Cm spezial 1012


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Cm spezial 1012

  1. 1. September 2012 | Issue 9 | 01450-5905 | CONTROLLER ® spezial Agility for a changing landscapeProf. Dr. Heimo Losbichler, Chairman of the IGC: Poland: 6th International Controller CongressMeasuring the performance in Poznań successfulof controllers and controlling processes Slovenia: Controlling spreads across the Balkans
  2. 2. Jetzt Gratis-Exemplar anfordern!Mit dem Controller Magazin werden Sie den wachsenden Anforderungenim Controlling heute und in Zukunft gerecht. Versprochen.Das Controller Magazin ist die auflagenstärkste Fachzeitschrift für Controller in Deutschland und Mitgliederzeitschriftdes Internationalen Controller Verein e.V. Sie erfahren alle zwei Monate, welche Trends und Entwicklungen Controllerbewegen – aufbereitet mit praktischen Beispielen für eine erfolgreiche Umsetzung im Job.Inhalte:> Topaktuelle Fachbeiträge von Controlling-Experten> Erfolgsbeispiele, Erfahrungsberichte & Handlungsempfehlungen für die tägliche Arbeit> Zahlreiche Tipps für Beruf, Karriere und Weiterbildung> NEU Controller Magazin e-Paper: Online-Archiv mit allen Ausgaben exklusiv für
  3. 3. Contents 2 IGC and ICV In November 2011, 63 participants from 14 Measuring the performance countries took part at the 2nd ICV Management Editorial of controllers and controlling processes Conference in Frankfurt/Main: representatives 4 Poland of the board, leaders of the working groups, regional delegates and the employees of the 6th International Controller Congress ICV office. They met to discuss the development in Poznań of the ICV strategy and the future focuses. The 5 Poland most important questions were how to make A team to test the stadium: the International Controller Association more EURO 2012 Poland/Ukraine! “international”, how to use PR instruments to 6 Croatia found and support more ICV working groups all over the world, and how to make the work of Mission: The development of the offices in Germany and Poland even more Croatian controlling efficient. 8 Hungary More successful controllers: Since that time the ICV has made further pro- Psychology of decision making gress in internationalization. You’ll read here in10 S lovenia our magazine for example about a very suc- cessful international conference in Poznań (PL), Controlling spreads across the former you’ll learn details of our latest steps in South Yugoslavia countries. A necessity? Eastern Europe and we inform about forthcom-12 Spain ing working group launches in several countries. Crisis demands representation of the controlling Sure, a look at the global map demonstrates a13 Mixed info huge internationalization field to be developed as well as an enormous potential for the ICV. Kaliningrad, Italy, Bosnia-Herzegovina You’ll read in our magazine reports about the14 China controlling in interesting countries like China and Sales performance steering Kazakhstan. I’m firmly convinced that our next in automotive business issues of “Controlling International” will present16 Kazakhstan more new ICV working groups all over the world. Kazakhstan’s model of controlling The ICV PR team makes great efforts to sup-19 Controller Akademie port the growing number of “Non-German- Record year in mileages travelled speaking” working groups in our association: a20 Working groups in Europe monthly English bulletin – exclusively published for members – was created, our free English e-newsletter appears every four weeks and pro- fessional articles, main documents are continu-Imprint ously translated and published on the (English)Controller Magazin Spezial is a special editionof the trade journal Controller Magazin and ICV website. I’d like to use my editorial to thankappears ONCE a year. all colleagues abroad who’ve sent us informa-ISSN 1616-0495, order no. 5001, Postal distribution: E 12688Editor Controller Magazin, Dr. Klaus Eiselmayer tion from their countries: Your voluntary supportPublisher Verlag für ControllingWissen AG helps us to activate a growing international con- Münchner Str. 10, 82237 Wörthsee Tel. +49 (0)800 72 34 269 | Fax +49 (0)800 50 50 445 trolling community., www.controllerwissen.deRegistered in the commercial register Freiburg i.Br. HRB 471840Board of directors Dr. Klaus Eiselmayer, Dipl.-BW Andreas Meya We invite you, dear readers, and your col-Advertising Haufe-Lexware GmbH Co. KG, Im Kreuz 9, leagues, to join our family!97076 Würzburg, www.haufe-lexware.comAdvertising sales Kathrin Sauer, Tel. +49 (0)931 2791541,Fax: +49 (0)931 2791477 E-mail: kathrin.sauer@haufe-lexware.deAdvertising coordination Christine Wolz, Tel. +49 (0)931 2791472,Fax: +49 (0)931 2791477 E-mail: christine.wolz@haufe-lexware.deAdvertising manager Bernd Junker, Tel. +49 (0)931 2791556E-mail: bernd.junker@haufe-lexware.comEditor Hans-Peter Sander, Hans-Peter SanderDesign deyhledesign Werbeagentur GmbH, Gauting ICV Press Officerwww.deyhledesign.dePicture credits Titel Thinkstock, Content ThinkstockPrinter Bosch-Druck GmbH, Ergolding 1
