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Article
Publication date: 13 March 2017

Anni Lindholm, Teemu Juhani Laine and Petri Suomala

The purpose of this paper is to identify the financial potential of new service businesses in the context of a global machinery manufacturer. The objective is to examine…

Abstract

Purpose

The purpose of this paper is to identify the financial potential of new service businesses in the context of a global machinery manufacturer. The objective is to examine the supportive role of management accounting (MA) and control in service business development, which has not been empirically examined previously.

Design/methodology/approach

The paper takes advantage of an interventionist case study at a global machinery manufacturer and is empirically based on a comprehensive examination of the service business potential in the selected product category in different market areas. The researchers were actively involved in the accounting development activities underlying this paper.

Findings

The results suggest that the development of a global service business is necessary to build on market area characteristics. An analysis should combine financial information and equipment fleet information across product lines and organizational units.

Research limitations/implications

MA and control practices tend to require significant development to actually support the process of identifying and capturing the service business potentials. As the findings are limited to one case environment, further studies should address the longitudinal evolution of MA and control, and the choice and utilization of different performance measures, in similar contexts.

Practical implications

The paper provides managerial insights on how to utilize MA information and proposes ideas for performance indicators.

Originality/value

The process examined in this paper responds to the need for tools and techniques supporting service business development. MA and control could provide a comprehensive understanding of the dynamics of service business profitability potential and support in identifying and prioritizing the possible avenues of realizing such potential.

Details

Journal of Service Theory and Practice, vol. 27 no. 2
Type: Research Article
ISSN: 2055-6225

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Article
Publication date: 29 May 2018

Natalia Saukkonen, Teemu Laine and Petri Suomala

To be utilized effectively in decision-making processes, management accounting (MA) information should fit the business context and at the same time reflect the roles…

Abstract

Purpose

To be utilized effectively in decision-making processes, management accounting (MA) information should fit the business context and at the same time reflect the roles, responsibilities and values of the actors taking part in the decision-making. This study aims to investigate the limitations for MA information utilization in decision-making. In particular, this study explores limitations stemming from the decision-making process structure and the involvement of several managerial actors.

Design/methodology/approach

An exploratory case study of an energy company and its customer company illustrates the current challenges in providing and integrating MA information into decision-making. The analysis is focused on the analytical and actor-based features of the decision-making and thus the limitations for MA information utilization. As a part of the broader research process, the researchers facilitated a meeting in the customer company, where the actors relevant to investment decisions discussed the current limitations in utilizing MA information.

Findings

Analytical and actor-based features may take different forms in the decision-making. Some relevant MA information may not be included in an organization’s decision-making process structure that allows merely conventional, yet analytical, decision alternatives. At the same time, certain actors’ viewpoints (such as sustainability metrics) can be excluded from the process without considering the logic behind the exclusion. This case study identifies the following limitations, largely related to insufficient actor-based features in the decision-making: managers may lack expertise in the use of MA tools, managerial interaction may lack reflection on taken-for-granted assumptions, different managers may appreciate different scope, content and timing of MA information and the process structure can ignore the required managerial viewpoints.

Research limitations/implications

This study demonstrates that both the decision-making process structure and the needs of the several actors involved may lead to limitations for MA information utilization. Although many limitations stemmed from the insufficient actor-based orientation in the case study, introducing new MA analyses and extending the validity of analytical approaches may also help overcome some of the limitations. Further research should address possibilities to integrate different actors’ viewpoints with MA information already in the decision-making process structure, find ways to introduce MA information on unconventional decision alternatives and enable reflection among and about relevant actors with respect to decision-making. These means could lead to more effective utilization of MA information for decision-making and, consequently, economically viable decisions.

Originality/value

This study addresses the limitations in MA information utilization by combining the viewpoints of analytical decision-making processes and reflective actors, and thus unveils possibilities for enhancing MA practice.

Details

Qualitative Research in Accounting & Management, vol. 15 no. 2
Type: Research Article
ISSN: 1176-6093

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Article
Publication date: 1 August 2016

Teemu Laine, Tuomas Korhonen, Petri Suomala and Asta Rantamaa

This paper aims to elaborate the concepts of boundary subjects and boundary objects in constructing and communicating relevant accounting facts for managing product…

Abstract

Purpose

This paper aims to elaborate the concepts of boundary subjects and boundary objects in constructing and communicating relevant accounting facts for managing product development (PD). Boundary subjects as reflective actors benefit effective accounting enactment, by building a shared understanding about different actors’ roles and information needs, and by helping to respond to these needs with new boundary objects.

Design/methodology/approach

The paper uses a longitudinal interventionist case study of a machinery manufacturer. The focus of this case study was the production ramp-up phase at the end of a PD program. Different actors’ needs were first collected and elaborated by interventionist researchers (boundary subjects). Then accounting prototypes (boundary objects) provided new means of communication.

