Thursday, 22. December 2016

Eight Challenges of Digitalization for Controllers

In the coming years, controllers must face eight central challenges resulting from digitalization. Their task profile, toolbox, and mindset must be adapted to the new parameters. Looking ahead, the number of controllers will drastically decrease as controlling continues to become an element of management philosophy.

Challenge 1: Data management

Controllers must invest heavily in the foundation – the management of data is more important than ever. A prerequisite for the meaningful use of large amounts of digital data – such as with predictive analytics or value driver trees – are fine-grained, error-free raw and master data. If these are not available, any fancy tools and resulting digital renderings will be of little value ("garbage in, garbage out"). Accordingly, in the digital age, the traditionally much hated management of raw and master data plays an even greater role than ever before. An additional – and no less important – task of controlling is to ensure the consistency and compatibility of diverse data and analysis models within the company. This task is also still often neglected.

Who has the lead? From the controlling point of view, the answer is simple: Controllers must ensure that sovereignty over the management of financial and non-financial raw and master data lies in the controlling department. Today, the sales department is often still in charge of customer-related data, whereas personnel data belongs to HR, etc. Such practices, however, make little sense in the digital age.

Controllers must also define their role in relation to the newly emerging data science centers, where mathematicians, physicists, and computer scientists analyze structured and, especially, unstructured data (masses) from all relevant areas of the value creation chain. If controlling aims to remain the "single point of truth" within the company, this has far-reaching consequences – especially concerning the organization of data management.

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