*Article* **The Degree of Dissemination of the Idea of Sustainable Development in Polish Housing Cooperatives in the Light of Empirical Research**

**Aneta Brzeska 1,\* and Sławomir J ˛edrzejewski <sup>2</sup>**


**Abstract:** The cooperative movement was, in a way, the forerunner of the concept of corporate social responsibility (CSR), which is due to the fact that they operate on the basis of cooperative values such as democracy, equality, solidarity, membership and social responsibility, concern for the local community. An integral part of the implementation of corporate social responsibility is the publication of sustainability reports which are currently not published by Polish housing cooperatives. The aim of this article has been defined as the identification and assessment of the idea of sustainable development implemented on the basis of General Standard Disclosures and Specific Standard Disclosures indicators presented in the reporting of housing cooperatives compliant with the Global Reporting Initiative (GRI) G4 Guidelines on Sustainability Reporting. The research used the method of literature analysis and the method of observation, as well as a comparative analysis of the information disclosures presented by the housing cooperatives studied. The obtained research results confirmed the cognitive value of non-financial reports and disclosures of information on websites in the assessment of the implementation of the sustainable development strategy. The findings have signaled the need to disseminate the idea of CSR reports among housing cooperatives and to make their preparation mandatory.

**Keywords:** sustainable finance management; housing cooperative; sustainability reporting; theory of sustainable value

#### **1. Introduction**

The literature analysis carried out by the authors indicates a gap in the area of reporting on the sustainable development of housing cooperatives. By combining the stakeholder theory, the social contract theory, the agency theory, the legitimacy theory, the contingency theory and the institutional theory, the aim of the article has been defined as the identification and assessment of implemented strategies of sustainable development on the basis of General Standard Disclosures and Specific Standard Disclosures indicators presented in the reporting of housing cooperatives compliant with the Global Reporting Initiative (GRI) G4 Guidelines on Sustainability Reporting.

In pursuit of this formulated aim of the article, current regulations and the results of previously conducted research concerning the international and domestic market were reviewed. This review shows, among others, that the introduced mandatory non-financial reporting, along with a set of instruments encompassing various standards, has created the conditions for conducting research in the field of information content of reports. Among the regulations in the area covering the subject of this publication, one should cite Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 on the disclosure of non-financial and diversity information by certain large undertakings and groups. Moreover, the growing interest in issues related to corporate social responsibility and its effects is confirmed by the extensive theoretical and empirical literature in this

**Citation:** Brzeska, A.; J ˛edrzejewski, S. The Degree of Dissemination of the Idea of Sustainable Development in Polish Housing Cooperatives in the Light of Empirical Research. *Sustainability* **2021**, *13*, 5481. https:// doi.org/10.3390/su13105481

Academic Editor: Grazia Napoli

Received: 22 March 2021 Accepted: 10 May 2021 Published: 13 May 2021

**Publisher's Note:** MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations.

**Copyright:** © 2021 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

field [1]. W. Skoczylas has carried out a detailed review of standards and their classification, conducting theoretical and empirical research [2], which indicates a gap to which particular attention should be paid: the need for research on the structure of disclosed non-financial information which forms the basis for the assessment of corporate social responsibility of organizations by interested parties.

Corporate social responsibility and sustainability reporting have already been extensively described in the literature devoted to the theoretical aspects of this issue and empirical findings. However, the considerations of researchers in this area do not apply to housing cooperatives but to other entities characterized by the nature of operations that are different from those of housing cooperatives. It should be noted that research on housing cooperatives in Poland and in the world is very rarely conducted, and researchers focus mostly on entities with other organizational and legal forms whose operation is profitoriented. Despite the scarcity of such studies, a few examples were found. These studies are important because of their reference to cooperatives, though they are not related to housing cooperatives, which are the subject of the research presented in this article. Those are therefore studies conducted on entities that are only similar in their characteristics to housing cooperatives.

The research conducted by A. Lema ´nska-Majdzik shows that one for-profit housing cooperative expressed "the need to adopt a culture of sustainable development in its activities" [3] in the context of the social dimension of stakeholders' expectations. Environmentfriendly activities were undertaken when they were translated into the economic aspect [3].

B. Mazur and K. Zimoch have identified the values communicated by Polish cooperatives on their websites and have made a critical analysis of whether the values are consistent with the values of sustainable development [4]. However, as in the previous case, the study concerned cooperatives whose activities are conducted on the assumption of making a profit.

A study has also been conducted on the corporate social responsibility of cooperatives in the Republic of Moldova. It indicates that Moldovan cooperative enterprises promote social awareness of CSR practices. The authors point out that the public should be informed about the social impact of cooperatives and be provided with an opportunity to comment on their activities, thus helping cooperatives to improve their CSR practices. The Internet and websites are mentioned as the research tool. Eleven benefits of corporate social responsibility of cooperatives, which may contribute to their competitive advantage, were also listed [5].

The study presented in this article contributes to the existing literature. It is one of the first studies to provide evidence in the context of disclosure of information on sustainable development in Polish housing cooperatives. The authors' intention is for this publication to introduce to the literature a discussion on sustainable development in the context of its social aspect and role played in the development of housing cooperatives, with particular emphasis on regulatory aspects and social needs. The article fills the gap in the discussion on CSR and the research gap in the field of theoretical knowledge supported by empirical research in relation to non-financial reporting of Polish housing cooperatives taking into account the concept of CSR. Due to the aim of the article, the following types of verification were conducted:


The results will be useful for the management of housing cooperatives implementing, or planning to implement, CSR reporting. This is due to the fact that, as noted by W. Skoczylas, the implementation of corporate social responsibility management is stimulated by potential benefits such as building a reputation, improving relations with important stakeholders, expanding the ability to acquire and retain clients (i.e., members in the case of housing cooperatives) and employees, value creation of the entity, as well as the development of organizational culture and information culture [2].

#### **2. Polish Housing Cooperatives and Their Environment in the Context of CSR**

The national housing cooperative movement has its own history and long tradition, as well as economic and social achievements. However, both in Poland and across the world, legal, economic and social conditions are constantly changing, which requires constant adaptation to these changes from housing cooperatives (as from other entities). The degree of this adaptation depends to a large extent on the needs of people creating, interested in, and regulating the activities of housing cooperatives and the conditions in which they operate.

Housing cooperatives, as independent economic units, are co-creators of a market economy system [6]. They are distinguished by their nature from other economic units as they constitute a combination of an association and an enterprise [7] (p. 7). This association, in the interest of its members, carries out joint economic activities [8]. Overall, in Poland, there are 14,615,100 dwellings with a total area of 1,084,166.50 m2. The share of Polish housing cooperatives in the Polish housing stock is 14%, representing 2,029,900 dwellings with a total area of 100,085.30 m<sup>2</sup> [9].

Housing cooperatives manage dwellings which are sometimes the fruit of lifetime of work of housing cooperative members. The Auditing Union of Housing Cooperatives of the Republic of Poland has stated that "currently the housing cooperative movement is the best organized, has the strongest economic potential, as well as the largest number of members. There are 3600 cooperatives in Poland with 4,200,000 members. It is a huge community associated on the basis of voluntary decisions, equality and self-governance" [10]. It can be concluded that the overt goal of the housing cooperative is to improve the living conditions of its members by increasing their safety and satisfaction, and the covert goal is to increase the profitability of assets through lower operating and management costs [11].

Due to the indicated number of members of housing cooperatives, their information needs ought to be identified. Other entities interested in the operation of housing cooperatives and their effectiveness should also be determined (Table 1).

Source: own elaboration based on References [12,13].

In view of the progressive development of management practice and theory, the forms of satisfying users' information needs are also evolving. After identifying and grouping the needs, it can be seen that, in practice, a particular type of information corresponds to a specific group of recipients with specific information needs (Table 1). The recognition of their needs based on dialogue as well as respect and care for the common comfort of life is a test of corporate social responsibility of the housing cooperative and, at the same time, a pillar of its sustainable development. At this point, one can quote the definition proposed by J. Michalak stating that: "sustainable development means meeting the needs of the present generation without depriving future generations of their ability to satisfy their own needs. Sustainability reporting is about measuring as well as disclosing information and being accountable to internal and external stakeholders for sustainable performance. Sustainability reports are designed to compare an organization's social and environmental performance over time and to other organizations" [14].

Taking into account the above-mentioned definition in the context of housing, its sustainable development should meet the housing needs of the current generation without depriving future generations of the possibility of living in the housing cooperative stock. The goals of GRI sustainability reports take into account the stakeholders: "the reporting organization shall identify its stakeholders and explain how it has responded to their reasonable expectations and interests. This presents challenges in balancing the specific interests/expectations of stakeholders who can reasonably be expected to use the report with broader expectations of accountability to all stakeholders" [15].

The voluntary preparation and presentation of sustainability reports by housing cooperatives can be explained on the basis of a number of theories, for example, the stakeholder theory, the social contract theory, the agency theory, the legitimacy theory, the contingency theory, or the institutional theory.


**Table 1.** Housing cooperative stakeholders and their information needs.

Referring to the stakeholder theory, it should be noted that the stakeholders depend on the housing cooperative and are influenced by its actions directly or indirectly, for example, as a result of agreements or contracts concluded. Each of the stakeholders is therefore interested in the housing cooperative's overall activities and their effects. In sustainability reports, housing cooperatives (similarly to businesses) should present environmental, social and economic sustainability impacts, thus taking into account various interest groups. It would allow housing cooperatives to avoid possible social opposition towards any actions taken (e.g., avoiding protests of environmental organizations when constructing new residential buildings, playgrounds, or sports facilities).

According to the social contract theory, society is perceived through the network of contacts among its various members. CSR activities are then analyzed in two dimensions: macro-contracts and micro-contracts. Macro-contracts define the relationships and expectations between society or local community and economic activity. Micro-contracts concern relationships between individuals [16].

The analysis of the behavior of members and management of a given entity shows that decisions made may be determined by the need to verify the activities of the housing cooperative, which is related to the issues of the agency theory [17] (According to the definition of M. C. Jensen and W. H. Meckling, it is "a contract under which one or more persons (the principal (s)) engage another person (the agent) to perform some service on their behalf which involves delegating some decision making authority to the agent"—see more [17]). It is therefore important to clarify the relationship between the principal (a member of the housing cooperative) and the agent (managing the housing cooperative) hired to manage the property of the principal. The agency theory indicates a situation in which the principal is not able to verify the correctness of the agent's actions, as this monitoring is costly and difficult to perform [18]. S. B. Graves and S. A. Waddock have found that agents (managers) are more inclined to take actions for sustainable development, as they participate to a lesser extent in the distribution of the company's profits in the long term. The authors emphasize that these actions may positively influence the evaluation of agents' work as this way managers will not be accused of acting to the detriment of society [19]. Similarly, a president who takes into account the sustainable development of the housing cooperative in management decisions is also more likely to maintain his/her position. The housing cooperative president can use sustainability reporting to improve his/her reputation and increase public recognition. Housing cooperative members can also benefit greatly from these reports. However, due to the costs of preparing a sustainability report, which increase the entity's operating costs, this group of stakeholders may be less inclined to develop this form of reporting, even if it translates into a better perception of the entity by its environment.

