The concept of controlling, or management control, is by no means new. Some even trace it back to the 1930s while in its more modern connotation, that is, using technological tools, it can be traced back to the 1970s. The History of SAP in controlling, for example, begins shortly thereafter, from the earliest historical versions of the software. Today many companies, particularly large ones, already make use of various controlling tools, but very often linked to traditional paradigms.
Implementation of management control – controlling in modern industry
In the more “traditional” conception, the idea of management control was, as we have mentioned, linked mainly to large companies, for a very simple reason: considerable resources were required to have the tools and personnel needed to carry out effective management control. Today, however, thanks mainly to digital transformation, it is possible to remove from the equation the part of the cost associated with manual data collection, making controlling accessible to a wider range of companies. Typically within a company, management control falls under a specific figure, the controller, whose duties are established by the UNI 11618:2016 standard. As we can read on the official website of Assocontroller (of which Regesta has been a member since 2019) the management controller has 7 main tasks, among which we also find that of preparing the information architecture. In short, today it is impossible to think of a management control that does not rely on advanced and efficient information systems.
Management control: tasks in the digital environment
We mentioned just above how, among the tasks of management control, there is also the preparation of the information architecture. Let us look, in more detail, at some of the main issues that those involved in controlling should get into.
Data analysis: without a doubt, management control must have access to dedicated analysis tools. This also means that, when implementing or improving the IT infrastructure, it will have to take care of arranging the functionality it needs to perform its tasks.
Automation: for similar reasons, controllers should take a closer look at the implementation of advanced automation tools, e.g., Robotic Process Automation (RPA), which enable more efficient management of daily operations and the ever-increasing amount of data that any system today generates.
Artificial intelligence and machine learning: today, AI is a widely used concept, thanks largely to the popularity of generative AI, but applications in the field of business analysis and business intelligence have been known for some time. Management control can benefit from it in many ways, from simple analysis to forecasting and optimization.
The advantage of implementing the information infrastructure to the fullest is, related mainly to the concept expressed just above: increasingly advanced and automated analysis tools make controlling accessible even to those realities that could not, for reasons of resources or opportunity, adopt it by traditional means.
How to implement management control – let’s understand its usefulness
Before we look at the basic steps for implementing management control, let us recall its main function, which is to direct the company toward achieving business objectives. To be able to do this, those involved in controlling must have, on the one hand, the ability to access company data easily and quickly, and on the other hand, the ability to communicate and transfer information with the entire company chain in an equally smooth and efficient manner. In order to proceed with the implementation of controlling, therefore, it is first necessary to carry out some checks, both from the point of view of technology and business procedures. Since in the ideal scenario the adoption of a technological solution coincides with its use, here we enumerate the former while taking the latter for granted.
What is needed for good management control
Since management control involves monitoring on all levels of the company, it is necessary for the controller to also have access to financial data, as well as monitoring tools throughout the company’s supply chain. Since in most cases when we think of management control we mainly refer to economics, let’s look at what is needed in this case.
First, you need an effective budgeting system that is shared and used effectively throughout the corporate supply chain. Then, you need a system that allows you to verify goals and results, preferably automated and equipped with tools for periodic, on-demand analysis.
A system for creating reports is indispensable, and here again automation is a valuable support. Finally, a good communication infrastructure that makes data usable and permeable is indispensable so that strategies and solutions identified by the controller and approved by management transfer quickly to the entire company.
Learning smart management control
As we have mentioned, today’s information tools can offer considerable support to management control activities and open up scenarios and opportunities simply unthinkable with traditional tools. For those who want to learn about all the opportunities offered by SAP and generally learn about the main controlling strategies that can be implemented through Digital, Regesta offers a professional course in Controlling that offers theoretical and practical skills, suitable for both professionals in the field and those who want to implement a new system.
See testimonials from participants of the first edition of the Regesta Controlling Pathway.
