January 18th 2018 IGC Board Member - Startseite 18th 2018 Prof. Dr. Klaus Möller University of...

Controlling Process Model 2.0

January 18th 2018

Prof. Dr. Klaus MöllerUniversity of St.GallenIGC Board Member

Dr. Klaus EiselmayerThomas Gackstatter M.A.Prof. Dr. Ronald GleichKai GrönkeDr. Jana Heimel*Dipl.-Betriebsw. Peter Löhnert*Prof. Dr. Heimo LosbichlerDr. Uwe Michel*Prof. Dr. Klaus MöllerDr. Rita Niedermayr-KruseDipl.-Kfm. Jens Ropers*Dr. Mike SchulzeMag. Hubert Tretter*Mag. Mirko Waniczek*Dipl.-Kfm. Andreas Zechmann

* part of the team of the first edition

Members of the working group:

2

Outlook: Applications and Use of Process Models3

From IGC Controlling Process Model 1.0 to 2.02

Introduction: The need for process models1

Agenda

3




Agenda

4

Initiatives of the International Group of Controlling (IGC)

▲ What competences do controllers have to possess to fulfill their tasks with highquality and to the satisfaction of their stakeholders?

▲ What does performance in controlling departments look likein the context of the IGC process model?

▲ How can controlling performance be measured and managed?

▲ What are relevant processes in controlling?What tasks stem from these processes?

▲ How can these processes efficiently be aligned and calibrated?

▲ What are the implications of adopting and employing IFRS for the controllingprofession and practice?

▲ What is the understanding of the controlling practice and what is the associatedterminology necessary?

▲ How should controllers strategically position themselves?

▲ What mandate and tasks follow from this positioning?

Controller missionstatement

(2002, 2013)

Controllingdictionary

(1998, 2005, 2010)

Controller and IFRS(2006)

Controllingprocess model

(2011)

Controllingprocess KPIs

(2012)

Controllingcompetence model

(2015)

Controllingprocess model 2.0

(2017)

▲ What are the process in controlling (and their changes compared to 2011)?

▲ How can these processes efficiently be aligned and calibrated?

5

Why to model?

Model = a simplified and idealized description of asystem (=group of items forming a unified whole)

à description function

à simplification function

à order function (system)

à reference

à design

à optimize

à compare / benchmark

à certify

6

APQC Framework - Manage Financial Resources

7

As partners of management controllers make a significantcontribution to the sustainable success of the organization.

Controllers …

1. design and accompany the management process of defining goals,planning and management control so that every decision maker can actin accordance with agreed objectives.

2. ensure the conscious preoccupation with the future and thus make itpossible to take advantage of opportunities and manage risks.

3. integrate an organization‘s goals and plans into a cohesive whole.4. develop and maintain all management control systems. They ensure the

quality of data and provide decision-relevant information.5. are the economic conscience and thus committed to the good of an

organization as a whole.

Controllers‘ Mission Statement (International Group of Controlling, 2013)

https://www.igc-controlling.org/services/controller-mission-statement.html

8

Company wide process model

Management processes

ControllingHuman

resourcemanagement

…Governance Qualitymanagement

Environmentalprotection,

health & safety

Support processes

Accounting Personneladministration …IT Legal services Communication

Core processes

Outboundlogistics

CustomerserviceProductionInbound

logisticsMarketingand sales

Project management

IGC (ed.), Controlling Prozessmodell 2.0, Freiburg 2011 / 2017

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Agenda

10

Controlling

Enhancement of Organisation, Processes,Instruments and Systems

Risk Management

Operative Planning and Budgeting

Cost Accounting

Management Reporting

Project and Investment Controlling

Strategic Planning

Forecasting

Function Controlling (Group, R&D,Production, Sales Controlling etc.)

Management Support

Controlling- Main processes

Settingobjectives Planning Control

IGC Process Model 1.0

IGC (ed.), Controlling Prozessmodell 2.0, Freiburg 2011

11

Influences on the Process Model

Consultants(e.g. H&P Finance Process Model)

Professional Organisations(e.g. APQC

Financial Management Model)

…

Digitization&

Analytics

IGC ControllingProcess Model 1.0

IGC CompetenceModel

Content

StructureScope

12

Controlling Process Model 2.0

Risk Controlling

Data Management

Business Partnering

Planning, Budgeting and Forecasting

Investment Controlling

Cost Accounting


Strategic Planning

Project Controlling

Func

tion

Con

trolli

ng(P

rodu

ctio

n-,S

ales

-,R

&D

-Con

trolli

nget

c.)

Further Developmentof Organisation, Process, Instruments and Systems

Analytics

Ana

lytic

s

Analytics


13

Main Changes from Process Model 1.0 towards 2.0

Controlling

Controlling - Main Processes

Strategic Planning

Operational Planning and Budgeting

Forecasting

Cost Accounting


Project and Investment Controlling

Risk Management

Function Controlling (Group, R&D,Production, Sales Controlling etc.)