The considerations contained in this publication are also embedded in the contingency theory (already present in organizational studies in the 1960s [20]) due to the fact that information cycles are analyzed as an effect of specific external and internal determinants of the housing cooperative's operation. For this reason, in the further part of the article, an attribute of this theory will be used allowing for the application of a universal description and the explanation of phenomena specific to housing cooperatives [21] (p. 324). Due to the fact that the subordination of housing cooperative activities to legitimacy, social norms and legal regulations and the adaptation of results of its activities, in the form of sustainability reports, to the information needs of internal and external stakeholders are associated with the legitimacy theory, this theory is used to explain why housing cooperatives (or companies) decide to voluntarily submit sustainability information.

The research conducted for the purposes of this publication is also based on the institutional theory (used interchangeably with the stakeholder theory and the legitimacy theory) serving to explain motivations for sustainable development, combining the practice of housing cooperatives with the norms of society in which they operate. Voluntary disclosure by housing cooperatives of information on sustainability is perceived as part of an institutional practice aimed at maintaining, acquiring, or regaining their legitimacy. Housing cooperatives adopt institutional practices through isomorphic processes such as coercion, imitation, and normative pressures. The need to address concerns about threats to organizational legitimacy plays to a large extent the role of a potential driving force for disclosure of information on sustainable development [22]. This means that housing cooperatives are appropriate entities to implement the principles of sustainable development with the involvement of residents [23]. It should be emphasized that housing cooperatives, due to the specificity of their activities, take into account the requirements of sustainable development and act to promote it. The concept of cooperatives is therefore inherently related to the goals and tasks of sustainable development. These goals (Sustainable Development Goals–SDG) emphasize the corporate social responsibility of housing cooperatives. The 11th goal of the resolution adopted by the United Nations General Assembly on 25 September 2015 "Transforming Our World: the Agenda 2030 for Sustainable Development" sets out to "make cities and human settlements inclusive, safe, resilient and sustainable" comprising tasks related to the operation of housing cooperative:


It is a worldwide outlook of the problem which shows how important the issue of housing is in the 2030 time horizon from the national, EU and global perspective.

The use of CSR as a method of managing a housing cooperative means that the housing cooperative becomes an active organization, responding to changes in its socio-economic and cultural environment. The housing cooperative builds a stable position on the basis of long-term activities focused on broadly understood development through establishing a network of social relations with its environment. These are premises for perceiving this form of organization as active and acquiring knowledge through experience.

There is an increase in social awareness of housing cooperative members, who are becoming more demanding, and are driven by trust in the housing cooperative and its image. Therefore, the sustainable development of housing cooperatives can increase the loyalty of their members and suppliers/stakeholders. Pro-environmental and pro-social activities of these cooperative organizations may contribute to gaining the favor and a greater level of trust of local government authorities and the local community. The indicated activity is part of the non-financial motivation of housing cooperative employees, who may start to improve the perception of their employer based on the code of ethics implemented or involvement in matters important to people. This way, housing cooperatives can improve their labor market image.

One can agree with the position of R. Konieczna that sustainable development is an obligation [25] (p. 29) which the housing cooperative voluntarily accepts and then includes in its management system, as CSR is increasingly desired and required by stakeholders (primarily its members).

#### **3. Materials and Methods**

The empirical study of the prevalence of sustainability reports was conducted in the period from December 2019 to December 2020 using the observation method. Observation as a research method should be carried out intentionally and in a planned manner so that it does not affect the process, phenomenon, or object under observation. This method assumes the selection of observations according to predetermined conditions, which are subject to appropriate selection. The selection criterion is determined based on the purpose of the study. The observation method as a research method takes into account all stages of research activities, which means that it allows us, among others, to set objectives, collect specific data, verify and select research material. It also provides the conditions for conducting the preliminary study and the main study. This method also specifies how research techniques or tools may be prepared and used. The observations that are the basis for the analysis of the results of the research are recorded in protocols (or questionnaires), which makes it possible to make scientific generalizations [26] (pp. 62–63). The study presented was carried out in accordance with the research methodology shown in Figure 1.

**Figure 1.** Research methodology.

The first stage in the implementation of the undertaken research task was the identification of the research gap as well as the formulation of the objective of the study and the preparation of the research plan. The analysis of the theoretical assumptions of the CSR concept and the instruments for its implementation postulated in the literature, set the research directions for the conducted study. In pursuit of thus formulated purpose of the study, the research questionnaire was prepared, in terms of content, in line with the standards of sustainability reporting, specifically with the Global Reporting Initiative G4 Guidelines on Sustainability Reporting (Table A1). The research questionnaire is presented in more detail in Appendix A. This means that the issues of sustainable reporting discussed in the article and the conducted study refer to standards developed by the Global Reporting Initiative, which are the most advanced and most widely used standards in business practice. The GRI G4 standards contain internationally agreed indicators and measures presenting the most important issues related to the sustainable development of a given organization. Therefore, the indicators and information disclosures provided by the reporting entities divided into the following groups formed the basis for the assessment:


The assessment was made on the basis of a comparative analysis of the structure indicators reported by the Polish housing cooperatives surveyed and the structure indicators of the GRI 4 standards, including the intensity indicator (which is the ratio of the indicators

reported by housing cooperatives to the possible scope of reporting defined by the GRI standards [2]).

The empirical study of the prevalence of sustainability reports included 100 housing cooperatives operating in Poland. The collection of non-financial data was done manually and several sources were used to compile the dataset. In the first stage, the search mechanism on the website of the National Court Register was employed to find 100 housing cooperatives. For this purpose, the "cooperative" keyword was entered in the search field of the website. The website search mechanism found many cooperatives, and on the basis of the list received, the first 100 housing cooperatives were selected for the research sample. Then, non-financial reports for the selected housing cooperatives for 2018 were collected. In addition, the existence of disclosures in sustainability development reports, coded in line with the GRI G4 indicators, was checked and identified to measure the amount and variety of certain types of information. Relevant indicators recognized by the reporting entities, resulting from their strategy, were divided into two groups: the General Standard Disclosures and the Specific Standard Disclosures, formed the basis for the assessment of each housing cooperative conducted in the study.

Subsequently, the content of websites and other communication tools of the housing cooperatives studied was analyzed in order to search for declarations whether the ideas of sustainable development were important for the management.

For the above-presented research stages, a binary measure was used to record voluntary disclosure of information on sustainable development in the research questionnaire. If a given housing cooperative provided information on the issues analyzed in the form of non-financial reports or website disclosures, that fact was coded as "1".

In the final stage, the structure of information disclosures and sustainability declarations was observed and analyzed. The results were compiled using the percentage share and the intensity index was calculated.

Data sources were limited to non-financial reports, websites and annual reports of the housing cooperatives studied.

#### **4. Results**

As a result of the above-presented research, it was possible to analyze the information available on the relevant websites and in annual reports posted on the website of the National Court Register ICT system. According to the GRI G4 standards, first, one learns about a given organization, including: the importance of sustainable development for the organization and the actions taken to implement it, the characteristics and scale of the organization, organizational governance, and ethics. The General Standard Disclosures indicators, comprising the first group of indicators, make it possible to refer to the report as a source of information in which a given organization describes the process leading to the achievement of the goal of defining the content of the report, identifying material aspects and their boundaries, compiling data, indicating stakeholder engagement (not only for the purpose of reporting) and report profile [2].

The structure of the GRI G4 standards allows one to first familiarize oneself with the first group of indicators describing a given housing cooperative—the General Standard Disclosures indicators. The Specific Standard Disclosures indicators, on the other hand, are an important source of information when assessing the implementation of the sustainable development strategy, as they reflect the impact of housing cooperatives on the environment and society, significantly influencing the assessment and decision of both internal and external stakeholders.

Analyzing the two groups of indicators makes it possible to familiarize oneself with their structure. As indicated by the research results presented in Table 2, the assessed content of reports of the housing cooperatives studied differs significantly from that resulting from the GRI G4 standards (i.e., the reported content constitutes only 37% of the scope covered by the GRI G4 standards).


**Table 2.** General Standard Disclosures and Specific Standard Disclosures.

<sup>1</sup> The ratio of reported content in relation to the standard scope after [2].

Based on the General Standard Disclosures listed in Table 3, it can be seen that housing cooperatives do not declare the implementation of sustainable development strategy, but they present their report profile or organizational profile and organizational governance.

**Table 3.** List of General Standard Disclosures.


In the dialogue with the internal and external environment, the name of the organization, its basic services, headquarters, location, and legal form, as well as the scale of the organization, the number of employees broken down by type of employment and gender, its reporting periods, the structure of its management bodies, along with changes in those areas were widely reported. The key issues and matters raised by stakeholders in the reporting period were presented to a slightly lesser extent (67%). In 53% of the housing cooperatives considered, the undertaken economic, environmental or social initiatives and norms of behavior were listed in the form of rules of conduct.

The list of selected Specific Standard Disclosures presented in Table 4, specific to the sector of housing cooperatives (but not obligatory), made it possible to present the structure of information published by the housing cooperatives analyzed against the GRI G4 benchmark in the context of material aspects, reflecting the significant impact of cooperatives on the economy, natural environment and society, or significantly influencing stakeholder assessments and decisions.


**Table 4.** List of selected Specific Standard Disclosures.

The results indicate that the scope of information enabling the assessment of actions taken to implement the declared strategy compared to the scope agreed in the standards covers approximately 25.1% of possible aspects, that is, 51.3% of the aspects of the indicators from the economic category, 34.7% of the aspects of the indicators from the environmental category, and 17.8% of the aspects of the indicators from the social category.

The share of the amount of information classified according to the GRI G4 Specific Standard Disclosures in the economic category is presented in Table 5. The list shows that almost half of the housing cooperatives studied presented economic performance (47.8%) in the economic category, while a minority indicated indirect economic impacts (12.7%) or market presence (18.5%).


**Table 5.** List of selected indicators according to the aspects of the economic category.

The activities of housing cooperatives should also be aimed at environmental protection. Most often they relate to energy and water consumption as well as the costs of sewage disposal and waste management (see Table 6), that is, a list of selected indicators from the environmental category relevant to the activities of housing cooperatives. Housing cooperatives most often show the costs incurred in the indicated aspects broken down by real estate properties, by comparing their amount to the previous year, additionally pointing to possible reasons for their changes.

Only in a few cases do housing cooperatives share information on the effectiveness of actions taken, for example, in terms of reducing greenhouse gas emissions. However, no environmental assessment of the impact of deliveries or employee transport on the environment was reported. Therefore, it can be assumed that such activities are not included in their sustainable development strategy.

