FD Seminar Controlling

Results on BIMAC Survey

“Evolution in roles and responsibilities of the controller function”

September 11th – Mechelen

Reason behind the survey

The world around is changing; – Companies continue to evolve, based upon internal &

external changes– Requirements towards processes, skills, activities, rolls &

responsibilities & competences in Finance tend to change How do Controllers & Financial responsibles look at those evolutions?

– Do they recognise them?– Do they subscribe them? – Do they see further evolution in them?

Key questions of the survey

How do controllers divide the time

between the major activities?

What processes need to be improved ?

Soft skills ? Organizational Reporting lines ?

How much time is spent on the different

activities ?

Re-active versus forward looking ?

Hard skills ? Career development and rewarding ?

Activities Processes Skills Organisation

• On 31/08, we had 157 respondents in total

• All sectors are represented• 53% respondents of stock quoted companies • 53% respondents have TO > € 500 million• 11% respondents have TO < €100 million • 53 % have more then 20 BU’s or Branches

Who participated in the survey?

157 Respondents

Controllers (76%)

Internal Controllers (65%)

External Controllers (33%)

CFO’s (24%)

More information

If you would like to receive more detailed statistical information on the survey, you can

- visit www.controllers-connect.be- e-mail info@bimac.be- call 0032 486 04 52 55

ACTIVITIES

• Financial Reporting • Transactional Activities • Projects • Decision Support

Summary on observations

• Total population – Reporting and Decision

support are the major activities

– Transactional related activities are considered as minor

• CFO divides his time mainly between financial reporting and projects

• Controllers spent most time on Financial Reporting

• External controllers spent more time on projects than internal controllers

Detailed activities

• Strategic Planning • Budgeting • Cost Calculation • Management Accounting • Financial Accounting • Performance Measurement • Personnel related work• Transfer pricing • Standard Costing• Reporting • Improvement of company processes and activities • Process automation • Analytics

Total population

Please give, for every activity, a percentage on how much of your working

time you are spending on each of these activities during a typical working year.

0‐10%  10‐ 25%  25‐ 50%  50 % ‐ 75 %  75% 100% Strategic planning 73% 17% 7% 1% 1%

Budgeting 47% 37% 14% 1% 1%Cost calculation 86% 10% 1% 1% 1%

Management accounting 68% 23% 6% 1% 2%Financial accounting 81% 11% 4% 2% 3%

Performance measurement 77% 19% 3% 1% 1%Personnel related work 87% 9% 3% 0% 2%

Transfer pricing 95% 3% 1% 1% 1%Standard costing 91% 4% 2% 1% 1%

Reporting 33% 43% 16% 3% 4%Improvement of company processes & activities 77% 13% 7% 1% 2%

Process automation (CRP, BI, ERP) 86% 7% 3% 1% 3%Analytics 69% 23% 5% 1% 2%Other 91% 5% 2% 2% 1%

Summary on observations on detailed activities

• On the 13 activities, all tend to spent equally their time between 0 and 10% with the exception of Budgeting, Management Accounting and Reporting.

• For these activities most spent more than 10% and less than 50% of their time or between 22 and 110 days a year.

• All activities related to costing gets low attention.• CFOs : spent more time on strategic planning • Controllers spent significant more time on Budgeting, Management

Accounting and Reporting than CFOs . • External controllers spend more time on improvement of company

processes and analytics.

Outsourcing of traditional activities in benefit of focus on

specific activities ?

Variance between External and Internal Controller

‐25%

‐20%

‐15%

‐10%

‐5%

0%

5%

10%

15%

20%

10‐ 25% 

10‐ 25%

External  Internal 0‐10%  0‐10% 

Strategic planning 83% 75%Budgeting 57% 41%

Cost calculation 83% 78%Management accounting 65% 63%Financial accounting 70% 76%

Performance measurement 78% 69%Personnel related work 78% 84%

Transfer pricing 91% 92%Standard costing 91% 80%

Reporting 39% 25%Improvement of company processes & activities 65% 78%

Process automation (CRP, BI, ERP) 83% 84%Analytics 57% 63%

‐15%

‐10%

‐5%

0%

5%

10%

15%

20%

0‐10% 

Observations for the future

• Strategic Planning, Performance Measurement, improvement of processes and automation will get more attention.

