The best for a management controller is to have a stable budget reference. The organisation must allow it to be sufficiently stable on its own. When the company, regardless of the size, constantly reinvents itself, it is difficult to imagine having a fixed database, fed by rigid processes. The management control will, therefore, seek flexible collection and analysis tools that are adaptable at a lower cost.
Management Control in a movable environment
When companies are agile, their financial management must be as well. Their management controllers are therefore constantly adapting. They must be able to juggle the emergence of new offers, new product lines, changes in business models – an on-premise software becomes available in SaaS mode – or distribution strategy – disappearing or establishing an indirect channel of the point of sale.
Management controllers will also be affected by internal changes such as, teams that appear, disappear, merge, and evolving financial models. It can include margins on fixed costs or variable costs and reinventing budget management methods like rolling forecasts, zero-based budgeting, etc. At the same time, they are asked to become more efficient with shorter production times to less than a week for reporting, forecasting, and re-forecasting.
Involved in mergers and acquisitions
Another challenge hangs over management controllers who would dream of routine such as mergers/acquisitions. The number of such operations has only increased over the past 10 years, and 2017 was a record year. As early as 2015, the annual Management Control Observatory revealed their strong involvement in the processes of external growth. It talks about at the beginning to be able to assess the performance of the acquired entity during the “due diligence” and then to align the monitoring of processes and budget repositories altogether. This requires multiple extractions, analyses, and simulations before hoping to bring it all together in a common tool.
Whether linked to mergers/acquisitions, strong growth or changing market conditions, this need for agility, which irrigates management control, concerns structures of all sizes. Of course, we are thinking in the first place of SMEs in scale-up mode, which has made of their adaptability a hallmark. But large structures, which carry out large-scale organisational changes, set up new teams for large projects and acquire new businesses, can also have budget repositories that are a bit fixed and very varying.
Excel The Essential
Requested to be agile itself, management control can rely on performance monitoring solutions that generate stiffness? Can it afford the luxury of spending months in a workshop with its IT Department and/or external consultants to set up a data repository to move, without losing in reactivity?
Quite a challenge. And to raise it, the method is not new: Management controllers rely on Excel. Either because, in a growing structure, they have defined their own rules, organised the processes of collection, consolidation, forecasting, and analysis of variances. Or, because Excel is a common language, capable of preparing and blending information from separate systems to allow for studies, simulations, and decision-making.
But management controllers are the first to suffer from Excel: Managing erratic spreadsheet versions, lack of consistency control, uncertain data quality, and complex maintenance of VBA macros. A solution like Gathering Tools will enable them to secure their Excel process, preserving the existing and the “Look & Feel” of the spreadsheet. They will be able to rely on their financial consolidation tool in Excel without giving up their agility.