What does the controller of the future look like?
Luc Dekimpe (MI&S) and Isabelle Van Iseghem (Mediagenix) on the future challenges
Artificial Intelligence, cloud solutions and ever more complicating systems are competing with the quest for finance to become a real business partner. In the near future, this tension might become a real challenge for professionals in the world of controlling. Luc Dekimpe (manager MI&S, TriFinance) and Isabelle Van Iseghem (CFO Mediagenix) are duelling about the future of controlling.
When discussing, it might be useful to first agree on terminology. Sometimes we have the feeling the controlling community does not agree on the definition of controlling as such. So, what exactly is it?
Isabelle Van Iseghem (Mediagenix): ‘Let’s get even one step further: what is finance? I see finance as a much broader discipline than just accounting and compliance. Rather, it is adding real added value to business. As such, I see two core elements in controlling: financial controlling, and business controlling. In essence, I am quite passionate about business controlling, as it is the ultimate link between finance and business and it is where we can contribute to the company’s strategy and the core of the activities. How far we go in the scope of controlling, mainly depends on the very nature of the company itself, and on the skills at hand within the finance team.’
Luc Dekimpe (MI&S, TriFinance): ‘To put it very simple: in the broadest sense, controlling is about everything within finance that is not transactional neither statutory related.’
Van Iseghem: ‘You are pointing at the difference between reactive and proactive finance.’
Dekimpe: ‘Exactly. Real controlling should be proactive, providing powerful insights in the different elements of the business, making smart use of the systems available.’
Van Iseghem: ‘Okay, but controlling should go much further than just mere business analysis. It is not only about analyzing number, but also about converting them into insightful information ultimately fueling decision making’
Dekimpe: ‘In my view, business analysis is the first layer of controlling. The second layer is dealing with insights and performance, cost and profit drivers. Controlling as provider and owner of the overall management reporting, which goes much further than just showing the figures. The third layer is about making everything work. The data and conceptual designs should be correct, and the systems used should function well. The controller is the central guardian overviewing all these layers.’
Van Iseghem: ‘Still, it feels like if you consider the systems to be the kernel of controlling. I look from a helicopter standpoint. Systems are a tool, not a goal.’
Dekimpe: ‘Yes, but we still need someone to safeguard the functioning of these systems.’
What is the difference between controlling and control?
Van Iseghem: ‘It’s not about controlling and checking but about adding value to the business.’
Dekimpe: ‘It’s about keeping an eye, rather than controlling.’
How would you describe the history of controlling so far?
Dekimpe: ‘About two decades ago, systems were stable, and the controller had a broad view on what was happening. But as time went on, systems became more and more technical, resulting in a rather diffuse IT-landscape, lacking any form of natural understanding. As a consequence, the controlling function evolved as well. Today, the controller must know the systems in use, more than ever before.’
Van Iseghem: ‘I agree with your view on the evolution, but I do not when saying that the controller should know the systems in detail. While evolving towards more and more specialization, I believe the controller should be a generalist more than ever before. When it comes to technical details, the controller should call for assistance from external parties. As systems get more customized, it makes no sense for the controller to be a specialist who knows all systems and applications. That becomes far too specialized.’
So, let’s focus on the near future now…
Dekimpe: ‘Well, the evolution I just sketched, will go on. Complexity growing, it will become more and more difficult to find this unique generalist who also has a profound knowledge of systems. Both will still be needed.’
Van Iseghem: ‘On top of that, there will pop up new challenges. Risk management is one of them. We still see an important difference in the focus areas of finance teams. Risk management may be a very important topic, but it still is not a standard on the agenda. The big leap about AI and the explosion of data has been taken, but risk management remains to be tackled. Finance is in pole position to have a holistic view on the company and to connect the dots and flag risks and opportunities.’
Dekimpe: ‘Yet, I believe the role of the controller will not fundamentally change, even when risk management becomes a new element on the agenda. As I said before: the systems and data flows will become more complex. So, the question is: will the controller of the future still be a generalist and at the same time quality manager of information systems, or will he become more of a generalist ‘pur sang’? And on top of that I also believe the soft skills will become even more important than they already are today.’
Van Iseghem: ‘Big companies will have the possibility to attract different specialists, such as a system specialist.’
Dekimpe: 'But in most of the companies this will not be possible considering their size’.
Isabel Van Iseghem (Mediagenix) and Luc Dekimpe (MI&S-TriFinance) (Photography (c) Thomas De Boever)
Will Artificial Intelligence have its impact on the role of controlling?
Van Iseghem: ‘Watson is great in predicting trends, based on history. Algorithms look at the past to predict the future. Never will AI validate. Fundamental business insights will remain the domain of humans. In case of disruption, computers will not be the ones to help you out. In these cases, you will need a human controller, believe me. Look at our video business: do you think Watson would have predicted the rise of video-on-demand a couple of years ago? The typical human added value is to draw strong and valuable business conclusions out of many data.’
Dekimpe: ‘I do fully agree. At critical moments, we will always need the help of humans. That holds for controlling as well.’
Will controlling remain a business partner, adding real value?
Dekimpe: ‘Today, many controllers are still too focused on business analysis. For controlling to be a real added business value, we need to find the right people. In my eyes, that will become a real critical issue.’
Van Iseghem: ‘Finance is evolving at a very slow pace. I dare to say that 8 out of 10 companies still do not translate controlling data into real business insight. So much to say there is still quite some room for improvement. Yet, I believe we are at a tipping point, with a new generation of CFO’s realizing the importance of being a key business partner and playing a pro-active role which is much broader than the key fundamentals of statutory compliance. We will need new skills, such as leadership, impact and influence, for finance to be taken serious. It will certainly have an important impact on the profiles of finance people.’
Dekimpe: ‘Frankly speaking, I am very curious about how the future of controlling will be taking shape.’
Van Iseghem: ‘I am positive by nature. The playing field is open. There is a lot of growth potential. This in turn will make finance a broad field, more interesting and sexier than ever before.’