge to help drive business forward: they are the midfielders of the accountancy world.

The real value of management accountants has become more high profile recently as leading companies restructure their finance functions to improve efficiency. The growing trends towards outsourcing or centralising core accounting services has freed up a growing number of management accountants to do what they do best - adding value with their eyes fixed firmly on the corporate goalposts.

Effective decision-making core to competitive advantage

It could be argued that a company's decision-making capability is its key differentiator. As globalisation gives companies access to similar resources, and competitive forces cause most business processes to reach similar standards of quality and efficiency, effective decision-making is left as the key source of competitive advantage and this can lead to better strategies, differentiated brands and superior performance.

Traditionally, the management accountant's role in decision-making has been seen as providing management information. However the range and format of management information expected by decision makers, knowledge workers and operational staff, is changing. An effective decision-making process spans from how strategic decisions are informed and considered, through to how performance and risk is assessed and managed, to how routine operational decisions are guided, made and governed to ensure that the intended impact is actually achieved. The real value offered by management accountants is where they combine financial expertise with business understanding to support decision making throughout the process.

Leading organisations have already transformed their finance functions and deployed management accountants to support decision making. Elsewhere, a lack of shared vision in relation to finance's new broader role, has left many management accountants too busy with the routine duties of producing management information through the reporting cycle to provide decision support. Meanwhile, the monthly information packs they provide do not meet the Google generation's demand for real-time information.

Championing business intelligence

A potential solution could be for management accountants to champion the virtues of business intelligence (BI). Decision-support technology has come a long way in the past few years. Major companies in sectors which accumulate a lot of data on their customers such as banking and aviation, already use BI to achieve competitive advantage. As this technology is maturing, it is becoming more cost effective for a wider range of sectors and for smaller companies as well.

The term business intelligence is often used to describe either the technical architecture of systems needed to provide better information, or the reporting and analysis applications at the top of this stack. But BI isn't just about hardware and software. It's about recognising that a company's data and intelligence are important strategic assets that can be assembled, analysed, presented and used as management information to improve decision making. However effective utilisation requires leadership and cultural change.

Senior executives must provide leadership in this area if the value of an organisation's data as a strategic asset and the potential in BI are to be realised. The IT function needs backing from the top and the buy-in of business users to deliver successful BI projects. The finance and accounts function is well placed to work with the IT function to help win the buy-in of executives and business users. And BI could enable FDs to transform the finance and accounts function.

So far, most accountants' experience of BI has been limited to performance management applications. IT professionals, lacking expertise in the accounting area, have allowed accountants to acquire such systems tactically as accounting applications rather than as part of a company-wide BI strategy. Conversely, accountants lacking in BI expertise tend to limit the use of these tools to improving the efficiency of the reporting cycle processes in preparing budgets, consolidations, forecasts and reports. The result has been to reinforce the 'accountants on the sideline' analogy where the finance function ends up with its own financial information system while other disciplines in the business use the BI architecture provided by the IT function.

To overcome this problem, management accountants should engage with the IT function to consider the business case for a fully-integrated BI framework. BI may be able to provide a wider range of information in more accessible formats and enable more forward-looking analysis based on a combination of both financial and non-financial information. This may threaten some accountants' traditional roles but they would have key parts to play in project and change management, ensuring the right metrics are presented for performance and risk management and ensuring data quality.

Business leaders must be alert to opportunities

Moreover, where management accountants really add value is where they have the information and can run with it. If BI can provide the information more efficiently, many management accountants would be freed up to provide decision support. Business leaders must be alert to the potential that this opportunity could bring. Better information and better decision making is already giving some companies a competitive advantage. But a culture shift of this kind requires team spirit. It may be the management accountants who initiate the process but, ultimately, the stalemate will continue unless there is buy-in from the top. An England football team manager wouldn't leave a star striker on the bench just as prudent business leaders won't waste all their management accountants on the reporting cycle.

Charles Tilley is the chief executive of Chartered Institute of Management Accountants (CIMA) [1].