Not all controlling tools have proven to be successful in practice. There are many reasons for this, and they can all be traced back to the controller.
Controllers make mistakes when implementing a tool. The textbooks generally recommend two procedures for capital budgeting: net present value analysis (where the investment is fixed) and real option analysis (where the investment can still be changed over its duration). However, in practice we see a different picture: Profit margins or costs, for example, are used instead of payment amounts, or payback periods are considered as equally important as net present values. Thus, it is not possible to obtain correct results, although this would be the expected outcome of using a tool.
Controllers do not succeed in explaining the tool sufficiently well to managers. This is a well-known problem – "methodology expert versus user". Bandwidth planning is a typical example of a method that only experts understand. If managers do not really grasp the results generated by the tool, they are less likely to use this method.
Controllers do not add new tools to the existing toolbox often enough. We can see from the example of value based management that cost accounting in German-speaking regions has always recorded the cost of equity capital as imputed costs, although the risk aspect was approached in a rather hands-on manner. When operating results are used for management control, there is only a small difference in value-oriented variables. The same is true for activity based costing, which is known in the German-speaking world as "Verrechnungssatzkalkulation”, or cost analysis. New tools do not always fare better than existing solutions.
Controllers do not link new tools to standard control processes often enough. If the Balanced Scorecard, for example, is not a permanent part of the control system – from the budget framework through to discussions in management meetings – it cannot work. The Federal Audit Office (Bundesrechnungshof) has criticized this in public authorities and administrations, where cost accounting was introduced without identifying any consequences as a result to its findings.
Controllers are not really interested in the conditions under which tools work. Controllers pay too little attention to whether or not their managers are able or willing to use the tools. Yet, if a manager does not really understand a tool, he will not use it. If a manager can manipulate a tool in his favor, he is likely to succumb to temptation and exploit the situation. In the first case, there is no payback on investment in the tool, while in the second case it may even be damaging to the company.
Controllers do not sufficiently differentiate between decision-making and coordination tools. There are two different types of tools. The first are more suited for decision-making, while the others serve to coordinate the various decision makers. The rule is that decision-making tools may be complex, whereas coordination tools may not. It is important that all stakeholders understand the latter group, however, it is sufficient for the experts to know how to use the decision-making tools. It is counterproductive to use complex decision-making tools for coordination purposes.