  4. 4. IGC and ICV Measuring the performance of controllers and controlling processes Metrics, scorecards, and key performance indicators are the daily business of controllers. However, critics argue that controllers measure everything but their own performance. In today’s challenging economic environment, companies increasingly question the efficiency and effectiveness of their controlling activities. IGC’s framework of controlling process metrics helps controllers to measure controlling activities precisely and close the embarrassing lack of controlling KPIs. Prof. Dr. Heimo Losbichler The aim of the International Group of Controlling print” for the basic structure and design of con- Chairman of the International Group of (IGC) is to promote the professional image of trolling activities, the controlling process metrics Controlling IGC controllers and to establish an internationally ac- provide the information required to continuously and cepted controlling philosophy that perceives con- improve these processes. Their internal use il- Vice Chairman of the International Controller trolling as the managerial process of target set- lustrates the performance over time and indicates Association ICV ting, planning and control. IGC’s publications, in performance changes. Their external use allows particular the controller dictionary, the controller’s the performance of controlling processes to be mission statement, the controlling pro- compared relative to other companies cess model and the 1086 IGC DINSPEC A framework or to best in class benchmarks. created an internationally recognized of metrics for foundation for effective controllership measuring the IGC’s controlling process model and controlling. breaks down the business process performance “controlling” (level 1) into ten main In 2010, IGC published the “IGC Con- of controlling controlling processes (level 2): stra- trolling Process Model” which provides processes. tegic planning, operational planning a comprehensive framework for the ef- / budgeting, forecasting, manage- fective design of controlling activities. It aligns ment reporting, cost accounting, performance objectives, contents, inputs and outcome of the and profitability analysis, controlling of projects top ten controlling activities. Thus, it serves as a and investments, risk management, controlling of guideline for the effective collaboration of manag- business functions, management partnering and ers and controllers, within the managerial process advisory and the development of the organiza- of target setting, planning and control. tion, processes, tools and systems. For these main processes a framework of financial and This year, IGC is proud to present the logical next non-financial metrics is proposed which allows step of the controlling process model: a frame- the performance of each process to be evalu- work of metrics for measuring the performance of ated in the dimensions of quality, time and cost. controlling processes. The proposed set of met- IGC’s framework of metrics provides both a set rics is the first integrated approach for evaluating of top controlling KPIs and a scorecard for all ten the performance of controlling processes. While processes. The metrics are closely aligned to the the controlling process model serves as a “blue- process’ objectives. 2 CONTROLLER Spezial | Controlling International
  5. 5. Process Objective KPI Development of the organization, Continuous, aligned, Number of processes being improved processes, tools and systems and timely improvement over the last two years Strategic planning Strategies which are being executed Number of strategic initiatives being executed as a percentage of the total number of initiatives included in the strategic plan Operational planning/budgeting Short planning cycle Days from start to the board’s approval Forecasting Accurate forecasts Variance between EBIT forecasted and actual EBIT as a percentage Management consulting Controllers as management partner Time spent for management advisory as a and advisory percentage of controller’s total working timeFigure 1: The structure of IGC’s controlling process metrics Figure 2: Selected top KPIs for measuring controlling processesAccording to IGC’s philosophy, controlling is a trolling processes no longer has to be estimated,shared responsibility of managers and control- rather they can finally be measured precisely. Thislers. Thus, bad controlling performance cannot is particularly important in an economic environ-be directly linked to controllers’ performance. For ment in which companies increasingly criticallyexample if companies spend too much time on question the value of their controlling activities.preparing the budget, it could be due to several The controller model of the IGC states: “Control-reasons: the company’s complex matrix organi- lers ensure the transparency of a company’szation, indecisive