Management Support

Enhancement of Organisation,Processes, Instruments and Systems

Main Modifications Process Model 2.0Process Model 1.0§Synthesis to „Planning,Budgeting and Forecasting“§Separation of Project andInvestment Controlling§New Process„Data Management“§Coloured differentiation ofprocesses§Function Controlling nowas 2nd dimension§Management controlprocess now circular

Involve§Analytics§ In/Outsourcing ofprocesses§Competences


Risk Controlling

Data Management

Business Partnering

Planning, Budgeting and Forecasting

Investment Controlling

Cost Accounting


Strategic Planning

Project Controlling

Func

tion

Con

trollin

g(P

rodu

ctio

n-,

Sal

es-,

R&

D-C

ontro

lling

etc.

)

Further Developmentof Organisation, Process, Instruments and Systems

Analytics

Ana

lytic

s

Analytics

14

Process start

n Data from relevantpreceding systems anddata to be recordedmanually

n Data on businesstransactions(qualitativeinformation)

Input

Event (e.g. monthlyaccounts) or ad-hocinquiry

Process end

n Standard reportsn Ad-hoc-reports, each

with „figures section“and „comment/analysissection“

n Dashboards

Output

Reports have beendiscussed withmanagement,countermeasures havebeen approved

Setting up the process

Managing reporting systems/data processes

Conducting data analysis and drawing up reports (figures section)

Drawing up reports (variance analysis, message and comments)

Conducting evaluation by management and initiating measures

Sub-processes


Level 2Level 3

Level 1

Level 4

Controlling

Main Process„Management Reporting“


15

Main Process„Management Reporting“

Manging reporting systems/dataprocesses


Controlling


Activities

n Establishing strategic orientation and control conceptn Deriving ratios and dimensions of analysisn Establishing reporting design, report recipients and

report folder structuresn Defining reporting process (responsibilities, data

flows, report dates)n Building up data modeln Defining report systems (IT-System) and its

functionalitiesn Continuously examining need for change

Activities

n Managing IT architecture for reporting systemsn Supporting systems, tools for reportingn Securing structured data process

(data collection, maintenance, processing, access,analysis, distribution)

n Maintaining data structuresn Maintaining interfaces to preceding systemsn Providing support for users in handling the systemn Implementing new structures in reportingn Removing errors in reports/reportingn Preparing new reports


Controlling


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Main Process “Data Management”

Process start

Input

Further Development ofbusiness and / orcontrolling, identifiedneeds for action fromquality control or regularprocess start date forcontinuous improvement

Process end

Output

Updated business datamodel, data base adaptedto control requirements


Building and maintaining data model content

Organising data flows and data storage

Determining necessary roles and positioning controller organisation

Establishing governance processes and improving continuously

Sub-processes

Securing material quality of the data

Data Management

Level 2Level 3

Level 1

Level 4

Controlling

n Requirements ofmanagement regardingprovision of information

n IT map and data flowsn Technical data modeln Data sources and

contentn Legal conditions

n Business data modeln Authorised data base

(single source of truth)n Documented data flowsn Established mechanisms

and measures forimproving and securingdata quality


17

Identification of processes for transfer to shared service centers

Knowledgeprocesses with little

interdependence

Specific knowledgeprocesses

Standardprocesses with

greatinterdependence

Transactionalprocesses

Standardisation highlow

Isol

abili

tyhi

ghlo

w

§ Volume/frequency§ Need for manual

intervention§ Knowledge required§ …

§ Interaction with corefunctions

§ Interaction with non-core functions

§ Intensity of contact withinternal clients

§ …

Evaluation criteriastandardisation

Evaluation criteriaIsolability

§ Cost accounting§ Variance analyses§ Costing application§ Reporting§ Analytics§ Sales prognoses§ …

Processes/activities incontrolling

Identification of processesor activities

Evaluation of activitiesaccording to the criteria

Allocation of activities tothe four categories

1 2 3

(A) (B)

(C) (D)


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Agenda

19

Application of the process model

Gleich, R., Schulze, M., Thiele, P., Adoption of Controlling Standards in Business Practice – Results of an International Study, in: Controlling, 30. ed. (2018), No. 1, pp. 38-41

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Applications and Use of Process Models

Why to model?

– deepen understanding

– increase comparability

– steer processes

– simplified communication

– measure performance

– benchmarking

– identify weaknesses

– starting point for process optimizations

– starting point for IT implementations

– task/process responsibility and role description

– …

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Prof. Dr. Klaus MöllerDirector Institute for Accounting, Controlling and AuditingChair of Controlling / Performance ManagementUniversity of St. GallenTigerbergstrasse 9CH-9000 St. GallenPhone +41 71 224 7406Fax +41 71 224 7020E-Mail [email protected] www.aca.unisg.ch

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January 18th 2018 IGC Board Member - Startseite 18th 2018 Prof. Dr. Klaus Möller University of...

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