Emerging technologies like artificial intelligence (AI), machine learning, and advanced analytics are gaining traction among finance and accounting professionals to enhance business performance insights, according to a new global survey from the Deloitte Center for Controllership™ and IMA^® (Institute of Management Accountants). Even so, traditional cost accounting and profitability management methods continue to dominate the profession.

The survey report, titled "Unlocking profitability insights: How companies are leveraging data to enhance business performance," reveals that spreadsheets (30%) remain the most common performance modeling tool, significantly outpacing AI analytics (3%) and blockchain (1%). However, many professionals anticipate that emerging technologies will soon disrupt traditional cost accounting and profitability analysis practices by automating routine tasks and processes (19%), enabling real-time data analysis and reporting (18%), and shifting from historical to predictive analytics models (18%).

"Traditional business performance management methods are not as responsive or as precise as newer tools are at generating data and insights on drivers of cost, critical in today's fast-paced and dynamic operating environment," said Colleen Whitmore, a controllership partner, Deloitte & Touche LLP. "As such, many controllers and CFOs recognize that transformation in cost and profitability management approaches is needed to drive operating performance and better strategic decision-making."

Of the more than 440 finance and accounting managers, directors, controllers and CFOs surveyed, more than half (53%) reported they have already integrated (24%) or are planning to integrate (29%) emerging technologies such as AI, blockchain, or advanced data analytics into their organization's cost and profitability management models.

Adoption of cost-to-serve analytics tools face data hurdles

Respondents were specifically surveyed on their use of cost-to-serve analytics for quantifying the activities and related costs of delivering a product or service. Only 38% reported that their organizations are leveraging cost-to-serve analysis to evaluate business goals or modify strategies to increase profits.

Over half of respondents (54%) indicated that they either do not have reporting available or that their organization needs to improve the transparency of its cost and profitability reporting. When asked about the barriers to obtaining meaningful cost data, surveyed professionals cited complex and disparate systems (15%) as the primary reason, followed by data availability challenges due to interdependencies between functions, operating units and departments (14%).

"Data serves as the backbone of analytics tools, underscoring the importance of data hygiene for maximizing the technology's potential," said Rebecca Baker, Ph.D., director of product management at IMA and co-author of the report. "Cost modeling analytics, such as cost-to-serve, can be transformative for organizations aiming to enhance business performance and drive growth. However, these tools are only as effective as the data management strategies that support them."

Other reported benefits of utilizing emerging technologies like advanced analytics, AI and machine learning for costing and profitability management include reduced time spent on data collection (12%), increased efficiency in reporting and analysis preparation (11%), and improved accuracy of cost estimations (10%).

To read the full report, visit https://www2.deloitte.com/us/en/pages/financial-advisory/articles/financial-controllership-ima-report.html.