Digital Transformation in Management Accounting: Drivers, Barriers and Evidence from Saudi Arabia

Abstract

Purpose: This study examines how organisational drivers and implementation barriers shape digital transformation in management accounting across Saudi organisations. It addresses the limited empirical evidence on the simultaneous influence of enabling and constraining conditions within an emerging-market management accounting context. Design/Methodology/Approach: Survey data were collected from 190 management accounting and finance professionals in Saudi organisations and analysed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The model estimates the effects of a four-item Drivers construct (management support, digital strategy, employee motivation and resource readiness) and a four-item Barriers construct (resistance to change, digital skills gaps, systems-integration difficulties and security/privacy/regulatory concerns) on a four-item Digital Transformation construct. Measurement reliability and validity, structural paths, collinearity and effect sizes were assessed, followed by a supplementary robustness model controlling for organisation size, organisation type and respondent experience. Findings: Drivers exert a significant positive effect on digital transformation (β = 0.498, p < 0.001), whereas Barriers exert a significant negative effect (β = −0.431, p < 0.001). The model explains 54.2% of the variance in digital transformation (R² = 0.542). Both predictors make substantial incremental contributions (f² = 0.506 and 0.381, respectively), and collinearity is low (VIF = 1.068). The focal relationships remain stable after controlling for organisation size, organisation type and respondent experience (Drivers β = 0.493; Barriers β = −0.435; both p < 0.001). Implications/Originality/Value: The study moves beyond treating digital transformation as a purely technological initiative by modelling enabling capabilities and implementation frictions simultaneously within management accounting. It provides evidence from Saudi organisations showing that digital transformation depends on strengthening organisational readiness while reducing human and systems-related constraints, and it uses the TOE framework as a contextual organising lens rather than as a rigid three-dimensional measurement structure.