The new role of management control in the face of artificial intelligence

The management control function appeared in the USA after the crisis of 1929 when industry was booming. Already, the objective was to provide a forward-looking vision of the company’s activity based on management indicators. In the banking sector, it appeared rather in the years 1970-1980. The idea was also to gain height in relation to exclusively countable quantities and therefore to analyze in a transverse way. As in many professions, the management controller started with Excel spreadsheets, but the emergence of data and the need to analyze a myriad of data also required more sophisticated tools. In this context, he had to invent everything that could not be inspired by industry: performance measurement, economic and financial analysis, strategic management, control of the IS and operational processes form some of his key functions. It was therefore necessary to obtain the most detailed possible set of indicators to understand the risk-taking and profitability of each customer segment. It is therefore the processing of data that constitutes the backbone of the system and its ability to interact with management.

The role of automation to help him on a daily basis from the 2000s : Automation has indeed accelerated to manage this mass of data and give them more free time to carry out tasks with greater added value. From the 2000s, the emergence of new IT solutions such as ERP and CRM have enriched the profession of management controller. Multidimensional data analysis (Essbase, TMI) and visualization (Business Objects) solutions have accelerated the ability to provide visibility and granularity. Excel remains the management controller’s main tool even if the data architecture has been rationalized thanks to data warehouses.

Since the mid-2010s, the The world of the Management Controller is undergoing a significant evolution thanks to:

  • the emergence of the cloud and therefore the storage of a large quantity of data,
  • increasing the power of the machines used to process this data,
  • the appearance of data consolidation and visualization software.

This made it possible to rationalize the presentations, simplify the architectures, free up time… These first contributions based on digitalization and the exploitation of mass data, made it possible to obtain a better understanding of the activity carried out. The challenge for the future will be to anticipate the future, based on the analysis of a large amount of information.

The pandemic and the associated digitalization have accelerated the transformation of the business and the deployment of AI

At the speed of the explosion of Big data and under the effect of the acceleration of the transformation of businesses due to the Covid and the acceleration of digitalization, the management controller also had to transform at the same speed. . This is an accelerating factor for the transformation, especially since in parallel to this, investments in AI have exploded during this period. In a certain way, therefore, we have a virtuous circle of transformation of the profession, the profession is transforming itself through the effects of globalization, including IT development, but today it can be proactive without undergoing the evolution of its ecosystem by opting for disruptive innovations that enrich its business without making it disappear.

The role of AI and the management controller of tomorrow

Freed from the most administrative tasks, the management controller will become a real business partner almost full time. The management controller is beginning to be equipped with new tools allowing:

  • improving the quality of data and reference systems;
  • modeling and simulation of income, costs, etc. using automatically detected drivers such as the number of loans granted, the number of savings products sold, etc.);
  • the implementation of automated controls to guarantee the consistency of the forecasting model.

Some of these machine learning modules are beginning to be present in certain solutions (Tagetik, SAP analytics Cloud, Anaplan, etc.) thus making it possible to bring business data closer to financial data and to be able to model multiple scenarios for the future. However, this undeniable computing power is not the culmination of AI but a further step in its direction.

In the end, this is how the Management Controller can now rely on the projections of these tools, even if it means completing or correcting them. AI is an important ally in this role but cannot replace humans at this stage. In this context, the Management Controller will have to find his place: freed from the aspects of data collection and their ordering, he would become the interpretation expert alongside a data analyst or scientist responsible for modeling and production of information based on algorithms. Implementing an AI approach within Management Control is a profound and structuring revolution. This development seems inevitable and it is necessary that the various organizations prepare for it now. AI remains a “machine”, and will react like a machine, without intuition or minimal hindsight over the next decade. Admittedly, at the start the algorithm is designed by a human, but if the AI ​​is ultimately called upon to develop this algorithm, who will vouch for the results?