Controlling Transformation in the context of a more and more digitized environment
Innovative information technologies, shortening product lifecycles, and volatile market demands are transforming and accelerating the way business is done. As a result, it will become more and more important to accurately forecast the future. Creating value from data, that is, having the ability to extract data relevant to the controlling process in real-time and to make the right data available/transparent to the right people, and to quickly analyze it will become a decisive competitive edge. In the future, digitalization opportunities like big data, real-time availability, and predictive analytics will make a valuable contribution to all business functions.
A paradigm shift in business management practices
Digitalization and the opportunities it presents are causing a paradigm shift in business management practices. They will allow finance / controlling departments to increase their value contribution to their organizations. This, however, also means that companies must and will reshape the way the controller’s role is perceived both by themselves and throughout the enterprise. But how does digitalization actually impact the controlling and finance departments?
- Real-time and big data a creating an ever-increasing flood of heterogeneous data that is relevant to the controlling process and affects all business functions.
- The pressure of having to accelerate decision making increases the need for real-time and ad-hoc analytics along the entire value chain.
- Forecasts and operational decision-making are increasingly being automated by way of predictive analytics tools.
- The sheer number of digitalization initiatives in companies are making it an absolute must to harmonize the digitalization strategy throughout the enterprise and to enforce strict governance.
- Establishing digital controlling practices is a transformative process that requires a structured approach to employee and organizational development.
- The finance / controlling department is increasingly involved as and charged with the responsibilities of a business partner and strategic early warning system for senior management. Controlling is moving closer to the business departments.
The path to the future of controlling
But what specifically will finance / controlling departments have to do to make the transformation from being a mere collector of data to becoming a strategic early warning system for decision makers? More and more heads of finance / controlling departments are realizing that their existing process and organizational structures, prevalent systems, and data models are no longer integrated to a degree that satisfies growing stakeholder demands.