Will Information Technology Make Controlling Redundant?

Current trends and challenges for controllers

It is inconceivable to think of modern controlling without IT. The introduction of ERP systems, for example, considerably unburdened controllers and enabled them to develop into business partners. The next revolution is now well under way, defined by such buzzwords as “self service”, “mobility”, and “real-time processing”. What effect are these developments having on controlling? Will controllers be the big beneficiaries of a collaboration between controlling and IT, or should they be cautious? Let us guide you through it.

Information technology has always played a central role in controlling. The introduction of ERP systems, for example, unburdened controllers and let them develop into business partners. The latest innovations in IT could have a similar positive effect. Huge quantities of data, ranging from spreadsheets to film, are available as a basis for making critical management decisions. The potential of social media as well as real-time access to company data from anywhere in the world are other significant developments affecting both individuals and organizations.

Interestingly, organizations are still a long way from implementing these trends. In September 2014, the 2nd WHU Controller Panel study on "The Future of Controlling" showed that real-time mobile access to detailed information still remains an exception rather than the norm for managers. However, expectations are that it will be available in more than one in three companies by 2019. Three-quarters of controllers consider mobile data access to be possible by that date; almost 60 percent expect their managers to have real-time data access. Clearly, these trends will have repercussions for controllers and their responsibilities. The following three scenarios are conceivable:.

Fig. 1: How managers access their data over time

Fig. 1: How managers access their data over time
Fig. 1: How managers access their data over time

What is the best-case scenario? Thanks to their consistent exposure to figures, managers acquire considerable business expertise and are thus in a position to give their controllers tasks that demand in-depth analysis. Controllers act as competent business partners, and not just as number crunchers. This frees them from the more tedious tasks, allowing them to focus on value-added activities. The quality of their work and advice increases immensely as a result.

In the worst-case scenario, controllers lose their influence over managers, although the managers are unable to put their new capabilities to good use. Managers might then resort to impulsive, heedless action. Each new “change” results in an immediate request for information – information from the operative entity that entered the data, not from controlling. When data is available in real-time, the information filtering and quality assurance functions that controllers currently carry out can be bypassed. Furthermore, managers risk being overwhelmed by the diversity of reporting options and might ultimately submit the wrong requests to the system, or incorrectly interpret the supplied information. The absence of the controllers’ valuable influence is keenly felt here and, moreover, the controllers are no longer informed about which data the managers requested and analyzed, and when.

If managers learn to handle the new reporting options effectively in a short period of time, they will no longer need controllers for many of their previous tasks. Controllers lose their authority over business data to the managers. The managers, in turn, no longer need substantive support, but merely technical support from the IT department. IT then assumes the support role previously filled by controllers. Controllers, robbed of their information superiority and ousted from their traditional role by IT, face a less optimistic future.

According to the findings of the WHU Controller Panel, current IT developments rank top of the list of future trends in controlling – and for good reason. Despite the opportunities afforded, the ongoing development of IT poses a considerable risk for controllers. Keeping up with rapid modernization processes is the only way for them to progress without losing access to IT. We envisage the following agenda for controllers:

  • Standardization of master data: Business intelligence systems, which offer mobile access and a wide range of analysis options based on up-to-date data, make high demands on data quality. The first step toward achieving this is to ensure the consistency and standardization of master data. In large organizations, this process can take years rather than months.
  • Integration of IT systems: You will also need to support the integration of the largely heterogeneous IT systems. Again, this will be a major project for many organizations. 
  • Data integration: You must make progress in the area of data integration – it is important that data are only stored once, wherever possible. 
  • Rights management: Finally, you will have to clarify all issues in the area of rights management, which raises new and urgent questions with regard to self service options.

Professor Utz Schäffer & Professor Jürgen Weber

  • Weber, J., Gschmack, S., Tretbar, T., & Wiegmann, L. (2013). IT-Trends und ihre Auswirkungen auf Management und Controlling. Advanced Controlling: Vol. 87. Weinheim: Wiley.
  • Weber, J., Strauß, E., & Spittler, S. (2012): Controlling & IT: Wie Trends und Herausforderungen der IT die Controllingfunktion verändern. Zeitschrift für Controlling & Management, 56(2), 105-109.
  • Weber, J. (2013): Controlling & lT – oder: Wie wird die schöne neue IT-Welt das Controlling verändern? Controller Magazin, 38(2), 26f.