Management accounting is often criticized for not having evolved enough since the rapid acceleration of digital transformation in businesses. And yet, we will see how management accounting in companies has been accelerating its digital transformation for several years now.
Contents
How has digital technology transformed management accounting roles?
SIf we stick to the fundamentals of the profession, management accounting remains focused on the production ofor budget, forecasts, and reports, and tvariance analysis. TheThe management controller also also to divide his time between "sovereign" duties of the Finance Department (compliance, transfer pricing, etc.), and tsupport formanagement andoperational.
If the mission of the management controller remains generally stable, the profession has in fact significantly evolved thanks to digital technologyand requires increasing expertise in this area.
While we do not view economic performance as a foolproof method to be applied from start to finish, the use of digital processes and tools that allow management controllers to focus on high-value-added tasksshould be considered by all companies—not just multinationals or publicly traded firms. The range of options is vast, and adapting them to a company’s scale is no longer necessarily a constraint.
The widespread adoption of EPM (Enterprise Performance Management) and BI (Business Intelligence) solutions
EPM and BI solutions are directly relevant to management accounting. These technologies are slow to gain traction because they often require rewriting processes that have taken years to mature, but the gains in productivity and reliability justify such investments.
Here is a brief overview of the main solutions that have been implemented and their benefits.
The EPM
A simple definition of EPM is a tool used by the Finance department for financial close and budget execution. For financial close, an EPM allows you to define the tasks to be performed, track their progress, and facilitates collaboration. It is also a powerful tool for budget preparation or rolling forecasts, enabling you to structure the process, consolidate data, and finally load the final results into the BI tool.
Some examples of EPM solutions: Oracle EPM, Anaplan, SAP FC, IBM Planning Analytics…
BI Tools
BI reporting solutions offer two significant advantages.The first is the ability to automatically extract data from systems (ERP, CRM, etc.) and format it. Reporting solutions have expanded their native connections with third-party solutions, but API development is still necessary for others. Establishing connections with business applications requires the controller to think about data differently, particularly by having a basic understanding of databases. Collaboration with IT teams is essential in this area.
The second benefit lies in information sharing.Data becomes more accessible, and users gain greater autonomy by being able to analyze some of the data on their own.In this context, the management controller prepares reports tailored to specific audiences. These teams must develop a deeper understanding of user rights management to ensure that sensitive information can be accessed only by authorized individuals. Cooperation with IT teams must also be strengthened in this area.
According to the2019 EY CFO Survey, management controllers still spend 40% of their time collecting and processing data. Aswe have shown, there are numerous benefits for controllers from deploying an EPM and BI solution. They reduce the tedious and repetitive nature of the job, minimize the risk of errors caused by manual data handling, and foster collaboration. The time thus freed up allows the controller to focus on data analysis and provide management with more relevant information.
Some examples of BI solutions: QlikView, Microsoft Power BI, Tableau, Report One…
The Importance of Understanding Business Solutions and Business Process Management (BPM)
According to the 2019 EY CFO Survey, only 30% of managers are satisfied with the quality of the reports they receive. To improve the relevance of analyses, the management controller must ensure that the right information is captured early on, during the execution of transactional processes.
Let’s take the example of a customer service center that receives hundreds of calls per day. The management controller will find it highly beneficial to collaborate with the center’s management to ensure that every call is properly categorized in the system.This collaboration with management will be easier if the controller has a solid understanding of both the business process and the solution on which it relies. It’s worth noting that the CRM system must be thoroughly mastered, as the trend is to rely on it for an increasing share of the company’s critical functions, such as sales negotiations, customer service, and marketing.
And for all these tools to deliver the expected potential for gains, the management controller must be free from the burden of data reliability tasks—such as restatement, regeneration, and creation— making data governance a key issue!
In conclusion
The role of management controller has evolved significantly in the age of digital transformation, and it is essential for controllers to keep pace with innovations and possess a solid foundation of IT knowledge in order to remain management’s go-to resource for relevant, data-driven analyses.
Operational efficiency and cost reduction: the methodology
This is the second article in our feature on operational efficiency and cost reduction. Having posed the 10 key questions to be addressed, let's now look at the methodological approaches to be adopted.
The CFO's new strategic role
The role of the Chief Financial Officer (CFO) has changed radically in recent years. Historically perceived as the guardian of the company's finances, his role today extends to
Customer path - Processes - Risks & Internal Control: improving, securing and transforming the company
Due to a low level of maturity (in the best-case scenario) or a culture of territorial divisions and organizational silos (a situation that is, unfortunately, all too common), linking the themes of “Customer Journeys,” “Processes,” and