• Budgeting, HR related work and reporting will get less attention.

• Shift in activities from internal to external controllers (budget and HR work).

Observations for the future

Controller  CFO 

Strategic planning 15% 14%Budgeting ‐5% ‐14%

Product cost calculation 4% ‐5%

Management accounting 4% 5%Financial accounting 3% 0%Performance measurement 16% 32%

Personnel related work 0% ‐14%Transfer pricing 4% 5%Standard costing 1% 0%Reporting ‐6% ‐9%Improvement of processes  19% 36%Process automation (CRP, BI, ERP) 20% 14%Analytics 4% 9%Other ‐1% 0%

‐20%

‐10%

0%

10%

20%

30%

40%

Change in focus in 3 years 

Controller CFO

FOCUS ON PROCESSES

4%

24%

47%

25%

Optimatisation of Finance Processes 

0% ‐ 15 % 15% ‐ 35 % 35 % ‐ 50% > 50%

Observations on focus of processes

• +/- 50% of the population believes that processes are optimized for 35 to 50%!

6%

22%

50%

22%

Optimatisation of Finance Processes 

0% ‐ 15 % 15% ‐ 35 % 35 % ‐ 50% > 50%

Total population

Total CFO group

Total controller group

0% ‐15 % 

15% ‐ 35 %

35 % ‐50%  > 50% 

Optimatisation of Finance Processes  4% 24% 46% 25%

Observations on focus of processes

• Deployment of strategy needs to be improved • The CFO wants

– to improve reliability of planning & forecasts– on-time MI availability – reduction of budget and forecast cycle time

• Controller wants : – focus on advanced automation– improvement of processes and centralisation

• External controllers will be hired for deployment of strategy and centralisation

• Clear shift to use more pro-active information besides re-active information

In your opinion, which of the following processes does your organization need to improve over the

next 3 years?

‐30%

‐20%

‐10%

0%

10%

20%

30%

40%

50%

60%

70%

Advanced automation Efficiency in process(O2C/ P2P /R2R / F2I)

MI on time availability Strong centralisation Reduce cycle timebudget / forecast

Increase reliability opfbudget / forecast

Deployment ofstrategy

What needs to be improved in the coming 3 years

Controllers CFO Varriance in opinion

21

323

In your opinion, which of the following processes does your organization need to

improve over the next 3 years?

‐30%

‐20%

‐10%

0%

10%

20%

30%

40%

50%

60%

70%

Advancedautomation

Efficiency inprocess (O2C/ P2P

/R2R / F2I)

MI on timeavailability

Strongcentralisation

Reduce cycle timebudget / forecast

Increase reliabilityopf budget /forecast

Deployment ofstrategy

What needs to be improved in the coming 3 years

Internal External Variance in opinion

How often (%) are you relying on reactive management

information and how often do you come up with pro-active information?

0% 20% 40% 60% 80% 100%

Pro‐active now

Pro‐active 3 years <

Re‐active now

Re‐active 3 years <

Evolution in usage of pro‐active versus re‐active MI 

0 % ‐ 25 % 25% ‐ 50% 50% ‐ 75% 75% ‐ 100%

‐22%

18%

4% 1%

‐5%

6%

18%

‐20%

0 % ‐ 25 %  25% ‐ 50%  50% ‐ 75%  75% ‐ 100% 

Evolution Now compared to 3 years ago 

Pro‐active Re‐active

CLEAR SHIFT TO USE MORE PRO-ACTIVE INFORMATION BESIDES RE-ACTIVE INFORMATION

SKILLS

Soft Skills

• Creativity • Solve Problems • Communication • Teamwork • Flexibility • Responsibility • Global Picture • Convince• Negotiation