Findings

The findings show that dealing with boundaries is crucial in accounting development. The role of boundary subjects was fundamental in the process of choosing, constructing, elaborating and communicating accounting facts. During this process, accounting prototypes integrated new accounting facts, the boundary subjects mitigated the boundaries and the boundary objects focused and restricted communication about accounting facts.

Research limitations/implications

The paper tests the pragmatic constructivism approach by examining accounting enactment under uncertainty and ambiguity. The study refines pragmatic constructivism in terms of boundaries, boundary subjects as actors and boundary objects.

Practical implications

The intentional use of boundary subjects and objects as communication platform could push a more active inclusion of business controllers as active business partners.

Originality/value

The paper contributes to the literature on accounting development by highlighting the use of boundary subjects and boundary objects as fundamental mechanisms in constructing and communicating accounting facts.

Details

Qualitative Research in Accounting & Management, vol. 13 no. 3
Type: Research Article
ISSN: 1176-6093

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Article
Publication date: 27 November 2017

Kati Stormi, Teemu Laine, Petri Suomala and Tapio Elomaa

The purpose of this paper is to examine how installed base information could help servitizing original equipment manufacturers (OEMs) forecast and support their industrial…

Abstract

Purpose

The purpose of this paper is to examine how installed base information could help servitizing original equipment manufacturers (OEMs) forecast and support their industrial service sales, and thus increase OEMs’ understanding regarding the dynamics of their customers lifetime values (CLVs).

Design/methodology/approach

This work constitutes a constructive research aiming to arrive at a practically relevant, yet scientific model. It involves a case study that employs statistical methods to analyze real-life quantitative data about sales and the global installed base.

Findings

The study introduces a forecasting model for industrial service sales, which considers the characteristics of the installed base and predicts the number of active customers and their yearly volume. The forecasting model performs well compared to other approaches (Croston’s method) suitable for similar data. However, reliable results require comprehensive, up-to-date information about the installed base.

Research limitations/implications

The study contributes to the servitization literature by introducing a new method for utilizing installed base information and, thus, a novel approach for improving business profitability.

Practical implications

OEMs can use the forecasting model to predict the demand for – and measure the performance of – their industrial services. To-the-point predictions can help OEMs organize field services and service production effectively and identify potential customers, thus managing their CLV accordingly. At the same time, the findings imply new requirements for managing the installed base information among the OEMs, to understand and realize the industrial service business potential. However, the results have their limitations concerning the design and use of the statistical model in comparison with alternative approaches.

Originality/value

The study presents a unique method for employing installed base information to manage the CLV and supplement the servitization literature.

Details

Journal of Service Management, vol. 29 no. 2
Type: Research Article
ISSN: 1757-5818

Keywords

Content available
Article
Publication date: 15 June 2018

Maria Major, Petri Suomala and Teemu Laine

Abstract

Details

Qualitative Research in Accounting & Management, vol. 15 no. 2
Type: Research Article
ISSN: 1176-6093

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Article
Publication date: 25 October 2019

Daniela Argento, Giuseppe Grossi, Aki Jääskeläinen, Stefania Servalli and Petri Suomala

The purpose of this paper is to explore the role of performance measurement systems as technologies of government in the operationalisation of smart city programmes. It…

Abstract

Purpose

The purpose of this paper is to explore the role of performance measurement systems as technologies of government in the operationalisation of smart city programmes. It answers the research question: how do the development and use of performance measurement systems support smart cities in the achievement of their goals?

Design/methodology/approach

This paper presents a longitudinal case study that uses an interventionist approach to investigate the possibilities and limitations of the use of performance measurement systems as technologies of government in a smart city. Interpretations are theoretically informed by the Foucauldian governmentality framework (Foucault, 2009) and by public sector performance measurement literature.

Findings

The findings address the benefits and criticalities confronting a smart city that introduces new performance measurement systems as a technology of government. Such technologies become problematic tools when the city network is characterised by a fragmentation of inter-departmental processes, and when forms of resistance emerge due to a lack of process owners, horizontal accountability and cooperation among involved parties.

Research limitations/implications

This paper is based on a case study of a single smart city, and outlines the need for both comparative and multidisciplinary analyses in order to analyse the causes and effects of smart city challenges.

Originality/value

This paper offers a critical understanding of the role of accounting in the smart city. The ineffectiveness of performance measurement systems is related to the multiple roles of such technologies of government, which may lead to a temporary paralysis in the achievement of smart city goals and programmes.

Details

Accounting, Auditing & Accountability Journal, vol. 33 no. 1
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 5 November 2020

Tuomas Korhonen, Erno Selos, Teemu Laine and Petri Suomala

The purpose of this paper is to better understand management accounting automation by exploring the programmability of management accounting work.

Abstract

Purpose

The purpose of this paper is to better understand management accounting automation by exploring the programmability of management accounting work.

Design/methodology/approach

We build upon the literature on digitalization in management accounting and draw upon the pragmatic constructivist methodology to understand how digitalization takes place at the individual actors' level in accounting practice. The paper uses a data set from an interventionist case study of a machinery manufacturer.

