Controllers as Business Partners - Controlling practice in German- - PowerPoint PPT Presentation

Controllers as Business Partners - Controlling practice in German- speaking countries Prof. Dr. Utz Schäffer Shanghai, October 2013

Most new German CEOs are former CFOs and Heads of Controlling Dr. Kurt Bock Dr. Ulf M. Schneider Why? Timothy Höttges Peter Terium Joe Kaeser Dr. Karl-Ludwig Kley Shanghai 2013 Prof. Dr. Utz Schäffer Slide 2

The traditional profile: controllers (and sometimes also CFOs) as scorekeepers Finance specialist Backward looking Reporting of ‘numbers’ Support for isolated decision making Shanghai 2013 Prof. Dr. Utz Schäffer Slide 3

… and the new profile: CFO and controller as business partners Finance specialist Strategic advisor Backward looking Future orientation & proactiveness Reporting of ‘numbers’ Holistic communication Support for isolated decision making Support for interdependent decision making Shanghai 2013 Prof. Dr. Utz Schäffer Slide 4

… and the new profile: CFO and controller as business partners CEO and Managers Controlling CFO and Controllers Judgment, Decision-making Transparency, methods enforcement, & responsibility Competence, third-party motivation perspective Source: Deyhle 1997; ICV and IGC (2012) Shanghai 2013 Prof. Dr. Utz Schäffer Slide 5

Controllers unburden, complement and constrain managers Management support by controllrs Unburden Complement & & Constrain Scorekeeper Business Partner Policeman Controllers help Controller as Controllers assure managers with economic goal congruence their work conscience p.ex. p.ex. p.ex. prepare analyze and monitor cost and monthly discuss strategic risks incurred reports investment Source: Weber/Schäffer (1999); ICV and IGC (2012) Shanghai 2013 Prof. Dr. Utz Schäffer Slide 6

Henkel as an example: controller roles have changed … ! Player Initiative Identify success factors, Set targets, steer projects ∆ Consultant Interpretation Compary and analyze # Information Information Provider Provide figures, Performance Measurement Proactive role understanding Source: Henkel (2012) Shanghai 2013 Prof. Dr. Utz Schäffer Slide 7

.. and Shared Service Centers play an increasingly important role Bratislava, Slovakia Bangalore, India • 900 employees • 160 employees (managed by • Geographical coverage: Accenture) Western Europe, Eastern Europe, MEA • Scope: 63 % Finance Manila, Philippines Interlomas, Mexico • 130 employees • 500 employees • Geographical coverage: • Geographical coverage: Asia-Pacific, North America, Latin America partially global • Scope: 100 % Finance • Scope: 70 % Finance Source: Henkel (2012) Shanghai 2013 Prof. Dr. Utz Schäffer Slide 8

IT-Trends also change the interaction between manager and controller Self-service • Direct access to data • Offers a new information channel for management Interaction with management • Access to data independent of Controlling Mobility • “Information democracy” • Data access from mobile devices, such as smartphones and tablet PCs • Increases the flexibility of managers Data availability for analyses • More and more up-to-date data Real-time • Improved support for decision-making • Provision of real-time data • Enables processing of more up-to-date and larger-volume data Shanghai 2013 Prof. Dr. Utz Schäffer Slide 9

Overall, the controller role is subject to an immense transformation Management support by controllers Unburden Complement & Constrain Scorekeeper Business Partner Policeman Controllers help Controller as Controllers assure managers with economic goal congruence their work conscience Automation; Dominant Shared Service; roles in the Outsourcing future Source: Weber/Schäffer (1999); ICV and IGC (2012) Shanghai 2013 Prof. Dr. Utz Schäffer Slide 10

The business partner needs a wide range of skills Analytical skills (“logic”) Steadfastness Communication (“backbone”) skills Business Partner Measurement & Business control systems knowledge knowledge Behavioral knowledge (psycho-”logic”) Source: ICV and IGC (2012) Shanghai 2013 Prof. Dr. Utz Schäffer Slide 11

Given the business partner profile of German CFOs and Heads of Controlling, it is not surprising that they tend to be the new CEOs Dr. Kurt Bock Dr. Ulf M. Schneider ! Timothy Höttges Peter Terium Joe Kaeser Dr. Karl-Ludwig Kley Shanghai 2013 Prof. Dr. Utz Schäffer Slide 12

Contact Prof. Dr. Utz Schäffer Director of the Institute of Management Accounting and Control (IMC), WHU – Otto Beisheim School of Management Member of the Board of Trustees of the International Controller Assocation (ICV), Germany Burgplatz 2, D-56179 Vallendar, Germany Tel.: +49 261 6509-700 Mail: utz.schaeffer@whu.edu http://www.whu.edu/controlling Shanghai 2013 Prof. Dr. Utz Schäffer Slide 13