By listing the indicators according to the aspects of the social category, the structure of indicators the most widely presented by the housing cooperatives studied was obtained, as shown in Table 7.


**Table 6.** List of selected indicators according to the aspects of the environmental category.

**Table 7.** List of selected indicators according to the aspects of the social category.



**Table 7.** *Cont*.

The presented structure (Table 7) indicates that the greatest importance (44.9%) in the implementation of the sustainable development strategy is attributed to activities included in the sub-category of product responsibility (which in the case of housing cooperatives is real estate). Particular attention is paid to the health and safety of housing cooperative members, compliance with regulations, and ensuring the privacy of housing cooperative members. The second most important are activities related to society (29.2%), especially in the field of local communities, rules concerning participation in public life, or compliance with regulations. Less importance is attached to labor practices and decent work, where employment is primarily reported. The subcategory related to respecting human rights, where mainly practices related to employee occupational health and safety were reported, is the most ignored area.

The conducted research indicates that, among the additional activities within the framework of the sustainable development concept and corporate social responsibility mentioned by the housing cooperatives considered, both in their non-financial reports and on their websites, the following should be particularly noted:


In one of the housing cooperatives considered, among the reports posted on the website, there was a presentation on the idea of sustainable development encompassing the following three spheres:


Concluding the results of the conducted study, it can be stated that the scope of the presented indicators allows stakeholders to familiarize themselves with the profile of housing cooperatives. However, the Specific Standard Disclosures, indicating a direct and indirect impact of the activity on society and the natural environment, were reported rather narrowly in relation to the scope defined by the GRI G4 Guidelines. Nevertheless, it should be taken into account that these are "largely lagged, not leading indicators. The cognitive value of the latter is expressed in the fact that they reflect the achievement of the goal, the actions taken to achieve them, or the level of meeting the expectations of stakeholders" [28]. In the reports and on the websites, information is presented without following any uniform standard or guidelines adjusting the specific nature of housing cooperatives to CSR reporting. None of the housing cooperatives from the selected sample prepared sustainability reports in accordance with the GRI G4 Guidelines. The lack of actions taken in the field of CSR reporting among housing cooperatives (which in fact undertake this type of activities-as indicated in this article) is puzzling. After all, housing cooperatives have to fulfil the principles of sustainable development, for example, by meeting the needs of future generations.

#### **5. Discussion**

It should be noted that the presented research results indicate the realized sustainable development of housing cooperatives both in the social and environmental dimension. Housing cooperatives publish on their websites various non-financial reports and information related to environmental and social issues.

As a result of the study, it can be said that the concept of sustainable development in Polish housing cooperatives is still at its initial stage, treated as a synonym for sponsorship or charity, or implemented only in the form of occasional pro-social or environmental activities aimed at creating a certain image. Most housing cooperatives do not use this concept as an overall management strategy, which makes it very difficult to assess their activities in this area.

The theoretical issues and empirical research discussed in the article allowed for the identification of areas of sustainable development of housing cooperatives and basic information about it, which is of key importance for the assessment of its level. Based on the analysis of selected Polish housing cooperatives, it has been possible to determine what information about this specific type of entity and its activities is necessary to verify the level of its sustainable development.

Housing cooperatives should initiate a dialogue with stakeholders by preparing non-financial reports in accordance with the GRI G4 requirements in order to assume responsibility for employees and contractors in the supply chain and to monitor the impact of cooperatives on the natural environment.

The research results obtained have confirmed the cognitive value of non-financial reports and disclosures of information on websites when assessing the implementation of the sustainable development strategy. At the same time, the findings have pointed to the existing gap, as the content of these reports needs improvement, including the wider publication of Specific Standard Disclosures.

One can agree with the statement of E.I Szczepankiewicz and P. Mu´cko that the differences in the scope and form of presentation of financial and non-financial information make it difficult for stakeholders to compare the situation and quality of management of the entities analyzed or assess their prospective performance [29].

The research results provide decision-makers with theoretical and practical implications to encourage housing cooperatives in Poland and around the world to take actions aimed at sustainable development and disclosure of corporate social responsibility information.

General conclusions regarding the analysis of Polish housing cooperatives can be formulated as follows:


3. Initiatives to promote awareness of CSR among these entities should be introduced so that the successful popularization of sustainable development in this sector could be achieved quickly and CSR reporting could be implemented.

One can see a number of benefits from the implementation of the CSR reporting strategy in this area by housing cooperatives (not only in Poland but also worldwide). The introduction of CSR principles into housing cooperatives may lead to increased interest on the part of future members/potential investors, as they might be more willing to grant a loan or invest as a new member in purchasing a dwelling in a socially responsible and credible housing cooperative.

There are other benefits that housing cooperatives can achieve after implementing CSR principles:


Housing cooperatives have at their disposal a growing set of various tools that facilitate the process of implementing CSR principles. The completion of the process of implementing these principles successfully depends on many situational factors, that is, economic, institutional, cultural, and social. The management board and the entire housing cooperative must be involved. The contemporary socially responsible model of housing cooperative management is not only about meeting formal requirements and legal obligations but about incorporating the idea of CSR into the management process in conjunction with the financial and investment policy of the housing cooperative.

It should be stressed that there are limitations to this study, firstly because of the size of the sample which consists of 100 housing cooperatives. The research was also limited territorially to housing cooperatives located in Poland. It should be also borne in mind that, in comparison to financial statements, the non-financial reports audited, for example, activity reports, have a lower level of credibility resulting from subjectivity and difficulties in verifying certain information. The published subjective opinions or interpretations of the

management constitute an important and valuable part of the report. It should be noted, however, that a certain degree of subjectivity of the housing cooperative management influences the content of the report which after all aims to objectively present the image of a given entity. This makes comparisons difficult, as the choice of aspects and indicators remains in the sphere of individual motivations and decisions of housing cooperatives.

The conclusions drawn from the conducted empirical research suggest the need for further studies in this area and their diffusion into economic practice. The equally low percentage of Polish housing cooperatives promoting the idea of sustainable development in their non-financial reports indicates the need to promote these principles in the housing cooperative community. After all, as a sustainable and participatory organizational form, housing cooperatives should present an alternative business model for social organizations [30].

The presented study will contribute to expanding knowledge on the relationship between sustainable development and its impact on the housing cooperative sector. There is, however, a need for further more extended research on the issue conducted on a larger research sample, involving a comparative analysis of subsequent financial years. Future in-depth studies carried out in other countries may provide results that can be compared with this study.

As emphasized by R. Konieczna, "a properly prepared social report should enable the interested party to form an opinion on the overall picture of the activities" [25] (p. 41) of housing cooperatives and their effects. The authors have put forward the idea that housing cooperatives should prepare mandatory non-financial information (CSR) statements and reports that could be called corporate social responsibility reports of housing cooperatives.

Should CSR reporting therefore be mandatory for housing cooperatives in the future? Do housing cooperatives only undertake some activities in order to make their image more environment friendly? Will sustainability reports serve as public relations materials used to create the image of a given housing cooperative in the eyes of social groups instead of being an actual presentation of its environmental impact and achievements in this area? B. Mazur and K. Zimnoch indicate that the activities of housing cooperatives "fit perfectly into the concept of sustainable development, proving that the implementation of this concept does not always require revolutionary changes in the business world" [4]. Therefore, the authors ask why this type of entity, built on the values of sustainable development, has not been obligated yet to prepare CSR reports, as such reports cannot be found on websites or in non-financial reports prepared by the indicated entities (as it has been confirmed in this study). A discussion of this subject ought to be initiated and the idea should be put forward to incorporate in the common practice of housing cooperatives non-financial reports that should be prepared in accordance with the aforementioned Directive 2014/95/EU of the European Parliament and of the Council on disclosure of non-financial information and diversity policy of 22 October 2014 for such activities to become a new trend in the housing cooperative sector. The authors postulate the promotion of sustainable development, yet the future will show whether the principles of sustainable development will become an integral part of the activities of housing cooperatives, or whether the sustainable development "fad" will fade.

**Author Contributions:** Conceptualization, A.B. and S.J.; Data curation, A.B. and S.J.; Formal analysis, A.B. and S.J.; Funding acquisition, S.J.; Investigation, A.B. and S.J.; Methodology, A.B. and S.J.; Project administration, A.B.; Resources, A.B. and S.J.; Validation, A.B. and S.J.; Writing—original draft, A.B. and S.J.; Writing—review & editing, A.B. and S.J. All authors have read and agreed to the published version of the manuscript.

**Funding:** This research received no external funding.

**Institutional Review Board Statement:** Not applicable.

**Informed Consent Statement:** Not applicable.

**Data Availability Statement:** The data presented in this study are available on request from the corresponding author.

**Acknowledgments:** We wish to thank the Reviewers and the Academic Editor for valuable comments that have contributed to the further improvement of the article.

**Conflicts of Interest:** The authors declare no conflict of interest.

#### **Appendix A**

**Table A1.** Research questionnaire.


#### **Table A1.** *Cont*.


**Table A1.** *Cont*.


#### **References**


## *Article* **Toward Cognitive Management Accounting**

#### **Olga Pilipczuk**

Faculty of Economics, Finance and Management, University of Szczecin, 71-004 Szczecin, Poland; olga.pilipczuk@usz.edu.pl

Received: 6 May 2020; Accepted: 17 June 2020; Published: 23 June 2020

**Abstract:** This paper examines the impact of cognitive technologies in management accounting. The purpose of the research was to create the current management accountant skills model. The main contributions of this paper are the literature study of the future of management accounting, the study of the impact of cognitive technologies on management accounting, the labor market research, and the current management accountant skills model. The purpose of the literature study was to highlight the opportunities and challenges of the application of cognitive technologies to management accounting and the role of cognitive abilities in the management accountant profession. The labor market study was conducted in order to analyze the impact of cognitive technologies on the management accountant profession and identify the core skills required. The paper fulfills the research gap regarding the impact of cognitive information technologies on management accounting and the management accountant profession in terms of smart and sustainable organization conception. The number of job positions with cognitive analytic skills, big data skills, cognitive abilities, and additional skills and competencies was identified. Although the research reveals differences in the demand for skills and abilities among the studied countries, the common skills model for managerial accountants was successfully created.

**Keywords:** cognitive computing; managerial accounting; management; big data; skills model; labor market

#### **1. Introduction**

Currently, accounting business processes are undergoing a transformation through digitalization and sustainability.