managers, a lack of IT support financial performance, its business processesor a wrong design of the budgeting process. and its strategy and thus contribute to higherControlling KPIs can indicate good or bad perfor- economic effectiveness”. Finally, this is also truemance, but they cannot replace the need to care- for the controlling processes themselves.fully analyze the drivers of performance. However,the proposed framework differentiates betweenprocesses that are primarily driven by managers(e.g. strategic planning), processes that are pri-marily “owned” by controllers (e.g. cost account-ing) and processes that cannot be assigned toeither managers or controllers.The IGC controlling process metrics are designedas a general framework appropriate for organiza-tions of any industry and size. The frameworkprovides a large set of metrics. Practitioners canselect these metrics based on the specific re-quirements they have. However, the frameworkgives guidance proposing IGC-recommendedmetrics.Using the IGC framework of controlling processmetrics, the efficiency and effectiveness of con- 3
  6. 6. 6th International Controller CongressPOLAND in Poznań At the annual congress of the ICV (April 26–27, 2012) there were 150 controllers, CFOs and CEOs who value the international development and relevance of the cooperation between controllers and managers. The guests could compare controlling approaches in Poland, Estonia, Spain, Germany, Slovenia, Serbia and the USA. The Vice-Minister of Finance Mirosław Sekuła Controlling solutions from abroad opened the congress with a presentation on Prof. Toomas Haldma from University of Tartu, Es- the public finance sector in Poland. Next the tonia, emphasized the importance of objective in- special guest Sławomir Lachowski proved formation in company management. Dragica Erčulj, that “The Road is More Important than the Head of the CRMT Institute in Slovenia and ICV Re- Goal”. gional Delegate South-East Europe, talked about delegating tasks. Lothar Kuhls, owner of WEGe The leitmotif of the speech of Małgorzata Pod- Managementberatung GmbH and ICV Regional skarbi, Coordinator for Investment Controlling in Delegate Germany North, showed how to prepare Volkswagen Poznań Sp. z o.o., was that a good a firm for change management. And Ulrich Müller firm has more entrepreneurs in the enterprise – Bosom, Director Finance Controlling in Frape Dr. Adrianna Lewandowska that’s why there is an educational program in VW. Behrw S.A. and leader of the ICV Working Group Business Discovery Karol Sikora, Head of Department for Managerial Spain, noticed increasing demand for controllers ICV Board Member Information, Poczta Polska S.A., presented how with three languages, feeling comfortable in am- activity based costing and time driven concept is ulticultural environment and knowing international used in creating management information. Dur- accounting standards such as IFRS or USGAAP. ing his speech on challenges during the crisis, Andrzej Derkowski, Manager of Controlling Of- As every year the congress was a great opportu- fice in ACCEDIT Sp. z o.o., diagnosed the most nity to answer some notorious questions and of important factors in the market battle. In control- course to get to know the controller community. A ler’s work the most relevant is risk management new way to share the knowledge and experience and scenario planning, said Tomasz Kochanek, at this congress was a panel discussion. PwC Manager. Michał Plit, Manager of Opera- tional Controlling, and Jakub Tatak, Manager 2013 also completely in English of Planning and Controlling Department, both In 2013 the 7th International Controller Congress from LUX MED Group, presented how their com- in Poznań takes place on April 18–19. One of the pany changed after introducing a controlling sys- speakers will be Prof. Dr. Peter Horvath – managing tem. Stefan Olech, Coordinator of the Controlling director of the International Performance Research Academy ODiTK, emphasized the role of man- Institute in Stuttgart, Leader of the ICV Think Tank agement through objectives and the coordination “Ideenwerkstatt”. He will convince the guests that of temporary goals. Jerzy Szkwarek, Business “ecologically” doesn’t mean “ineffective”. All pres- Consultant, talked about the role of controller in entations will be simultaneously interpreted into building an integrated value chain from the man- English so that all our guests can follow. We invite ager’s perspective. people from all over Europe, controllers, CFOs and CEOs and all who are interested in the topic to join us at our international conference in Poznań. 4 CONTROLLER Spezial | Controlling International
