Digitalization of the Finance Function
From management controller to Performance Manager: the job of management controller is constantly evolving. Discover how digitalization is transforming the finance function.
FROM MANAGEMENT CONTROLLER TO PERFORMANCE MANAGER The role of the management controller is constantly evolving. This has happened in several stages. For more than 10 years, they have gone from collecting, checking, or pointing out figures, to checking and analyzing figures in collaboration with the business units. To do this, they had to equip themselves with tools. This was the era of Business Intelligence, which is, above all, a tool for reporting and analyzing company data. For that matter, there's nothing intelligent about it. The analysis is still guided and executed by the management controller. It is also ultimately they who suggest the decisions to be made. Afterward, they can ask themselves what impact a decision will have on future data, run simulations, then translate a strategy into operational conditions, agree on a plan, explain it, and discuss it with the different departments of the company. It is more recently that the CFO or the Head of Management Control have built models allowing them to plan data, the company's performance. For the past 5 years, Performance Management has become the main concern of CFOs. For the metaphor, we have moved from the rearview mirror to the windshield, and our management controller has become a Performance Manager. In the same movement, we have moved from Excel to more industrial, more sophisticated systems. NEW CHALLENGES Now, we have arrived at a new era, which consists of comparing yesterday's windshield with today's rearview mirror, drawing conclusions to adapt the model accordingly. The question is always the same: do I, as a management controller, have all the necessary data to design a reliable model? Do I need assistance given the new flood of data brought by Big Data today? Do I need to automate certain tasks to focus only on the key factors or data of the company? But ultimately, what are these key data or factors of the company? And even further, do I have the right data to accurately estimate the key factors and build the right plan? Have I fully understood all the mechanisms? Can't we highlight the key data and automatically assign a comment to them? THE CFO BECOMES A COMMUNICATOR In parallel, the CFO is given a new mission. At the crossroads of all company departments and external partners, they must present data, forecasts, budgets, and plans effectively. They must *script* the data to tell a story and convince their audience or align their collaborators. This requires, depending on the people they communicate with, choosing the key data wisely. THE CONTRIBUTION OF NEW TECHNOLOGIES New technologies will help them highlight this data, propose mechanisms, correlations, and build the first level of comments. But financial data alone is not enough to effectively design the windshield and define the right plan. We need more data! And especially those from the business units, such as: knowing who sold, when, what, how, knowing store closures, retrieving foot traffic data or a door threshold, hour by hour, everything that can be essential in the analysis and comparison of sales data. Most of the information is somewhere in the company's information system, and new technologies will allow us to extract it, store it, and even analyze it. Faced with this mass of data, the job of the Management Controller, of the Performance Manager will evolve again, the Financial Department will surround itself with Data Scientists who will be able to highlight key data, establish and detect correlations, parameterize the system to automate the most laborious processes, and propose interpretations, mechanisms, forecasts, or comments. FOCUS ON EXTERNAL DATA We can go even further because the company's data alone is not enough. It is easy to imagine that data external to the company, such as weather, global warming, terrorist risk, have an impact on sales and company performance. Moreover, OPEN DATA makes phenomenal amounts of data available. For example, it's easy to imagine that today's and tomorrow's weather or regulatory conditions have an impact on the production and, consequently, on the price of millions of bottles of COGEVI Champagne in Aÿ (Champagne that will be sold 15 months later, 3 years, or even 10 years for some vintage Collet or Jacquart), essential oils at PURESSENTIEL, or the sale of fruits and vegetables at INTERMARCHE. Of course, plane crashes condition the sale of engines, brakes, and landing gears of the SAFRAN group. These are simplistic examples, but the reality and mass of business and external data lead to complex situations where strong partnership with business units is necessary. Our team will also need, to interpret figures and identify mechanisms, a modern Performance Management system involving statistics and artificial intelligence. IMPACTS AND DEVELOPMENTS Facing the ongoing digital BIG BANG, this desire for more reliable processes and forecasts, more integrated teams, what are the main challenges for the CFO: Open up possibilities to go beyond financial data, integrate business data but also external data Automate, robotize, use Big Data technologies to deal with the mass of data, laborious and repetitive tasks Communicate to explain the company's strategy and align operational staff Effectively detect and manage talent because trades are evolving or will evolve. Thanks to these new technologies, tomorrow, the CFO, the Management Controller, jointly with the business teams, will be able to correct, adapt their models and further improve the reliability of their simulations, their plans, and communicate them to their entourage. However, let's keep in mind that it's the team that makes the difference because most of the time, you only find what you're looking for. Artificial intelligence and statistics are just tools.