On the Path to Innovation: Analysis of Accounting Companies> Innovation Capabilities in Digital Technologies.
| Autor | Sordi Schiavi, Giovana |
1 Introduction
The central role of digital technologies in changing societies and the business environment has aroused managers' interest in dealing with innovation and the creation of digital products, services, and processes (Nylen & Holmstrom, 2015). According to the Accenture Digital Density Index survey, this growing trend towards the use of digital technologies in different products and services will add more than $ 1 trillion to global economic activity by 2020 (Accenture, 2015). With the rapid change of the business environment as digital technologies have been introduced, their integration into business processes has proven to be essential for contemporary organizations looking to address challenges and create opportunities for competitive advantage in a digital economy (Liu, Chen, & Chou, 2011; Tongur & Engwall, 2014).
In this regard, the MIT Sloan Management Review survey in conjunction with Deloitte found that nearly 90% of managers report experiencing the impact of digital technologies on their industries; however, less than half report doing enough to prepare for this digital revolution (Kane, Palmer, Phillips, Kiron, & Buckley, 2015). In this context, different business areas, especially the traditional ones, face one of the most challenging periods in the market (Guthrie & Parker, 2016), and the accounting sector is an example of a segment that has been disturbed due to the new digital technologies that are changing accounting activities (Pan & Seow, 2016). Fawcett (2015) points out that different digital technologies will significantly impact accounting services in the coming years, revealing their leading role in the process of changing the accounting market. This is because many routine accounting processes can be replaced by different digital technologies, which allow greater flexibility, agility, and security in daily actions (Bygren, 2016).
According to the Cokins and Angel (2017) report on the disruptive impact on accounting, routine tasks performed by accounting professionals such as data entry and bookkeeping are work processes that are increasingly vulnerable to digitization and automation. Digital technologies create opportunities to provide quality, high value-added solutions, rather than just reporting information after the fact has occurred and complying with legal obligations (Baron, 2016; Basova, 2017). Understanding the changes in the accounting market and their influences on business is fundamental to ensure the survival of companies operating in this area (Frey & Osborne, 2013). This forces accounting businesses to position themselves not only in relation to the introduction of new technologies, but also in relation to changes in services and products offered as well as to strategic business elements (Bygren, 2016).
Due to the arrival of digital technologies in accounting functions, the demand for skills related to the best use of these technologies has been growing among business and accounting professionals (Pan & Seow, 2016). Guthrie and Parker (2016) point out that accounting professionals will be challenged to go beyond the traditional skills used to perform mandatory and routine tasks, looking for new ways to create value for customers that ensure business sustainability through the exploration of new digital technologies. This is because these technologies allow the orchestration of new products, processes, services, platforms, and even new business models, enabling the digital innovation process (Nambisan, Lyytinen, Majchrzak, & Song, 2017). Given this current context, the development of innovation capability in accounting firms is critical, as it presses businesses in the area to pursue continuous innovation in response to the changing environment (Slater, Hult, & Olson, 2010), with digital technologies being the key major drivers of these environmental transformations.
Along these lines, the ability to innovate enables businesses to unite technological efforts with improved firm performance and can be seen as a global ability to absorb, adapt, and transform particular technology into specific managerial, operations, and transaction routines, which drives innovation and competitive advantage (Zawislak, Alves, Tello-Gamarra, Barbieux, & Reichert, 2012). In light of this, this article presents the following research question: How is capability for innovation exploited by companies from different accounting sectors, using digital technologies? Thus, the objective is to examine the innovation capability of accounting firms in the Brazilian market that use digital technologies focusing on technology development, operations, managerial, and transaction capabilities. These capabilities are verified in the framework of Zawislak et al. (2012), which groups them into business and technology-driven capabilities. To do so, a multiple case study was conducted with six prominent companies operating in different areas of accounting. Interviews were conducted with the main managers of these companies and institutional documents were collected. Moreover, other external documents about the national and international context of accounting business innovation were collected to support the proposed analyses. Data were analyzed using the Nvivo 11 software, with content analysis using codes from the innovation capabilities framework.
Guthrie and Parker (2016) point out that it is necessary to pay attention to this emerging accounting scenario due to changes in the accounting business caused by the introduction of new technologies and digital innovations in the market. Thus, this research aims to present a better understanding of the innovation capabilities of accounting firms, which exploit digital technologies in their business, by analyzing leading companies in today's market. These analyses provide the field and managers with a more comprehensive overview of the accounting context, since they portray aspects of management and business innovation that are references in the current accounting market. Moreover, this research aims to contribute to the theory by presenting an empirical study on innovation capabilities in accounting firms, where the conservatism of the profession and the aversion to changes in business conduct are aspects that distance innovation from the accounting context (Chang, Hilary, Kang, & Zhang, 2013), an aspect also found in the literature on the subject.
2 Background
2.1 Innovation and Digital Transformation
Digital technologies are being incorporated into a wide range of products and services, and are present in individuals' social, personal, and work relationships (Nambisan, 2013). In this context, the way digital technologies are being employed in different products and services ends up influencing and changing business (Demirkan, Spohrer, & Welser, 2016). This is occurring as digital technology is increasingly being introduced and exploited in business to meet the different goals of organizations, leading to profound changes across entire industries (Nylen & Holmstrom, 2015).
Therefore, companies today face the challenge of innovation and digital transformation. While digital innovation is characterized by the creation of new products, services, and processes, among others, digital transformation combines the effects of various digital innovations, bringing new agents, structures, practices, values, and beliefs that change, threaten, replace, or complement existing rules within organizations and industries (Hiningsa, Gegenhuberb, & Greenwoodaa, 2018). As a result, digital technologies open up new business opportunities, but they also create competitive pressure (Abrell, Pihlajamaa, Kanto, Brocke, & Uebernickel, 2016), stimulating the digital innovation of products and services. Nylen and Holmstrom (2015) reveal that the potential of digital technologies to generate innovative products and services that enable managers to achieve a competitive advantage in the marketplace arouses their interest in addressing the challenges behind innovation and digital transformation.
To overcome these challenges, it is essential to develop strategies that seek new ways of integrating and using digital technologies in business (Hess, Matt, Wiesbock, & Benlian, 2016). therefore, companies need to create strategies and management forms for the changes that come with innovation and digital transformation (Nylen & Holmstrom, 2015). However, this is not a simple task for companies operating in the "pre-digital" economy that today need to adapt to the digital economy (Sebastian et al., 2017). It is observed that companies should not assume reactive behaviors only when new technologies are introduced, but also act on their strategic business elements, from operational to managerial, in order to contribute to the business innovation process. One way to organize the analysis of business models and innovations can be found in the Business Model Canvas tool. This model organizes strategy analysis by taking the following into account: the 'customer segment' served, the 'distribution channels' of products/services, the form of 'relationship' and communication of a company with its customers, the 'revenue generation' strategy, the description of the main 'resources, processes, and partners' in carrying out the company's activities, and a further description of the 'cost' structure required; so that in the end it is possible to indicate which 'value proposition' the company wants to deliver to its customers (Osterwalder & Pigneur, 2011).
In order to investigate how companies organize themselves to enter the digital economy, Sebastian et al. (2017) analyzed 25 firms that were introducing the process of innovation and digital transformation in their business. The authors identified that strategies aimed at providing digitized solutions and customer engagement enabled these companies to enter the process of innovation and digital business transformation. In addition, the authors...
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