The sustainability of an enterprise is largely determined by the level of innovation potential, especially in the process of development of smart sustainable cities. Nowadays, the convergence of two conceptions, the smart city and the sustainable city, generate the data-driven smart sustainable city. The smart sustainable city consists of smart sustainable organizations, which are based on smart sustainable processes supported by cognitive and big data technologies. These organizations need to find sustainable solutions to deal with the complexity of financial and accounting data. Advances in Internet technologies have made it possible to gather, store, and process large amounts of interactive enterprise data [1]. When creating smart sustainable cities, big data and cognitive technologies generate useful information and insights for citizens, enterprises, and policymakers. The new digital technologies link big data and cognitive analytics with operational sustainability practices for sustainable business management. Transforming large amounts of data into knowledge allows them to empower cognition as well as support decision-making routines [1]. According to the IBM company, "the opportunities that cognitive Internet of Things solutions can deliver in the sustainability space are enormous, and early adopters are gaining a competitive advantage. As sustainability moves into the mainstream on Wall Street, organizations that are able to harness the power of cognitive technologies to advance their goals while helping the planet will lead the way" [2].

The background analysis indicates that accounting for sustainability entails the reporting of ecological and social information and the integrated reporting of sustainability information along with financial reporting. Moreover, the emerging technologies should provide users with sustainability reports, auditing, and the assurance of sustainability information, sustainability implications of financial failure, accounting, and auditing failures.

For years, scientists have emphasized the role of cognitive abilities in behavioral accounting, judgments, and decision making [3–10]. Individuals with good cognitive abilities are better equipped to acquire the knowledge needed to perform their jobs at the highest levels [11].

In recent years, the impact of cognitive abilities on different professions in the finance and accounting sphere has increased. On the other hand, some people are unwilling to recognize the importance of increasing the level of cognitive abilities for a better use of information technologies. The number of works in which scientists attempt to analyze the impact of cognitive skills and cognitive technologies is also constantly increasing.

For years, various definitions of cognitive abilities have been proposed, from the more common to the more concrete. For example, Carroll's definition states that "cognitive ability can be defined as variation across individuals in the successful performance of tasks primarily involving processing of mental information" [12]. According to one of the most recent definitions, "cognitive abilities are aspects of mental functioning, such as memorizing and remembering; inhibiting and focusing attention; the speed of information processing; and spatial and causal reasoning" [13].

In this paper, cognitive abilities are treated in more practical terms. They are the cognitive skills required by an employee to use cognitive technologies more efficiently and in order to increase the effectiveness of accounting processes, including the acceleration of decision-making processes.

Originally associated with artificial intelligence, the researchers began to use the term "cognitive computing" from the 1990s. Cognitive computing has attracted real attention since 2011.

Cognitive computing refers to the computer systems inspired by the human brain, which have natural language processing capability, learn from experience, interact with humans in a natural way, and help make decisions based on learning processes [3–16].

Cognitive computing can also help accountants with deep analytics. According to Deloitte, "cognitive analytics" is a term used to describe "how organizations apply analytics and cognitive computing technologies to help humans make smarter decisions" [17].

In 2017, John Baron, Managing Director of the professional segment of the Tax and Accounting Business in Thomson Reuters, argued that "very soon, cognitive computing will begin to impact the accountant profession. It can be used in risk mining, grouping and connecting entities, detecting abnormalities in structured and unstructured data, and improving the user experience" [18].

Moreover, in 2019 Forbes wrote that "the use of cognitive technologies already has changed the accounting profession. Automated solutions make the accountant's job easier, eliminating much of the manual processing of data. Such tools also provide transparency into digitized financial data to validate the quality and accuracy of ledgers, compressing the margin of error" [19].

In recent years, the convergence of Big Data and Artificial Intelligence (AI) in finance and the accounting area is gaining popularity. Cognitive Analytics relates to Big Data technologies. "With the advent of big data, which grows larger, faster and more diverse by the day, cognitive computing systems are now used to gain knowledge from data as experience and then generalize what they have learned in new situations" [20].

However, many accountants are wondering if Artificial Intelligence will be a job-killer in the accounting profession. Most firms believe cognitive computing will be a "job-creator, relieving accountants of time-consuming and mundane process work and freeing up space to work on more complex work" [21]. Scientists suggest that accounting is a business field that is "likely to be augmented by IT technology rather than fully automated" [22].

According to Jim Boomer, "it will serve as a complement to the evolution of accountants from technical advisors to strategic, value-added advisors", which does not mean that cognitive computing does not present any risks to the accountant profession [21]. The experts suggest that managers will need to transform and expand their practice toward more advisory services. The commonality between research on human cognitive processes and auditing is usually described with regard to two issues: judgment and risk [23]. The importance of using these capabilities, especially for managers and auditors, are confirmed by many scientists. Accountants should also consider the directions in which they can enhance their knowledge and skills to prepare for the big data challenge [23,24]. Financial and accounting managers, as the leaders and advisors, should maximize their big data analytics skills [25–27].

In the literature on sustainable development, there is still a gap in the impact of modern information technologies on management accounting, and on the achievement of sustainable development by enterprises. These technologies are predominantly cognitive and big data technologies. Moreover, there is no research into the desired skills and abilities of management accountants in practice. In order to analyze the impact of cognitive technologies on managerial accounting, a literature study has been conducted.

The main contributions of this paper are the literature study on the future of management accounting and on the impact of cognitive technologies on management accounting, the labor market research, and the current management accountant skills model.

Since two methodological approaches were chosen, namely a theoretical and a practical approach to the management accountant skills model creation, the literature study was focused on scientific papers and non-scientific literature sources, such as market reports and experts' opinions.

Most of the papers in this area are based on a qualitative approach, by analyzing the experts' opinions. In this paper, the quantitative approach of labor market analysis was selected to fulfill the research gap in the area of management accounting skills analysis; therefore, the results of the present study have meaningful practical implications.

The paper is structured as follows. First, a review of the literature is provided, outlining the issues raised by the research on the impact of cognitive technologies on management accounting and the management accountant profession in terms of sustainability. This is followed by a survey conducted on selected labor markets and the description of the results of that survey. The research aimed to create the current management accountant skills model, with an emphasis on modern Information Technologies (IT). Finally, conclusions and future perspectives are presented.

#### **2. Literature Review**

#### *2.1. The Future of Management Accounting*

There has been a substantial degree of research interest on the description of the current and future models of management accountant skills. However, the authors concentrate only on the general domain or traditional technologies, without taking into consideration the smart sustainable enterprises conception, supported by cognitive and big data technologies. Moreover, the conducted studies were based on the experts' opinion analysis. There is a lack of research based on labor market analysis.

The literature review was divided into three groups: papers describing the role of management accounting for sustainable business management, papers describing the changing role of information technologies for management accountants in commercial enterprises, and, finally, papers describing the role of cognitive and big data technologies in sustainable development.

Nowadays, many authors treat management accounting as part of a sustainable development strategy. Most of them initiate the discussion on the further development of management accounting establishing how current management accountants view their present and future role [28–36].

Already in 2004 [28] authors emphasized the extension of the role of management accountants to team leadership, leadership in using statistical/analytical techniques, the design and management of information systems, and the design and control of performance measurement systems.

In paper [32], a bibliometric analysis based on the scientific papers in the Web of Science database concerning management accounting research in Central and Eastern European countries in 1945–2017 was done. It reveals key trends in changes in the field of management accounting research. The results undergo many political, structural, social, and economic changes, with growing public awareness of the need for corporate sustainability among them.

The paper by Maas and others addresses the question of how companies can and do integrate sustainability assessment, management accounting, management control, and reporting [33].

In 2018, in the book "The Role of the Management Accountant: Local Variations and Global Influences" [35], the future of management accountants in different countries was presented: the United States, United Kingdom, South Africa, Japan, India, France, Canada. The role of IT in management accounting was also described. Most of authors emphasize the increasing role of information technologies in the studied countries. They highlight the importance of interpersonal and technical skills development. They also discuss sustainability as a fundamental challenge for management accountants. The authors state that management accountants are challenged to redefine and develop their role as the coordinators of processes for the management of sustainability information. The skills need to be developed to address sustainability issues. Therefore, educational and training programs should be changed.

In his paper, Gary Cokins describe seven trends of management accounting and, among them, management accounting's expanding role regarding managing information technology and shared services as a business [36]. He also noticed the shift toward predictive accounting.

In [30], the authors describe how social and environmental accounting and environmental management reporting contribute to more sustainable value.

Others highlight the increasing role of reporting in managerial accounting [37–41]. They also emphasize the importance and value of sustainability reporting. The Bulletin of the United States Bureau of Labor Statistics in 2002 highlights the role of IT for the managerial accounting profession [38].

In his paper "The state and development trends of management accounting in the global environment", Bartłomiej Nita presents the development trends of management accounting practice in a global environment. He highlights the role of IT in management accounting, especially the role of business intelligence and big data reporting in Enterprise Resource Planning (ERP) systems [39].

Paper [40] provides theoretical as well as practical contributions to the change of the management accounting role in the era of digital technologies. The report created by Louise Ross and Ivan Kovachev presents management accounting tools useful for today and tomorrow [41]. Unfortunately, this report does not take IT tools into consideration. However, it emphasizes the increasing role of reporting.

In recent years, several researches have been conducted in order to analyze the use of Information Technology in management accounting and the potentials and drawbacks of adopting IT in management accounting [42,43].

The relevant report associated with the use of information technologies in the management accounting profession is created by the Institute of Management Accountants and presented as the Management Accounting Competency framework [43]. Unfortunately, there is a lack of focus on cognitive technologies and cognitive abilities in it. The framework contains information about the core competencies divided according to expertise level, from the basic to the expert level. The main management accountant IT competencies are: recommending and implementing the appropriate system in a complex environment, ensuring the integration of information and performance management systems, designing Enterprise Resource Planning workflows for sound financial control, creating customized reports, analyzing data using business intelligence software, leading the organization's adoption of new technology platforms as they emerge, creating flowcharts using specialized software tools, and using spreadsheet functions (e.g., graphs, filtering and sorting data, importing data, pivot tables) [43].

In the paper by Handley, the convergence of cognitive computing and sustainability is described [44]. The new way of looking at sustainability was presented by B. Barzon in the article "Cognitive sustainability in Digital Experiences" [45]. She describes the conception of cognitive sustainability supported by information technologies.

A significant amount of papers was written about smart sustainable cities [46–56]. These papers also underline the irreplaceable role of cognitive technologies and big data technologies for sustainable smart cities. Smart Sustainable Cities use these technologies to be more intelligent and efficient in enterprise resource management. The authors assure that Artificial Intelligence (AI) and cognitive technologies can help companies use real-time insights and enhance their sustainability efforts [1,44].

#### *2.2. Cognitive Technologies in Managerial Accounting*

As previously mentioned, Artificial Intelligence can help companies use real-time insights to enhance their sustainability efforts [44]. Artificial Intelligence has already enabled advanced financial analytics [57]. Tax systems completed with AI are smarter, not only in guiding accountants through the calculations and highlighting areas they might need to review, but also in providing advice and guidance to the client [58]. "Accountants are not required to do detailed research work, as that is done through artificial intelligence" [59]. Analytics introduce the benefits of efficiency in mass data collection and the potential to locate tax evaders [60]. The Internal Revenue Service (IRS) has indicated that it will continue to invest in data technologies to identify tax return errors and address issues with taxpayers as early as possible [60,61].