Findings

We examine an actual process of automating management accounting tasks. During this development process, surprisingly, calculation tasks remained more fit for humans than machines though, initially, they were thought to be programmable.

Research limitations/implications

According to our findings, practitioners may interpret experts' nonprogrammable work tasks as programmable and seek to automate them. Only identifying the factual possibilities for automating accounting-related work can lead to automation-improved efficiency. Our findings can be increasingly relevant for advanced analytics initiatives and applications within management accounting (e.g. robotic process automation, big data, machine learning and artificial intelligence).

Practical implications

Practitioners need to carefully analyze the entity they wish to automate and understand the factual possibilities of using and maintaining the planned automatic system throughout its life cycle.

Originality/value

The paper shows that when processes are assessed from a distance, the nonprogrammable management accounting tasks and expertise can become misinterpreted as programmable, and the goal of automating them has little chance of success. It also shows possibilities for human accountants to remain relevant in comparison to machines and paves the way for further studies on advanced decision technologies in management accounting.

Details

Accounting, Auditing & Accountability Journal, vol. 34 no. 2
Type: Research Article
ISSN: 0951-3574

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Book part
Publication date: 8 April 2005

Petri Suomala

The essential investments in new product development (NPD) made by industrial companies entail effective management of NPD activities. In this context, performance…

Abstract

The essential investments in new product development (NPD) made by industrial companies entail effective management of NPD activities. In this context, performance measurement is one of the means that can be employed in the pursuit of effectiveness.

Details

Managing Product Innovation
Type: Book
ISBN: 978-1-84950-311-2

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Article
Publication date: 24 September 2010

Teemu Laine, Jari Paranko and Petri Suomala

The purpose of this paper is twofold. First, it aims at defining the concept of the downstream shift in the context of the machinery manufacturers. The second aim of the…

Abstract

Purpose

The purpose of this paper is twofold. First, it aims at defining the concept of the downstream shift in the context of the machinery manufacturers. The second aim of the paper is to analyze the potentially enabling role of remote technologies in that shift.

Design/methodology/approach

Besides examining the development of the supply chains based on the literature and a case company, the paper refers to the case of the remote technologies developed and used by the case company for the years of 2003‐2008.

Findings

The key finding of this paper is that no consensus exists on the favourable scope and content of the downstream shift aimed at by the machinery manufacturers. Respectively, the potential role of the technologies in the shift can also vary on a case‐by‐case basis. Based on the case study, instead of new sources of service revenues, the information processed with the help of the remote technologies may provide an opportunity for the machinery manufacturer to learn from its customers, thus offering a sound basis for various R&D and sales and marketing activities.

Research limitations/implications

This paper can be considered as a pre‐study towards understanding about the true drivers of the downstream shift and their success factors. Technologies constitute one enabler in the shift, and its potential roles, together with the context specific factors, require further attention.

Practical implications

The paper offers valuable insights into the development of the supply chains. Moreover, it takes a critical perspective on the positive expectations connected with the downstream shifts by the machinery manufacturers.

Originality/value

The longitudinal perspective to the case environment provides a sound basis for analyzing the development of the supply chain at hand.

Details

Management Research Review, vol. 33 no. 10
Type: Research Article
ISSN: 2040-8269

Keywords

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Article
Publication date: 16 March 2012

Petri Suomala, Juho Kanniainen and Antti Lönnqvist

Comprehensive R&D project valuation calls for internal information on, for example, R&D investments as well as external information such as market projections that relate

Abstract

Purpose

Comprehensive R&D project valuation calls for internal information on, for example, R&D investments as well as external information such as market projections that relate to the expectations on product's life and revenue cash flows. Given the versatility of information needs, the valuation is generally expected to be challenging during R&D. The purpose of this paper is to analyze the perceived feasibility of R&D project valuation in real‐life organizations and discuss possibilities to increase the relevance of measurement for managing value creation.

Design/methodology/approach

The study is based on empirical data gathered by a questionnaire targeted at companies representing different industries in Finland. The data are analyzed in terms of company size, R&D intensity and the nature of the development activity (product or service).

Findings

The results describe how the managers responsible for R&D experience the importance and measurability of different elements potentially relevant for the success of a project. It was discovered that things that were considered important were generally perceived as challenging to apply in practice.

Practical implications

The paper lists several managerial activities for improving R&D evaluation practices. As a managerial contribution, the paper develops a framework for identifying different types of measurement elements.

Originality/value

Based on the empirical findings, a number of suggestions are made for improving the measurement of various elements of value. The paper elaborates the potential role of a number of indirect and less obvious aspects in association with R&D project value: the features of developed product's life cycle, created intellectual capital, emerging real options and windows of opportunity.

Details

Measuring Business Excellence, vol. 16 no. 1
Type: Research Article
ISSN: 1368-3047

Keywords

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