Observations on soft skills

• Clear evolution in importance of soft skills

• Dominant soft skills recognized by CFO & controllers : – Communication – Teamwork – Solve problems – Knowing the global picture – Responsibility

• Less dominant soft skills – Creativity – Power to convince – Negotiation

For the CFO responsibilityand solvingproblems are most important

Major > 3Y ‐8%‐7%6%‐2%‐9%‐10%4%‐3%‐2%

Responsibility Global Picture Convince 

Negotiation 

Creativity Solve Problems Communication 

Teamwork Flexibility For the controller

communicationand globalpicture are most important

Hard skills

• Cost Accounting • Accounting Standards (IFRS, IAS, …) • Management Reporting • Transfer Pricing • Planning, budgeting & forecasting • Organizational structure • Performance Management & KPI reporting • Strategy definition & Balanced score carding • Legal • Modelling (statistical forecasting & trend analysis)

Observations on hard skills

• Major required hard skills for the future : – Strategy Definition & Balanced Scorecard – Performance Measurement & KPI’s – Modelling (statistical forecasting & trend analysis)

• Minor required skills for the future : – Accounting standards & IFRS – Cost accounting – Legal

Evolution in importance of major skills in 6 years

Major  < 3 years  Now  > 3 years 

Cost accounting 64% 51% 54%

Accounting standards (IFRS & different GAAPS) 40% 36% 43%

Management reporting 58% 81% 83%

Transfer pricing 15% 32% 38%

Planning, budgeting & forecasting 58% 88% 86%

Organisation structuring (profit center, cost center structures) 40% 61% 61%

Performance Management & KPI's 34% 70% 87%

Strategy definition & Balanced Scorecard 20% 50% 77%

Legal 13% 18% 27%

Modelling (statistical forecasting & trend analysis) 21% 48% 70%

Total population

CFO’s & Controllers share the same opinion

Organization, Ambition and Rewarding

Organization

Matrix

Direct line

Dotted Line

Observations on Organization

• Different view between CFO and Controller• CFO wants direct line • Controllers

– matrix organization becomes more important – matrix organization with direct line to CFO prevails

0%

10%

20%

30%

40%

50%

60%

< 3 years Contr. now Contr. < 3 years CFO now  CFO

Solid line reporting to the CFO Matrix structure: dotted line reporting to the CFO Matrix structure: direct line reporting to the CFO Other

Observations on Organization

• Collaboration with Operations, Sales & Marketing becomes more important

• Collaboration with internal audit and legal department seems less important

• Collaboration with IT is important but less than operations and sales and marketing

• CFO has stronger view than controller but both confirm same trend

0%

20%

40%

60%

80%

Operations IT Sales & Marketing HR Legal & Risk Inernal Audit

Overview collaboration witrh other departments in 3 years

Minor Normal Major

Ambition

Observations on Ambition

• 1 on 3 controllers make it to FD / CFO

• To be successful two criteria seems to be dominant– Being a business partner – Translate strategy into

execution – Compliance with regulation is

less conceived as critical success factor for career development

Rewarding

Observations on Rewarding

• 89 % expects to earn minimum € 3,500 gross salary up to more than €6,500

• Majority of CFO expects gross salary > € 6,500 • Majority of controllers expect to earn between € 3,500 - € 6,500

‐11%

‐16%

3%

4%

19%

‐20% ‐15% ‐10% ‐5% 0% 5% 10% 15% 20% 25%

< 2500 

2500 ‐ 3500

3500 ‐ 5000

5000 ‐6500

> 6500

Exepcted Evolution of Salary in 6 years 

Thank you for your attention

BIMAC vzwThe Belgian Institute of Management Accountants and

Controllers

www.controllers-connect.be