In turn, Baron argued that "the future of cognitive computing will revolutionize the accounting processes" [18]. Because audit judgment skills are typically developed and refined through years of experience, training, and interaction, the cognitive and big data technologies can harness these judgments from across thousands of audits to aid continuous, real-time auditing [18].

Digital cognitive assistants are helpful when users need to process data from a large number of knowledge sources. Cognitive assistants are often speech-enabled technologies that understand voice commands, recognize a conversation's context, and answer questions in a personal manner [62,63]. "Digital assistants support the complicated accounting tasks, including responding to common queries around billing and cash flow management, and even searching accounting policies and procedures and calling subject matter experts in the organization to get the appropriate information" [64]. Cognitive assistants can provide interactive decision support for information retrieval and risk assessment in the audit brainstorming sessions. On the other hand, users should be able to manage and monitor modern technologies, so they will have more time to focus on more complex, higher-risk, and strategic tasks [65].

Currently, many companies have already applied cognitive analytics in managerial accounting. "Forward-looking Certified Public Accountant (CPA) firms are investing heavily in emerging technologies" [18]. "Audit firms have nowadays been investing many resources into AI-related projects" [63,64,66]. KPMG company signed an agreement with IBM company to apply IBM Watson to a series of audit processes [63,67]. KPMG has also announced plans to apply IBM's Watson cognitive computing in other departments, for example the Human Resources department. "This technology gives the ability to analyze a large amount of data, giving them enhanced insights into their client's financial and business operations, drawing conclusions regarding client's tax statements and returns" [68]. KPMG's cooperation with Watson tries to develop selected cognitive services designed to help KPMG "meet its extensive audit-specific security, confidentiality, and compliance requirements" [64,69]. Deloitte is trying to assemble different cognitive capabilities from various vendors and integrate them to support audit processes, such as document review and predictive risk analytics [64,70]. PricewaterhouseCoopers and EY are increasing their usage of audit platforms and predictive analytics [64]. Additionally, the American Institute of CPAs and Rutgers Business School have partnered on a research initiative to advance the use of analytics in auditing [71].

However, most firms do not have access to the capital required to make large-scale investments in technologies like cognitive computing [18].

To manage and monitor advanced technologies, management accountants need to have high cognitive abilities in order to solve strategic tasks. To use cognitive analytic tools, managers need to constantly develop their cognitive abilities. Over the years, scientists and market experts have emphasized the importance of using cognitive skills in managerial positions [72].

#### *2.3. The Role of Cognitive Abilities in the Managerial Accounting Profession*

Using cognitive technologies frequently requires management accountants to possess cognitive analytics skills.

According to the Institute of Management Accountants (IMA), "Management accounting is a profession that involves partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization's strategy" [73]. Management accountants are responsible for managing the team. Therefore, they are expected to exhibit excellent leadership skills, conduct performance evaluations, provide mentoring and training on technical skills, conduct regular meetings, and provide guidance based on the directives and strategies given by management [74].

The knowledge of different accounting systems is also included in a management accountant's duties, with main modules like general ledger, accounts payable, accounts receivable, cash flows, and revenue reconciliation, among others [74]. Forecasting and preparing the yearly budget are also included in a management accountant's responsibilities. A management accountant prepares periodic closing and management reports that help the executive team with their strategic planning. Finally, a management accountant is responsible for preparing the company's financial statements and auditing the accounting data of the different departments of the organization.

The management accountant is also expected to exhibit high cognitive abilities. Researchers also underline the importance of these abilities in practice. According to one of the most popular job searching web portals, Indeed.com, cognitive skills are "the ways that your brain remembers, reasons, holds attention, thinks, reads, and learns" [73].

According to Lachman, "cognitive abilities are key competencies that are needed to meet the challenges of job demands, education, and advanced training and a key selection criterion for entry into many elite professions [75]. The cognitive ability could also be defined as a "general mental capability involving reasoning, problem-solving, planning, abstract thinking, complex idea comprehension, and learning from experience" [76].

According to experts, cognitive abilities are especially meaningful in auditing. Studies on cognitive abilities in auditing use the lens model [77], Bayesian statistics and the literature on heuristics and biases [78], analysis of variance techniques [79], descriptive variants of expected utility theory, learning and memory processes [80,81], and various aspects of process tracing methodology [82]. Later, Frederick analyzes how auditors encode knowledge in memory and the implications this might have for the construction and use of memory aids in auditing [83].

The paper of J. Dillard presents the discussion on the relevance of cognitive science to decision-making research in accounting [84].

The paper of Choo presents a major concept from social cognition called "script" and applies this notion to auditing and accounting behavior [85].

In 1992, Libby and Lipe investigated how the performance-related incentive effects of monetary payments depend on the cognitive processes involved in accounting judgment tasks [86]. They argue that this dependency exists.

J. Amernic describes another cognitive ability needed for accounting managers – cognitive complexity: "leaders in the accounting profession have cited the need for accountants to be able to function professionally in a complex and changing environment. The literature of cognitive development suggests that such individuals must possess a high level of cognitive complexity" [87].

Some authors examine the effects of adaptive/innovative cognitive style and professional development on the initiation of radical and non-radical innovations by individual management accountants [88].

Further research involved the use of cognitive tests, cognitive reflection tests, and magnetic resonance imaging to analyze brain work during the accountants' decision making process [89,90].

In 2016, researchers underlined the role of cognitive reflection abilities in accounting and proved that managers' decisions, analysts' recommendations, auditors' reports, and professors' lessons tend to be highly influenced by cognitive reflection abilities [3].

Summarizing the results of the literature study, management accountants need to collect, extract, and analyze the information from extensive databases. So, among cognitive abilities, they need to acquire advanced IT skills. This will result in a link to the skills of data extraction, information management, processing of a large amount of data, pattern recognition and privacy, and security management, and will bring new challenges to the labor market. The 2016 survey revealed that 59 percent of employers say data science and analytics skills will be necessary for accounting managers by 2020 [58].

The experts noticed that nowadays there is also a growing need for accounting students to learn financial and accounting data analysis and reporting in order to enhance their abilities [19]. This reveals the labor market's need to recruit the new generation of managers in the accounting sphere. The universities should be prepared, offering education courses that meet market needs for new specialists. In 2016, it has been noted that many accounting programs do not currently prepare students for such roles [71,91].

Wang and Wang predicted in 2016 that the accounting managers' skills needed for the next decade will be: knowledge of data extraction tools in the mining of business intelligence; use of tools that support data modeling and analysis; knowledge management skills; project management skills; change management skills; knowledge of new approaches to funding and product development; ability to use technology to attract, develop, and manage talent; knowledge of emerging payment platforms; better working knowledge of connectivity and IT security; knowledge on how applications integrate [92].

Summarizing all of the above, the main directions of the management accountant profession's transformation are related to digitalization, sustainable development, big data, cognitive computing, cloud computing, and cognitive abilities development.

Furthermore, the situation should also be analyzed in practical terms. What does the situation look like in local labor markets? Are enterprises already looking for qualified management accountants with cognitive analytics skills and big data knowledge and experience?

To check the current situation in labor markets, a study of the current demand for management accountants' positions was conducted.

#### **3. Materials and Methods**

The research was conducted in November-January 2019. First, data were collected at the beginning of November, and after that results have been checked two times until the beginning of December, during a 1-month period. A similar procedure was conducted in December and January. The empirical research was conducted according to the framework presented in Figure 1. The quantitative approach was selected to fulfill the research gap in the area of management accounting skills analysis.

The labor markets of the selected countries were examined. The goal was to compare the demand for management accountant positions in different continents and countries according to the following criteria: differentiation in GDP level, labor force, IT development level, geographical position (different continents and different European regions), population differentiation. The 5 following countries were taken into consideration: the United States of America, Canada, Poland, the United Kingdom, and Ukraine.

**Figure 1.** The research framework.

At the beginning, the most popular job search websites were selected, and their comparison was carried out. The following selection criteria were used: (1) the largest number of current management accountants posts, (2) ability to provide "advanced search" with the finding options, which allowed us to search for specific key words within the job posts' textual content, (3) applicability in studied countries. Consequently, the "Indeed" job search website was chosen.

About 33 of thousands of job posts were analyzed. For all selected countries, the same research procedure was used. To filter the job posts, the website searching mechanism was used. For this purpose, the following keywords were entered in the webpage search field: "cognitive", "analytics", "cognitive analysis", "Cognos", and also "big data", "large data", "large data sets", "large amounts of data", etc. For skills analysis, "cognitive skills" and "cognitive abilities" key words were used. For position analysis, the following key words were primarily used: "management accountant", "accounting manager", "managerial accountant", and similar.

The website searching mechanism found many relevant positions, such as: Accounting Manager, Senior Accounting Manager, Manager Accounting and Reporting, Department Budget Manager, Cost Accounting Manager, etc.

Based on the list of obtained, the number of job offers for management accountants (MA) and relevant positions containing cognitive skills requirements, cognitive analytics skills, and big data skills requirements was calculated. The results are presented in Table 1. After that, the additional core competencies were identified by using the following key words: "Project management", "Business process management", "Change management", "ERP" [93], etc.


**Table 1.** The number of job offers for selected labor markets in November 2019.

The significant difference in the number of offers among the studied countries was noticed (Figure 2). The demand for management accountant positions in the Polish and Ukrainian labor markets was more than 30 times lower than in the United States labor market.

The filtered searches in the indeed.com website yielded 18,398 offers in the United States in November, 17,600 offers in December, and 17,496 offers in January (Tables 1 and A1–A4). It was found that cognitive analytics skills are currently very important for management accountants. Comprehensive cognitive skills were required only in 9–18 positions, and 173 companies were looking for professionals with different concrete cognitive abilities—with cognitive flexibility, cognitive thinking, cognitive skills to synthesize multiple inputs and reach a single optimal solution, and similar. In 3.1% of the total number of offers, companies require from management accountants knowledge of the Cognos system. In December and January, the situation on the labor market was subject to slight fluctuations (Tables 2 and 3, Tables A5–A12). The descriptive statistics are presented in the Appendix A.

**Figure 2.** Total number of job offers for accounting managers in November–January 2019 (without filtering).



**Table 3.** The number of job offers for selected labor markets in January 2020.


However, the comparison of this data should be further considered in terms of labor market statistics (Table 4).

**Table 4.** The comparative statistics of job offers for the total research period.


Source: own elaboration based on Reference [93].

