GROUP 5

Dian Anjani 21801082181

Novia Rosy Pratiwi 21801082156
Nadian Azizi 21801082171

MANAGEMENT ACCOUNTING IN INDUSTRIAL REVOLUTION 4.0

The management accounting information system provides information needed to satisfy

specific management objectives. At the heart of a management accounting information system are
processes they are described by activities such as collecting, measuring, storing, analyzing, reporting, and
managing information. Information on economic events is processed into outputs that satisfy the system’s
objectives. Outputs may include special reports, product costs, customer costs, budgets, performance
reports, and even personal communication. The management accounting information system is not bound
by any formal criteria that define the nature of the processes, inputs, or outputs. The criteria are flexible
and based on management objectives. The management accounting system three broad objectives:
 To provide information for costing out services, products, and other objects of interest to
management.
 To provide information for planning, controlling, evaluation, and continuous improvement.
 To provide information for decision making.

According to CGMA (2018), the finance professionals will be judged on how well they work with,
and complement,robotic process automation (RPA) and algorithms. Further CGMA (2018) report says
that the finance professionals bring the context and human story to the abstract output generated by the
technology. As per R Kohavi& S Thomke (2017), the role of the finance professional, therefore, shifts
from one of knowledge collection and creation, to the interpretation of meaning and curating the
information outputs produced by the software solution. The management accountants can leverage
Industry 4.0 platform for exploiting the profit drivers. The profit drivers are: (1) Asset Management (2)
Cost Management (3) Leverage Management and (4) Tax Management. The following table provides the
role in specific terms.
The management accountants must take note of the following emerging trends in business so as to realise
the upside potential of Industry 4.0 wave:
 No more linear growth model
 Democratisation of information
 Platform based service offerings and not product based. Eg: Ola, Uber, Airbnb
 Move towards service and subscription model from sales model
 Technology being the main driver of change and occupying the center stage

The management accountants have to appreciate the role of Industry 4.0 and its implications across
the value chain and the way the business partners (customers, suppliers, bankers, insurance companies,
logistic and supply chain partners, investors, employees, policy makers, government, competitors etc)
exchange, partner and network each other. The management accountants will have to upskill and
continuously gain insight of technological disruptions, update, reinvent and renovate their technology
skills. Industry 4.0 digitally transforms the industry and the large organisations are leveraging on it.
MSMEs should follow suit for taking on competition from the large and established incumbents.

Course :

Industry 4.0: Overview, Practices And Role Of Management Accountants (CMA (Dr.) Batani
Raghavendra Rao Professor and Area Chair Finance CMS Business School Jain University
Bengaluru )