The study, titled “Digital Transformation Capability and Strategic Management Accounting Practices in Driving Organizational Performance,” analyzed responses from 150 managers, business owners, division heads, and senior employees. The findings show that technology adoption alone is not enough to maximize organizational performance. Organizations also need to transform digital data into strategic accounting information that can support decisions about costs, customers, competitors, pricing, forecasting, and performance.
The research is particularly relevant as organizations increasingly rely on digital systems while facing pressure to improve efficiency, innovation, service quality, and competitiveness.
Digital Transformation Is More Than Technology Adoption
Digital transformation has changed how organizations develop business models, manage operations, communicate with customers, and evaluate performance. However, successful transformation does not simply mean purchasing software, using cloud platforms, or automating business processes.
According to the study, digital transformation capability involves the ability to integrate digital technology, data, employees, organizational processes, leadership, and business strategy.
This capability allows organizations to respond more quickly to market changes and use information more effectively in decision-making.
The study also highlights the importance of strategic management accounting. Unlike conventional accounting, strategic management accounting uses financial and nonfinancial information to support longer-term business decisions.
Examples include strategic costing, competitor analysis, customer profitability analysis, benchmarking, strategic pricing, forecasting, and strategic performance measurement.
In this context, accounting is not limited to recording transactions. It becomes a strategic information system that helps managers understand where the organization stands and what actions should be taken next.
Study Involved 150 Managers and Senior Employees
Barlian and Jaya used a quantitative research design based on a cross-sectional survey. Data were collected from 150 respondents selected through purposive sampling.
The respondents included business owners, managers, division heads, and senior staff who understood their organizations' digital implementation, accounting information, and decision-making processes.
The organizations represented several sectors, including services, manufacturing, trade and distribution, finance, and other industries.
Managers formed the largest respondent group at 37.3 percent, followed by business owners at 28 percent. Meanwhile, medium-sized organizations represented the largest organizational-size category, accounting for 38 percent of the sample.
The researchers measured three main variables: digital transformation capability, strategic management accounting practices, and organizational performance.
Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) to determine both direct relationships and the mediating role of strategic management accounting.
Digital Transformation Strongly Influences Strategic Accounting
One of the strongest findings was the relationship between digital transformation capability and strategic management accounting practices.
The analysis produced a path coefficient of 0.642, with a t-value of 11.673 and a significance level below 0.001.
This means organizations with stronger digital transformation capabilities tended to implement strategic management accounting practices more extensively.
Digital systems can provide faster access to financial and nonfinancial information. Data analytics, integrated platforms, automation, and digital information systems can help managers analyze costs, customers, competitors, profitability, and market developments.
The study found that leadership commitment and digital governance received the highest average score among digital transformation indicators, at 4.080 out of 5.
Digital strategy alignment also scored relatively high at 4.040, while data utilization recorded 3.873.
These results suggest that digital transformation requires organizational leadership and strategic alignment, rather than technology investment alone.
Strategic Accounting Improves Organizational Performance
Strategic management accounting practices also had a significant positive relationship with organizational performance.
The path coefficient reached 0.472, with a t-value of 6.293 and a significance level below 0.001.
The finding indicates that strategic accounting information can help organizations make better decisions about cost control, pricing, resource allocation, customers, competitors, forecasting, and long-term planning.
Among the strategic management accounting indicators, forecasting recorded the highest mean score at 3.980, followed by strategic performance measurement at 3.973.
Benchmarking had the lowest mean at 3.687, suggesting that systematic comparisons with competitors or industry standards could still be strengthened.
For organizational performance, service quality and customer satisfaction were the highest-rated indicators, both scoring 4.113 out of 5.
Organizational adaptability also scored 4.020, while productivity reached 4.013. Profitability recorded the lowest score among the performance indicators at 3.887, although it remained above the midpoint of the measurement scale.
Digital Transformation Directly Improves Performance
The research also found that digital transformation capability directly improves organizational performance.
The direct path coefficient was 0.286, with a t-value of 3.865 and a significance level below 0.001.
This indicates that organizations with stronger digital capabilities can potentially improve efficiency, service quality, innovation, responsiveness, and adaptability.
However, the researchers noted that the direct effect was relatively smaller than the effect of digital transformation on strategic management accounting.
This distinction is important because it suggests that simply adopting digital technology does not automatically generate maximum organizational benefits.
Technology needs to be connected to managerial processes and strategic decision-making.
Strategic Accounting Mediates 51.4 Percent of the Effect
The most important finding concerns the mediating role of strategic management accounting.
The indirect effect of digital transformation capability on organizational performance through strategic management accounting reached 0.303, with a t-value of 5.611 and a significance level below 0.001.
The researchers calculated a variance accounted for (VAF) of 51.4 percent, indicating partial mediation.
In simple terms, more than half of the modeled effect of digital transformation capability on organizational performance was transmitted through strategic management accounting practices.
The total effect of digital transformation capability on organizational performance reached 0.589.
Because the direct relationship remained significant while the indirect relationship through strategic accounting was also significant, the researchers concluded that strategic management accounting provides a partial mediating mechanism.
This means digital transformation can improve performance directly, but its contribution becomes stronger when organizations use the information generated by digital systems for strategic accounting and managerial decisions.
Digital Data Need to Become Strategic Information
The findings provide an important message for business leaders: having digital data is not the same as knowing how to use it.
Digital systems can generate enormous amounts of information, but managers still need appropriate methods to interpret that information.
Strategic management accounting can bridge this gap by transforming operational and digital data into information that supports forecasting, pricing, cost management, competitor analysis, customer analysis, and performance evaluation.
The model developed by Barlian and Jaya explained 60.3 percent of the variation in organizational performance. Strategic management accounting practices were also explained by digital transformation capability with an R² value of 0.412.
The researchers therefore recommend that organizations align digital investments with accounting information systems, employee capabilities, data governance, and strategic decision-making processes.
Organizations should also strengthen the analytical role of management accountants and expand the use of competitor analysis, benchmarking, customer profitability analysis, and strategic performance measurement.
Implications for Organizations
The findings have practical implications for companies undergoing digital transformation.
First, organizations should avoid treating digital transformation as a purely technological project. Digital initiatives should be connected to organizational strategy and measurable performance outcomes.
Second, companies need employees who can combine digital competencies with accounting and analytical capabilities.
Third, management accounting should evolve beyond routine financial reporting. Management accountants can play a greater role as strategic business partners by analyzing digital data and providing insights for managerial decisions.
Finally, organizational performance should be evaluated using both financial and nonfinancial indicators, including profitability, revenue growth, productivity, service quality, customer satisfaction, innovation, and adaptability.
The research therefore presents digital transformation and strategic management accounting as complementary capabilities rather than separate organizational functions.
Profile of the Researchers
Noer Aisyah Barlian is affiliated with Syarifuddin Islamic University, Lumajang, Indonesia, and serves as the corresponding author of the study.
Ainul Indra Jaya is affiliated with Brawijaya University, Indonesia.
Their research focuses on the intersection of digital transformation, strategic management accounting, management accounting, and organizational performance.
Research Source
Article title: Digital Transformation Capability and Strategic Management Accounting Practices in Driving Organizational Performance
Authors: Noer Aisyah Barlian and Ainul Indra Jaya
Publication year: 2026
Journal: International Journal of Management and Business Intelligence (IJMBI)
ISSN-E: 3025-5589
Official journal: International Journal of Management and Business Intelligence (IJMBI)
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