The following data were acquired. According to NationMaster database the United States labor force was 154.9 million. It was ranked at 4th place, that is, 8 times more than Canada and many times more than the other studied countries. The Canadian labor force was made up of 18.59 million people, and the United Kingdom's 31.45 million. Poland's labor force comprises 17 million of people, while Ukraine's labor force comprises 22.06 million. On the other hand, the UK's labor force per 1000 was 505.05 m, 1% more than that of the United States, which was 500.77. In Canada, the labor force per 1000 was 544.74, 9% more than in the United States. Poland's labor force per 1000 was 445.22, and in Ukraine, the labor force per 1000 was 480.92 [93]. In terms of labor force per 1000 analysis, the United States was in the leading position. However, the labor force statistics analysis significantly eliminates the difference in size demand between Canada and the United Kingdom. The results of labor force statistics analysis allow for the elimination of the difference in size demand between Canada, the United

Kingdom, and the United States, and gives these countries an advantage. Poland and Ukraine are in lower positions, but with better results due to a lower rate of labor force and labor force per 1000.

In the next step, the obtained data were filtered, and information about the demand in selected labor markets was analyzed in detail. Additionally, the descriptive statistics were calculated in order to prove the data's usefulness and to enable further analysis and data comparison for future and deeper research. These statistics are presented in the Appendix A.

In the United States, predominantly, the software experience required included, among other systems: Cognos, SAP, Essbase, Oracle Hyperion, Alteryx and Micro-Strategy Peoplesoft, SQL, Excel, DOMO, Lawson, JD Edwards, QAD, CostPoint, etc.

In Canada, the number of job offers for management accountants was about 3.5 times lower than in the United States in November (Table 1). The total of 5272 offers was filtered. It was found that 38% required big data skills; 36% required cognitive analytics skills; 0% required cognitive skills; 10% required different cognitive abilities. The popularity of Cognos and Tableau software skills requirement was noticed. In December and January, the demand for big data skills and cognitive skills dropped dramatically (Tables 2 and 3).

The software currently required for management accountants in Canada included, among others: AS 400, Cognos, Epicor, MS SSAS, SSRS, MS Power BI, QlikView, Tableau, PMP, PeopleSoft, SAP, Oracle Hyperion, NetSuite, Workday, Microsoft Dynamics, Adaptive Insights, etc.

In the United Kingdom, the total number of offers was about 9000 in November, with a subsequent decrease in the following months (Table 1). It was found that 57% of offers required Cognos experience in November; 3% required with cognitive abilities; 0% required cognitive skills; 60% required with big data skills.

The software experience required in the United Kingdom most often concerned the following systems: Essbase, Cognos, Oracle Hyperion, Anaplan, Spotfire, Microsoft Power BI, Sage, eFinancials, Excel, SAP Hana, Vector, Wims, Capex, Caseware, Lawson, JD Edwards, SAS software. Additionally, some companies were looking for experienced managers with knowledge of VBA, Python, SQL, and R.

A total of 563 offers were filtered in Poland in November, 548 in December, and 518 in January (Tables 1–3). It was found that 3% of offers required Cognos experience; none required cognitive skills; 4% required big data skills.

The software experience required was related to the following systems: SAP, Excel, Oracle, Sage. Additionally: Power Query, Power BI, SQL. In Poland, specialists with Tableau software experience were looked for more often than with Cognos. No job posts with cognitive abilities requirements were found.

In order to analyze the demand in Ukraine, the rabota.ua job searching portal was also checked, because of its greater popularity when compared to indeed.com. Very few companies were looking for management accountants with big data skills and cognitive analytic skills (from 1 to 3% of offers depending on the month), and no offers mentioned cognitive abilities.

In Ukraine, 1C was the preferred software (354 offers in November). The significant popularity of MS Excel was also noticed. It was also found several job posts with SAP, Oracle, and Cognos experience requirements, but no offers mentioned Tableau experience. Sometimes, companies (for example, Deloitte) were looking for management accountants only with BI, MySQL, or R skills.

#### **4. Results**

It was found that the situation in different European labor markets varied significantly. Generally, the research revealed differences in cognitive analytics skills, big data skills, and cognitive skills demand between the United States and the other studied countries. Presently, the number of job offers with BD skills and cognitive analytics skills requirements are higher in the United States. The smallest number of offers with skills requirements was noticed in Poland and similarly in Ukraine. In the United Kingdom, the number of these offers was often as high as that of the abovementioned countries (Figures 3–5).

**Figure 3.** The total number of offers by country in November 2019.

**Figure 4.** The total number of jobs offers by country in December 2019.

**Figure 5.** The total number of offers by country in January 2020.

The highest popularity of cognitive abilities was noticed in the United States' labor market, and it was about 3.5%. In the United Kingdom, the United States, and Canada, accounting managers are generally expected to have more advanced IT skills. In Ukraine and Poland, these skills are currently not so required.

20–30% of UK companies require management accountants to be familiar with ERP systems. In Poland, about 30% of companies require SAP knowledge or experience; 40% require advanced Excel

knowledge; 24% require a combination of ERP and Excel; 2% require Oracle experience; and 0.5% require Sage experience.

In Ukraine, the low demand for cognitive analytics and big data skills for management accountants was noticed. On the other hand, the traditional analytic skills requirements were high. The most popular software required in Ukraine was 1C (with a deviation from 60 to 70% of total job posts) and Excel (with a deviation from 20 to 25%, in SAP of about 5%, and in Oracle of about 1%). The most popular IT tool for managing a large amount of data in Ukraine was Microsoft Excel. Several companies were looking for management accountants specialized in soft programming skills: SQL, Python, and R.

Additionally, the decision to check the demand for Cognos software skills among countries was due to the fact that, according to the ranking on Cognitive Analytics Solutions Quadrant presented at the 360 quadrants website, this system is in the first place (retrieved 05.01.2020) [94]. It was found that IBM Cognos is currently the most popular software in the U.S.A. 3.3% of U.S.A companies were looking for management accountants with experience in using this software (Figure 6).

**Figure 6.** The percentage of job offers for management accountants requiring Cognos software skills in November 2019–January 2020 in relation to the total number of offers.

#### **5. Discussion**

Summarizing the results obtained from the literature study and labor market research, it was concluded that the main technologies that have an impact on managerial accounting development are: big data technologies, cloud computing, cognitive computing, ERP systems, payment platforms, e-commerce platforms, Business Intelligence technologies. These technologies create new IT trends toward cognitive managerial accounting.

The research also revealed that the additional competencies needed for management accountants are, among others: ata anagement and Information Management skills, Change Management skills, Quality Management skills, strong IT and systems knowledge, Supply Chain Management skills, Program Management skills, Project Management skills, IT system implementation skills, and Business Process Management skills. So, the experts' opinion [43,89,92,95] on the core competencies of future management accountants were confirmed. Additionally, we observed the increasing popularity of the cognitive ability "to understand the big picture" in the United Kingdom, Canada, and the United States.

On the basis of the literature study from Section 2 (especially regarding [76,87,92,96,97]) and the labor market analysis from Section 3 (on the basis of the appearance frequency in job posts), the current model of management accountants' core skills and abilities was created (Figure 7).

The model considers two methodological approaches: the theoretical and the practical approach. In this model, one set of competencies is defined for a broad range of similar job positions corresponding to management accounting. The skills model of management accountant positions is built around 3 main groups: technical (specific skills), cognitive skills, and social and behavior skills. Due to the generic character of the skills considered, the model was qualified as a generic skills model.

The procedure of model creation was constructed in line with the methodological requirements presented in the literature on the subject [98–104].

The following methodological approach was used in order to build the current management accountant skills model (Figure 7).

**Figure 7.** The framework for skills model creation.

The first stage was the target group identification. In this case, the target group consisted of management accountants and similar job positions. The second stage was the purpose and range establishing. The main purpose was to create a current model taking into consideration cognitive technologies and cognitive abilities and clearly highlighting them. The third stage was the selection of data collection methods. Among different methods, such as literature reviews, surveys, focus groups, interviews, etc., the literature review and labor market survey were selected. First, the literature study was conducted. The next stage was the model structure creation. Based on the literature study, the main structure of the model was created, including building the skills hierarchy by synthesizing them into the three main groups and providing a description with the relevant competencies for each group.

To evaluate and extend the results of the literature review, the labor market research was conducted. The next stage was the model validation through a labor market research and the model complementation with additional abilities corresponding with the main groups. At this stage, the frequency of the occurrence of abilities in job posts was analyzed. The last stage was the model revision and correction. The abilities that frequently appear in job posts and were not identified as a result of a literature study were added to the model. The abilities that do not appear in labor market analysis were excluded from the model. The model revision should be continuous. The enterprises should develop the framework checking current demand and market tendencies.

Based on the literature, a total of 30 competencies were derived. Various authors underline the key competencies required. The model contains three skill groups (Figure 8):

	- -Accounting skills: depend on job position.
	- - Management skills: Business Process Management [43,92], Change management [43,92,97], Supply Chain Management [43,97], Quality Management [43,97], Project Management [43,92], Data and Information management [92,97], Knowledge Management [92,97], etc.
	- - IT skills: ognitive Analytics [18,20–22,44,58,59,62–64], Artificial Intelligence [18–22,44,58, 59,62–64,97], Integrated Information systems [39,43,92,97], Cloud Computing [95,97], Big Data [20,25–27,39,97], Business Intelligence [39,43,97], programming [97], data mining [43,92], data reporting and visualization [19,37–41,43,97], e-commerce [92], e-marketing [92], system implementation skills [43,97], etc.

**Figure 8.** The model of current management accountants core skills.

The research has several limitations. First, it was hard to identify and exclude repeated job posts. The second limitation was that the study investigates only the "conscious demand". That means that the research was based only on the job posts which contain the concrete definition of technologies like "big data", "cognitive analytics", and more soft definitions like "large data sets" analysis or "large amounts of data". It could be presumed that some enterprises are also looking for management accountants with advanced cognitive analytics skills. However, they do not specify it sufficiently in job posts.

#### **6. Conclusions**

The era of cognitive technologies is approaching. However, many doubts related to the future of the accountant profession have appeared. Management accountants need to stay up to date with technological advances and accounting software.

Currently, cognitive technologies are already changing the labor markets of the surveyed countries, serving as an essential addition to the accounting profession. They are a tool for deep data analysis and decision making. Routine work is still carried out using ERP and financial systems.

Cognitive Analytics skills are currently required for managerial accountant positions, especially in the United States' labor market, where cognitive technologies are used by many companies. The Cognitive Analytics skills are currently predominantly required in U.S.A. companies or international large companies. The number of positions where knowledge of cognitive technologies is required in Polish and Ukrainian markets is negligible. Small and medium enterprises still implement the concept of traditional or cloud accounting with Microsoft Excel analytics. In international companies, additionally, geographical analysis skills and knowledge of multidimensional visualization tools are required. The demand for additional advanced competencies in the field of data, information, and knowledge management for managerial positions in accounting was also proved and noticed.

To wrap up, most posted jobs were targeting highly qualified specialists. Therefore, high education institutions need to modernize and modify their programs in order to meet the labor market expectations. Moreover, future management accountants should not only be technically strong, but also have high cognitive abilities in order to support strategic decision-making and drive the business forward through increasingly large data sets.

