He opened the talk with a depiction of large enterprises in different global regions which have seen, over the past four decades, a growth in markups derived primarily through product cost containment exceeding price increases. This he explained was accompanied between 1980 to 2000 by the evolution of cost management innovations but continued after that period without novel accounting mechanisms. The rise in profits of large tech firms in particular coincides with extensive digitalisation taking place but without the same high level of operationalisation of financial management applications in generating high returns. Professor Bhimani noted that this is of concern if the evidence can be taken to point to a diminution of the use of accounting-based insights in guiding management enterprise activities.
The focus on historical financial information underpinning accounting systems has been of value to organisational growth in industrial firms but is diminishing in usefulness for decision making in fast digitalising environments. The lack of attention to both structured and unstructured data that permit firms to home in on transactions that to a degree forshow profitable activities negates the appeal of narrow accounting information in directing enterprise pursuits. Artificial Intelligence (AI) agents deployed by large tech firms now provide insights that exceed the value afforded to decision makers relying solely on conventional accounting indicators.
Professor Bhimani noted that we are entering novel spaces of intelligence never before available to organisations which will dictate the extent to which traditional financial information retains relevance.