Intangibles make up the top 9 value drivers in the digital age

Article by Samantha White | Featured on CGMA

In today’s digital economy, intangibles are more important than ever to the success of a business. New CGMA research found that the top nine drivers of value in the digital age are intangibles, such as customer satisfaction and brand reputation.

The survey of 744 finance executives in 34 countries was conducted for the CGMA report The Digital Finance Imperative: Measure and Manage What Matters Next.

It found that the most important determinants of value in a business were:

  1. Customer satisfaction (76% of respondents ranked this among the top five determinants of value in their business)
  2. Quality of business processes (64%)
  3. Customer relationships (63%)
  4. Quality of your people (human capital) (61%)
  5. Reputation of brand (58%)
  6. Strategic decision-making (43%)
  7. Strategy execution (40%)
  8. Patented product or processes (27%)
  9. Supplier relationships (26%)
  10. Quality of (fixed or physical) assets, such as plant and equipment (15%)

The accountant’s role in the digital age

In the past, management accountants have been the owners and producers of data and insight. But the survey shows that data about intangibles are more likely to be produced and owned by other functions. For example, information about competitor activity might be held by marketing, and productivity and engagement data might be owned by human resources.

So what is the role of the accountant in the digital age?

Businesses need new key performance indicators (KPIs) to manage intangibles as traditional performance metrics may not capture the value being created by this type of asset. To create these new KPIs, organisations must make connections between financial outcomes and pre-financial measures that they can use as leading indicators, usually based on a causal relationship or correlation.

Management accountants can take on this challenge, acting as “brokers of information”. The new role involves assembling and validating the right measures and analyses to ensure informed decision-making and performance management. They can also help to translate analytical insights into commercial insights to further boost performance.

The authors of the report, which was sponsored by Oracle, suggest that these brokers:

  • Engage business managers in collaborative conversations to probe root causes;
  • Identify potential leading performance indicators; and
  • Source data that could provide measures for management.

Supporting more informed decision-making throughout the business is a crucial role as digitisation could commoditise products and services. In this context, the quality of an organisation’s decision-making and performance management will determine its ability to differentiate itself from competitors and earn higher returns, according to the report.

In many organisations, the finance function has a long way to go in adapting to the digital economy. Survey respondents were asked whether their finance function had fully realigned or engaged to support the following activities:

  • The setting of targets and the selection of financial performance measures to support the new value drivers: Just 33% agreed.
  • To provide non-financial measures of progress towards strategic intent: 15% agreed.
  • To support the identification of the intangibles to be measured and managed to ensure long-term success: 15% agreed.

Samantha White ( is a CGMA Magazine senior editor.

Isler Northwest LLC is a firm of certified public accountants and business advisors based in Portland, Oregon. Our local, regional, and global resources, our expertise, and our emphasis on innovative solutions and continuity create value for our clients. Our service goal at Isler NW is to earn our clients’ trust in us as their primary business and financial advisors.

Isler Northwest

(503) 224-5321

1300 SW 5th Avenue
Suite 2900
Portland, Oregon 97201