The created skills model considers the management accountant profession in terms of smart sustainable business management. It takes into consideration the cognitive abilities and technical skills which are necessary for using cognitive information technologies. The proposed model had the advantage of being based on job offers, which clearly define competencies required of management accountants, associated with new technology skills and cognitive abilities. This enables the calculation of the "aware" demand.

There is a wide range of practical applications for the developed skills model. First, it can serve as the basis for developing a competency model in enterprises. In addition, the model can be used as a starting point for the development of new and more sustainable curricula at universities, as well as the creation of new training courses, including IT courses for various educational organizations. This model also indicates the directions of software development for management accounting users.

In the future, the number of analyzed countries should be enlarged. Such a comparison could reveal the geographical spread directions of cognitive technology development in the sphere of managerial accounting. It may also help high education institutions to prepare educational programs for the next decade.

**Funding:** This research received no external funding.

**Conflicts of Interest:** The authors declare no conflict of interest.

#### **Appendix A**




**Table A2.** Pearson correlation (see Table 1).



**Table A4.** Covariance (see Table 1).


**Table A5.** Descriptive statistics (see Table 2).


**Table A6.** Pearson correlation (see Table 2).



**Table A7.** Spearman correlation (see Table 2).

**Table A8.** Covariance (see Table 2).


**Table A9.** Descriptive statistics (see Table 3).


**Table A10.** Pearson correlation (see Table 3).


**Table A11.** Spearman correlation (see Table 3).



**Table A12.** Covariance (see Table 3).

#### **References**


© 2020 by the author. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/).

### *Review* **Business Intelligence: Business Evolution after Industry 4.0**

**Carlos Andrés Tavera Romero 1,\*, Jesús Hamilton Ortiz 2, Osamah Ibrahim Khalaf <sup>3</sup> and Andrea Ríos Prado <sup>1</sup>**


**Abstract:** Industry 4.0 is a set of technologies that companies require to promote innovation strategies and obtain a rapid response in dynamic markets. It focuses mainly on interconnectivity, digital technology, predictive analytics and machine learning to revolutionize the way companies operate and develop. Therefore, this article proposes and motivates the implementation of Industry 4.0 in organizations. Studying the state of the art and reviewing the current situation of business intelligence (BI) technology, the way it has positively impacted organizations at the economic and business level in terms of decision-making and some success stories implemented in different business, academic, social and governmental environments. Moreover, it addresses the future expected for Industry 4.0 primarily in BI and how companies should face this revolution. This article provides knowledge contribution about the current state and positive consequences of Industry 4.0, and high development in technology when implemented in the organization and the harmonization between production and intelligent digital technology.

**Keywords:** big data; business intelligence; industry 4.0; data analysis; digital transformation; internet of things

#### **1. Introduction**

Business intelligence (BI) is defined as a decision-making process supported by the integration and analysis of an organization's data resources. In fact, BI plays an increasingly more critical role in several types of companies because, as information has been identified as the most valuable asset of a company, it is a fundamental resource for its development.

At present, because data constitute a new class of economic asset, similar to currency or gold [1], BI has become a challenge for information technology—Industry 4.0—as well as a very important management issue. Its importance has been especially recognized for developing analytics-based decision-making capabilities reflected in software and computer systems [2].

Business environments are becoming complex in the contour of Industry 4.0. Therefore, to provide quick responses in these dynamic markets, companies require innovations and advanced technologies [3]. In this context, technological tools, such as business intelligence (BI), are required both for processing information and for making correct decisions at corporate level. If this technological tool is implemented in an organization, it may provide several benefits such as architecture, efficient information and customer data management [4]. With this approach, companies may acquire a clearer picture of how important BI becomes in all different environments.

The highly unstable business environment, as well as the opportunities arising within the economy, require a fast and efficient decision-making process. Tracking these dynamic changes within and outside organizations while maintaining sustainable goals is indeed a challenging feat. However, this is possible because of the different modern concepts and tools available such as Industry 4.0 and BI [5].

**Citation:** Tavera Romero, C.A.; Ortiz, J.H.; Khalaf, O.I.; Ríos Prado, A. Business Intelligence: Business Evolution after Industry 4.0. *Sustainability* **2021**, *13*, 10026. https://doi.org/10.3390/ su131810026

Academic Editors: Adam Jabło ´nski, Marek Jabło ´nski and Dariusz Zarzecki

Received: 2 July 2021 Accepted: 16 August 2021 Published: 7 September 2021

**Publisher's Note:** MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations.

**Copyright:** © 2021 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

A survey in Thailand in which 500 questionnaires were collected from those responsible for PYME, it was found that elements of Industry 4.0, such as Big Data, IoT and Smart Factory, have a positive role in promoting the implementation of information technology (IT), which contributes to sustainable business performance [6].

A study by Slusarczyk showed that most people recognize the concept of Industry 4.0 ´ as a great opportunity for development and improvement of competitiveness, although the state of readiness of each company to implement it varies greatly depending on the country, sector or each company [7].

Other environments are positively impacted by BI, as per 39 studies cited in Table 1. At 56%, the industrial or business environment is the most positively affected by BI from all the others, as attested by 22 studies out of the 39 reviewed. Here, the academic environment ranks second at 21% and a total of eight studies published out of the 39 reviewed. Throughout this document, the different environments in which BI exerts a total positive impact will be discussed in detail. This paper is a review of existing technologies.

**Table 1.** Impact from BI in certain environments.


This article motivates companies to install or implement the technologies that cover Industry 4.0, showing the state of the art and benefits that have been identified by the use of these tools that cover the concept of BI and Industry 4.0. This contribution will help small and medium-sized companies since these technologies constitute a support for their development and constant growth, making processes and operational aspects easier with intelligent digital technology.

The motivation for writing this article is to determine the impact of Industry 4.0 on the administrative and operational processes of all companies, regardless of their size or sector, relying on studies carried out in different countries to show the real contribution of this concept that has transformed many companies.

This article aims to motivate the implementation of Industry 4.0 and highlight the positive consequences for companies that undertake the change and technological revolution.

#### **2. Methodology**

Document selection for this paper was carried out through the following electronic sources: MDPI, IEEE, Scopus and Science Direct. These information sources were selected as a basis for being indexed and cataloged as Q1 to Q3, being pioneers in technology knowledge base and for having a lot of research. Firstly, 3689 articles were identified as the initial basis, 1354 articles and conference proceedings were selected from the journal MDPI, 1160 articles corresponding to the IEEE source, 745 were chosen by Scopus and finally 470 articles were filtered by Science Direct. After this identification, and looking for updated information, articles between 1 and 3 years of publication were selected, with this filter producing 1774 articles. Next, files that did not have Business Intelligence or similar terms were excluded, and in this process, 650 documents resulted. Finally, 44 papers were selected, that included research, case or further studies, and paper reviews on Business Intelligence, Big Data, Industry 4.0 and the Internet of Things. The process is presented in the Figure 1.

Review articles can be classified into several categories according to target, evaluation, reasoning and examination. In [8], we observed a list with the main categories and methodological aspects of search, analysis and synthesis, which is shown in Table 2.

**Figure 1.** Paper selection process.

**Table 2.** Review categories and their methods.


The structure and approach of this paper correspond to a state-of-the-art review as shown in Table 2. It also addresses the issue, contrasting the approaches of the different sources and proposing how these can guide future research on the subject. Regarding the synthesis methods, the document is structured by thematic points or sources, as needed [9].

#### **3. The Impact of Business Intelligence**

BI has become indispensable for strategic decision-making in companies and governments around the world. It plays an important role in business survival, in maintaining relationships with other companies, counterintelligence, goals and both short-term and long-term objectives. Moreover, the studies [10] confirm benefits from BI implementation, including improved performance, efficiency, productivity, business growth, resource planning, supplier–buyer relationship and cost reductions, which can ultimately lead to a competitive advantage [11].

Based on these studies, we classified the studies considering the different reasons that the authors of these studies were motivated to examine BI. The motivators have been classified into five different categories in which successful implementation factors is the most cited reason in the different studies with a total of 19 studies. These categories are listed in Table 3.

As per the information denoted in Table 3, organizations are faced with large datasets that cannot be used without BI as a motivator for competitive advantage [12]. For better decision-making, organizations use BI to build insights from their data. A BI solution follows a BI architecture. The uses of these technologies in all fields, including healthcare, automotive, finance, gaming, environmental surveillance, agriculture, sports, energy management and safety, are changing the perspective at the work as well as fun levels [13]. Note that additional advancement of these technologies can contribute to developing hyper automation and hyper connectivity, leading us to the dawn of Industry 4.0. The advancement of BI is at the core of improved performance of all other technologies and the evolution of this industry.

**Table 3.** Authors' BI research motivators.


The sources defined Industry 4.0 as "a concept used to describe related technological advances that provide the basis for increasing the level of digitization of industrial and business environments" [14]. Usually, when discussing the development of Industry 4.0, four key components are distinguished. The key components are shown in Figure 2 in an ascending manner as per their impact. Figure 2 was designed according to the information analyzed from [15].

**Figure 2.** Industry 4.0 key components.

From the information consulted in [15] and shown in Figure 2, it is considered that Core Technologies have had a 68% impact on Industry 4.0. This 68% has been reflected in organizations with a high implementation of Big Data and Artificial Intelligence, providing organizational development and multiple advantages for the management of the main assets of the company. On the other hand, it offers predictive analytics for high-value decision making. Virtual reality and 3D printing have also worked to support training and operational processes. In other words, Industry 4.0 grows stronger every day and becomes more critical for organizations. Secondly, we have the Internet of Things, which continues to grow exponentially to position itself at the top of the key components. Cyber–physical systems and smart factories have continued to gain strength.

In Industrial Revolution 4.0, which is defined by the extensive use of different technologies in all fields, particularly on the Internet, users are required to be able to quickly access data and information to make proper decisions wherever they are [15].

Industry 4.0 is a process that generates technological transformations in the design, production and distribution of manufacturing systems and products, oriented towards automated and interconnected industrial production [16]. This has a significant impact not only on production processes, but on project management in companies [17], on the operation and future of the regions, and it is essential to understand the phenomena that take

place in the social and economic space and even in human resources [18]. Industry 4.0 has been shown to contribute to overall efficiency gains in sustainability (clean and renewable energy) [19], adaptive work environments, financial performance and innovation [20].

The era of smart factories is called "Industry 4.0." This term was first coined at the Hannover Fair [21] in 2011. Industry 4.0 awareness and the vision of "smart factories" initially emerged because of government projects to support using Information Technologies in manufacturing [22]; therefore, it is closely linked to industrial, technological and automation operations. Moreover, as expressed by a government procurement specialist in Florida, this indicates that part of the intelligence collected by organizations should be focused on directly doing business with the government [23].

