The changing role of the controller

From bean counter to business partner

When the conversation turns to the topic of company controlling, you might typically hear about the remarkable transformation that has taken place. In the past, it was common for controllers to be “bean counters”, now they support management in almost all aspects of leadership. This transformation can even be proven empirically. There are several reasons for this: better tools (e.g., ERP systems), pressure from increasingly overworked managers for more intensive and comprehensive support, normative pressure from universities and professional associations, and finally the greater skills and capabilities of the controllers themselves. As far as the profession of controlling is concerned, this is – at least in part – accompanied by a career progression from expert to manager.

If the professional controller associations, such as the ICV in German-speaking countries or CIMA in English-speaking regions, are to be believed, then controllers have achieved the role of business partner, acting on an equal standing with managers. At least that is what they are aiming for, according to the trend observed by the controllers’ guild. But aside from the normative theory of professional associations, you can also find such statements in the current textbooks.

There are typically three distinct stages of development: To start with, controllers’ activities are very number-oriented, providing performance metrics to ensure business transparency. Building on this foundation, the second stage involves the controller assuming the role of navigator or pilot to ensure that the company achieves its goals. The business partner is the third, and currently final, stage in which the spectrum of tasks carried out by controllers is significantly broader and the focus falls specifically on the collaboration between controllers and managers.

Controllers tend to feel responsible for financial metrics. Originally, these consisted primarily of costs and revenues, but nowadays they include figures from financial reporting (such as, for example, the EBIT) as well as cash amounts. These figures form the basis for steering a business. In the past, it was a challenge to provide the information required on time and at the necessary level of detail and accuracy. Yet controllers have mastered this challenge in most companies. IT has helped them enormously in the process, for example with upgraded ERP systems.  For the most part, they are now the "single source of truth" for financial metrics in companies. What is more, maintaining high quality data presents a constant challenge that is easily underestimated. Yet today this is no longer enough to fulfill controllers’ expectations.

The "controller as navigator" stage of development builds on a sound and well-functioning numerical basis. Controllers do not limit themselves to simply supplying figures, they also use them for management control purposes. They apply a basic cybernetic control system. They are concerned with carrying out regular periodic planning which compares actual monthly figures. By comparing the planned or target figures with the actual figures, controllers are able to determine whether the company is "on course" or whether concrete measures should be taken to achieve the agreed targets.

The role of navigator brings controllers into much closer contact with managers than they have as "number crunchers". Behavioral skills (communication, resolution ("backbone"), the ability to handle conflict or to mediate) are added to the list of requirements along with a knowledge of systems and accounting. Moreover, navigation requires a much broader knowledge of the business.

The term "business partner" comes from the USA and was originally used with regard to the development of roles in HR and IT. In the context of controllers, it is still somewhat vague – despite intensive discussions on the subject in recent years. On the one hand, it can be seen as broadening the spectrum of tasks carried out by the navigator. Controllers in the role of business partner ultimately support managers in all of their activities including, for example, incentive schemes, designing and carrying out strategic projects, and organizational tasks. The idea is to provide managers with a "comprehensive business service". It becomes clearer what is meant by the term if we consider the business partner to be a "co-pilot" (after all, co-pilots have a pilot’s license, too!)

On the other hand, the role of business partner can also be viewed as a specific way in which controllers carry out their work: more so than navigators, business partners have to be service-oriented and pro-active, and not wait for the manager to tell them to do so before they start looking at a problem. In the first version, in particular, far greater demands are made of controllers than in the role of navigator. Significantly more business knowledge is required (read more in our perspective "The big picture matters”). Controllers have to have a much broader scope; they must have a full range of management skills as well as the usual traditional financial expertise.

The conception that the role of business partner is a desirable goal for all controllers is nothing more than a normative statement put forward by the professional associations. In the HR and IT professions mentioned previously, the business partner role was seen as a solution to the huge problems that both disciplines were experiencing regarding their standing within the company. In breaking new ground, they were actually taking preemptive measures. The question is whether there is a similar situation in controlling, or whether there are valid reasons that can explain such a development. Indeed, there are.

There are three important reasons behind the transformation from "master of numbers" to navigator: (1) Transparency on its own will not usually make a huge impact. In many authorities, for example, ef-fective cost and performance accounting has been introduced in recent years. This resulted in high costs. However, it was of no use because nobody was interested in the information provided. The best data is not worth a thing if it is not used to address a particular issue or problem. Yet there is still a high demand for traditional financial figures to facilitate the (operational) management of businesses.  This information is essential for planning and control. So it makes sense to connect the two. (2) In less dynamic businesses, past figures are more than adequate for planning purposes. Controllers are very familiar with historical data, which makes it easy for them to get involved in the planning process. (3) Controllers had time to expand the scope of their activities because technological systems (wider availability of ERP systems) became easier to use and the number of controllers remained the same.

There are (at least) three arguments that account for the transformation from navigator to business partner: (1) Managers have a growing workload. Moreover, an increasingly dynamic environment puts them under even more pressure. They need someone to ease the burden and provide comprehen-sive support. (2) Today’s controllers benefit from better systems; user-friendly BI systems, self-service, and real-time are the buzzwords here. Such a lot is possible at the push of a button. (3) Controllers learned a huge amount in their role as navigator, starting with company controlling at the operational level and then progressing to other planning levels. They also gained experience in other management tasks, for example, by working with HR on incentive schemes. As a result, they have developed a broad knowledge base, giving them a very good understanding of the business as a whole. It is only a small step to becoming a business partner from here.

The transformation through three stages has placed increasingly high demands on controllers. The business partner level comprises a combination of two groups of requirements: On the one hand, there is the financial expert who knows his way around operational systems, is competent in both cost accounting and financial reporting, can do investment appraisals blindfold, and is able to answer any question at all concerning the tools. On the other hand, there are the requirements relating to management activities: This requires someone who is pro-active, has business ideas, questions the status quo, can implement new ideas, is able to manage teams, understands leadership in specific fields of activity (e.g., assigned projects), and can work independently.

Can controllers really maintain this balancing act? We have two answers to this question. (1) The position of "Controller" will be part of a manager’s typical career path. Even today, those employees aiming to reach general management must have spent time in a variety of functional areas, such as sales, pro-duction, and purchasing. They have to understand the different mindsets. Controlling is simply another one to add to the list. On that note, CEOs are often former CFOs who, in turn, were controllers before that. (2) Controlling will be divided. In addition to those colleagues who focus primarily on the role of business partner, there will be experts who possess the required depth of specialist knowledge in the long term. As far as controlling is concerned, they will act as partners to the business partners (see also our latest thinking on the "Controller as Business Partner".)

Professor Utz Schäffer & Professor Jürgen Weber

  • Weber, J., & Schäffer, U. (2013). Vom Erbsenzähler zum Business Partner. Weinheim: Wiley VHC.
  • Weber, J., & Schäffer, U. (2016). Einführung in das Controlling (15. ed.). Stuttgart: Schäffer-Poeschel.