  7. 7. A team to test the stadium EURO 2012 Poland/Ukraine You wouldn’t think that the players that tested the pitch in Gdańsk before UEFA Euro 2012 were controllers. On March 28–29, 2012, the Work Group Gdańsk, Poland had its training camp at PGE Arena Gdańsk – a stadium where Italy, Spain, Ireland, Croatia, Greece and Germany played during the European Football Championships in June. Most of the players called up to the ICV squad topic of this part of the training was the control- met on Thursday – the first day of the camp – ler’s role and responsibility. The coach showed it to integrate with the rest of the team over din- using the example of the team that he still plays in ner. The camp gathered a record number of every day. He taught his players some elements players – 18 people also from new clubs such of the strategic and operational game he uses in as SKOK Stefczyka, Energa Oświetlenie or his work. He explained some indicators applied DomData. in the club such as 40/20/20, flowthrough 30, 80/20. They were very interesting aspects for As professionals we started the training very early other participants to think about and then use in on Friday. We wanted to be in the stadium on time the game in the company. so that we could start the training without a delay.Robert PanufnikHead of the Work Group After getting to know some tactical patterns pre-Gdańsk sented by the coach, the team could make the visit of the whole stadium. In the second part of the day our team had some logistical problems. Our guest coach didn’t come. We didn’t lose heart though and we discussed ef- fective controlling systems among ourselves. The players shared their experience gained in their clubs and presented trusted solutions of the as- The new stadium in Gdańsk built especially for UEFA pects that raised doubts. EURO 2012 that the controllers tested The reaction of one of the players (buttom left) During the first part of the day we had the presen- on the news that there will be another ICV train- tation of our first coach Piotr Rożak from the cor- ing camp reflects the positive summary of the porate club Stokvis Tapes Polska Sp. z o.o. The meeting. 5
  8. 8. Mission: The development ofCroatia Croatian controlling In Croatian companies, controlling is most often taken as a discreet, administrative, static and advisory function, and controllers are almost always only analysts digging through billions of data in search of the right information that will (controllers believe) be put to good use by someone from management. There is still a distance between controllers to find dead capital, to detect the unprofitable and managers, who still seem to insist on business segments. The path is not simple, but in “their own way”, and quite often actually re- the long run it is the only possible, right track. Ac- fuse controlling advice, even when it’s obvious cordingly, the mission of the Croatian ICV working that what they so desperately need is “the group is the development of Croatian controlling. voice of reason”. The immense possibilities of controlling available to improve the manage- Croatian controlling is still in embryo. However, ment of resources and assets, to protect com- there is also a group of enthusiasts who simply re- panies from poor investments, and (why not fuse to accept waiting for years for something seri- say it) as the first line of defense against theft ous to happen in controlling in Croatia. This is how in Croatian companies still seem not to be as the joint involvement of controllers gathered in the Jasmina Ocko Controlling Consultant evident as possible. Croatian ICV working group should and can help Kognosko, Croatia in accomplishing the above mission in two ways. Until the benefits of controlling become absolutely clear to everyone, we will continue to helplessly CroatiAn controlling does exist watch the further growth of unemployment, the First, Croatian controlling must be an integral part continuing drop in GDP, the disinterest of foreign of the European controlling scene. Although still in investors or some new fiscal and monetary policy embryo, Croatian controlling does exist, and I am measure – of any new government proud that, with respect to that, we are that doesn’t tackle the old and real Croatia is in already part of Europe. We are as ac- causes of problems. This is why the need of an entire tive as any other working group. The development of Croatian controlling army of quality main emphasis of our work is learning is an extremely important factor in and transferring, or better yet sharing helping the Croatian economy grow. controllers knowledge. We also have the oppor- Quality controlling prevents wasting for Croatian tunity to learn abroad. Considering money, unveils irregularities at the ear- economy. that our controlling history is short, ly stages, and fights for survival using this is an ideal way to learn from those the only tool it possesses – information and the who already have a tradition in controlling. Moreo- economic logic of rationality. ver, I consider the fact that Croatia joined the ICV useful for yet another reason. Many managers or Croatia is in need of an entire army of quality company owners in Croatia still have doubts about controllers for the Croatian economy to get on the whether controlling is useful or not, and whether right track and to start moving ahead as soon as they need it at all or not. For them to completely possible. Controlling is there to help achieve the accept controlling, it is necessary to prove to them best results using the least resources. Controlling that controlling is a self-understood given in all the tools are necessary for Croatian companies to find developed economies of Europe and, naturally, ways of earning more with the existing resources, the world. The sheer size of the ICV shows just 6 CONTROLLER Spezial | Controlling International