In this era of smart factories, market intelligence and BI are key to their development. Market intelligence is the cornerstone of the marketing concept; it is essential for strategic marketing planning and implementation [24]. Although the importance of market intelligence is widely accepted, the manner in which managers can ensure the generation, dissemination and responsiveness of market intelligence throughout the organization remains an ongoing challenge.

It is a challenge for company managers to identify tools that can be highly effective and have considerable impact when applying BI in their organizations. Using a survey [25], certain suitable data visualization tools were selected: Jasper Reports, Pentaho, SpagoBI, Palo/Jedox, Tableau and Qlik. Table 4 provides a comparison of these BI tools among one another [26].


**Table 4.** BI Tools and application analysis.

The information generated via different reports is fed by source databases (such as social networks and news websites that can be heterogeneous in practice) [27]. These collections bring about the difficulties of managing and organizing complete information and they have been optimized using different algorithms to achieve the best decisions for companies. One of the multiple algorithms is submitted through a study [28] that discussed the implementation path and configuration of the reinforcement learning model in a big data scenario. Then, it uses the relevant background of the zero-inventory case and the current zero-inventory situation. Subsequently, the specific application of the reinforced learning method in BI is validated through an assessment with zero-inventory application cases in companies using the Qlearning algorithm. In this manner, the authors proved that an enhanced learning method can be used to solve certain practical problems.

A study suggests that organizations are increasingly expecting their employees to make data-driven decisions to gain competitive advantages [29]. This expectation requires greater flexibility and faster decision-making support. Classic BI standard reporting often cannot sufficiently meet these demands. The use of Self-Service BI (SSBI) software has provided increased flexibility, and thus has been instrumental in meeting these new demands. Consequently, this software can help reduce the workload of the IT department and free up resources for other activities.

However, the implementation of SSBI software alone does not necessarily lead to a better BI environment. It has already been determined that, to realize the full potential of a BI environment, a change in culture and behavior is necessary.

#### **4. BI Implementation Today**

In today's economy, intangible assets have gained considerable appreciation. Therefore, an important part of business value, such as the IP strategy, plays an essential role in defining, creating and maintaining a winning business strategy. This allows the creation of value and the strengthening of the multiple aspects of a strategy [30].

As a strategy, BI goes hand in hand with competitive intelligence (CI). Because of their multiple advantages, both make up an interesting pair for organizations. CI is based on scanning and monitoring information that significantly influences the market [31]. In this perspective, the development of CI tools provides organizational individuals with the most appropriate conditions for facing challenges. CI generates analyzed data and information that can be integrated into organizational business.

However, the BI and Analytics (BI&A) operational combination has emerged as a new approach to value production data in real time, thus favoring companies in their managerial decisions [32]. Big Data create value and exhibit transformation potential in the organization and for process improvement.

In accordance with these concepts, the applications and implementations of BI in the different organizational environments will be detailed, thus demonstrating its valuable contribution. A case to be highlighted is a BI application for an industrial and food company in which information from various database sources is arranged to provide objective and vital information for the company to visualize its weaknesses and strengths [33]. This study seeks to gather enough evidence for integrating information through BI technology, which would allow management to make more assertive and effective decisions that will benefit the aims of different organizations. Moreover, there is the case study of the largest fertilizer manufacturing company in Indonesia [34], which implemented BI in its business activities. This study discusses the vital role that BI plays in the process of providing relevant information based on accurate data available in a BI application.

Another implementation was conducted at two Mexican companies [35] where the adoption of a BI platform is reviewed. The results from this study revealed that the response of these organizations is based on information management because this information is generated and shared through historical data. For these reasons, the company is deemed as having reached a high level of maturity, which fosters a culture in the standard management of information. This data governance provided the company with capabilities to successfully meet market requirements and therefore guarantee its survival [36].

Another case study, but this time in an academic environment, describes the implementation of BI in libraries [37]. The application of BI technology is presented as a case study where libraries overcome the limitations of their existing reporting module using the BISIS library system. During the development of a data warehouse model, both user requirements for reports in BISIS and existing transactional databases are assessed. Based on that analysis [38], three data storage models were proposed:

• A Model Describing Data in the Library Collection:

A dimensional model of the BISIS data warehouse used for analytically processing the data included in the library collection.

• A Model Describing Library Circulation Data:

A dimensional model of the BISIS data warehouse used for analytically processing library circulation data.

### • A Model Describing Member Data:

A dimensional model of the BISIS data warehouse used for analytically processing member data.

In addition to these models, examples of reports generated using an OLAP tool are provided. BISIS users can perform business analysis in a more user-friendly and interactive manner because these reports are not limited to predefined report templates. Librarians can easily generate customized reports tailored to specific library requirements.

Another academic study [39] introduced a BI framework design for data visualization and its associated text narration. The key idea is to display an image as a response to the reading position in the text area and vice versa because an image can express an idea better than text. Still, the interpretation of the displayed information sometimes leads to a lack of communication between the author and readers because an image can have multiple interesting characteristics and readers can perceive the author's point of view at different angles. To convey points of interest to readers without reducing the effectiveness of the text, synergy is required between the imaged displayed and the corresponding text narration. This aim was achieved via a BI framework [40].

Examples of BI implementations were reported at the government level. The study conducted an analysis based on a BI system at a bank to identify areas where value may be added [41]. The results of this study demonstrated the positive effect from technology resources in the process of adopting this technology and the importance of effective results. As per all these cases described above, it is possible to conclude that the dissemination of data in real time between companies, given the availability of adequate analytical tools and methods, can have a significant impact on any company. These findings are reinforced in a case study conducted in Hungary on the Industry 4.0 phenomenon [42].

#### **5. Future Research Issues**

Sustainable development and the circular economy are two important issues for business development and market competition. The programs seeking to integrate sustainability with industrial activities include the reconfiguration of production processes to reduce their impact on the natural system, the development of new eco-sustainable products and the redesign of the business model [43]. The use of information and management support tools is at the core of company digitization assessments. One study examined integrated enterprise resource planning (ERP) systems and business intelligence (BI) tools, which had been used independently of each other when migrating to industry 4.0 technology [44]. Centralized functions such as research and development, asset optimization, corporate planning (strategy, investment planning, finance) and supply chain, along with any other functions, provide significant business value. The integration of these functions across Industry 4.0 offers significant business value, providing strategic and operational benefits. The resulting main digital transformation objectives are listed in Figure 3.

**Figure 3.** Digital transformation goals.

Another relevant Digital Transformation objective is specified in the study conducted by Zafary [45], which denotes the value of integrating information systems and ERP in successful BI implementations. The results of this study provide an opportunity for other researchers to implement a cost optimization approach.

If we continue reviewing the digital transformation process for BI, in the age of Industry 4.0, highly automated industries have been created by advanced digital technologies such as Internet of Things, Big Data analytics and data visualization [46]. These recent technologies have been extensively used in industries as dashboards, a BI tool that provides analytical data insights to corporate executives and business managers for decision making regarding system and process performance optimization [47].

Figure 4 shows certain Industry 4.0 technologies as an industry framework with core technologies.

**Figure 4.** Industry 4.0 framework with core technologies.

A study conducted in Dubai on adopting the new advances of Industry 4.0 [48] reveals the critical role marketing teams play when influencing the decisions to adopt said technology and achieve results. This study concludes that adopting the revolutionary Industry 4.0 technologies may generate a high level of unemployment, but both Millennials and Gen Z have a greater competitive advantage in this technology. The results make it unequivocally clear in all respects that certain issues of this technology remain a notable area of concern. For example, large global companies usually understand innovations and procedures faster, and SMEs are lagging behind because of the weight of speculation [49].

This could be considered as a prediction for the near future of organizations. BI and ERP have become key for business activities and a requirement for the later phases of industrialization. For instance, an Industry 4.0-compliant ERP system is able to fully integrate with manufacturing execution systems [49], put the puzzle pieces together and provide a unified view of business operations that allows companies to better manage and improve industrial processes. A joint BI and ERP implementation is reflected in a study performed in China [50]. This study assesses the background, related technologies and the existence of demand controls in BI projects. The BI project is an analysis of business data generated by ERP, and it will serve as an important tool for leaders to assess the current situation of the company, make forecasts and plan future decisions [51]. Therefore, business intelligence (BI) and enterprise resource planning (ERP) have become key issues for business activities and a requirement for later phases of industrialization. They have also been recognized as important in decision-making by building an analytical capacity and providing a holistic framework for technical systems in production, quality management, predictive modeling and maintenance, simulation techniques, etc. [52].

At present, the acquisition, development and retention of human resources is of strategic importance [53]. Companies send the best and brightest expats to foster their development and guide the development of local talent who may eventually replace expats. From this perspective, domain-specific job offers can be considered as an indicator for analyzing and understanding competencies. Considering the requirement for a qualified BI workforce in the near future, an empirical study was conducted [54] on job offers to assess basic skills. The results from this study can provide valuable information:


#### **6. Data Privacy and Security Approaches through AI Approaches for Business Evolution**

Companies handle a lot of decentralized information, and with the arrival of Industry 4.0 and business evolution, it is required to have a complete, available, private and confidential repository. Six articles were reviewed showing the effect of the implementation of information technology from the technological point of view through Artificial Intelligence, Business Intelligence, IoT and Cloud Computing. A summary is shown in Table 5.


**Table 5.** Concepts of information technology implementation.

The implementation of the technologies that cover Industry 4.0 allows to improve the information of the companies, with a focus on privacy and security.

#### **7. Conclusions**

In brief, this study concludes that technologies such as big data, BI and the Internet of Things are actual development pillars for companies because they support companies in terms of decision-making, forecasting and corporate economy. If these technologies are in turn supported by effective leadership and training, development would be even greater.

Moreover, this study evidenced that implementing these technologies fosters company success when coupled with the proper use of their primary asset, which is information. Furthermore, BI technology helps a company to achieve their primary business objectives.

This study highlights the importance that the integration of ERP, IoT and BI technologies acquires, contributing to growth in all organizational aspects, beginning with changes at the operational level and concluding with a decisive basis for managerial decision making.

In the near future, the implementation of these technologies will be promoted in smaller companies, thus strengthening their economy and constituting an indispensable support for their development.

**Author Contributions:** Project administration, Funding acquisition and Writing—review & editing, C.A.T.R.; Investigation and Writing—original draft, A.R.P.; Resources and Methodology, J.H.O. and O.I.K. All authors have read and agreed to the published version of the manuscript.

**Funding:** This research has been funded by Dirección General de Investigaciones of Universidad Santiago de Cali under call No. 01-2021.

**Institutional Review Board Statement:** Not applicable.

**Informed Consent Statement:** Not applicable.

**Data Availability Statement:** The data that support the findings of this study are available from the corresponding author upon reasonable request.

**Conflicts of Interest:** The authors declare that they have no conflict of interest to report regarding the present study.

#### **References**


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