  9. 9. how strong it is, and the fact that the leaders of this pertise at in-house trainings and workshops, aslarge international controlling organization are in well as through practice which has already beenthe highest positions of multinational corporations well developed through the years. However, con-speaks for itself. In developed western countries, trollers working in Croatian companies, unfor-controlling is a career (step), meaning that control- tunately, have little choice of training and devel-ling always and regularly prepares young forces to opment. Moreover, they seem not to be takingbecome future CEOs and board members. This advantage of what’s available to them. Which isis only logical because after a few years of work why homogenizing the group as much as possiblecontrollers have the unique opportunity to under- is the main task of our ICV workshops, so that ulti-stand in great detail the processes of a company mately only those who intend to give their best joinbetter than anyone else in the company. If this as members. We would like to see our memberspractice – which is so standard in the West – were research, read, learn, find their own solutions onalso recognized in and by Croatian companies, their own and, of course, share their knowledgethe function of controlling would soon be recog- and insight with others – even under less than per-nized for what it is and what it can offer. fect conditions. Through our gatherings we would like to raise our members’ awareness of the factLifelong learning of different that, besides controlling, lifelong learning of differ-disciplines ent disciplines – from accounting to organizationThis is why we strive to see our work in the ICV and management – is an absolute must.contribute to raising controlling in Croatia to ahigher level. Ultimately, if we’re getting ready for I’m convinced that, once we meet this first chal-Europe, controlling is one of the first things we’ll lenge step by step, the second challenge willhave to understand and implement in our mental somehow solve itself automatically – i.e. the cur-framework. If controlling is a self-understood giv- rent weak demand for controllers. I deeply be-en for Europe, ignoring it is simply not an option lieve that the more controllers are out there onfor Croatia. Our ultimate goal is developing a ho- the market with in-depth knowledge and qualitymogenous group of highly educated and trained ideas, the sooner managers will start reaching forcontrollers of high quality capable of solving any their expertise and services. It’s only a question ofcontrolling task or problem. Or more specifically: creating the preconditions for it.forming an incubator of the best controlling ex-perts in Croatia. Just like Malcolm Gladwell says in his book The Tipping Point, I want to believe that CroatianThis path is full of challenges, of course. First and controlling only needs a critical mass of the rightforemost, there aren’t many controllers in Croatia, people who will (re)direct powers in another direc-and they’re mostly under- or inadequately trained. tion. I also believe that we have already startedThe majority work in foreign companies so they treading this path.have the opportunity to gain knowledge and ex- ICV Working Group meeting in Croatia 7
  10. 10. More successful controllers:Hungary Psychology of decision making Controllers take more and more seriously the recognition they can be more successful knowing more about the psychology of decision making. No wonder this topic got an important role at the Budapest Controlling and Management Forum on June 6, 2012. Professor Dr. Dr. h.c. mult. Péter Horváth delivered a lecture about his research and other speakers broached the subject, too. The construction of the American Shoreham Audience asked Nuclear Power Plant is not the only project to solve conundrums costing a huge amount of money until it was To illustrate the importance of the matter, Prof. stopped. At the beginning in 1966 costs were Horváth asked his audience to solve some co- estimated at USD 75 million and completion nundrums. One of these was about a baseball was planned for 1973. Years went by, and bat and a ball costing 1 dollar 10 cents altogether. costs grew. Trial operations started just in The ball is 1 dollar cheaper than the bat. How 1983 and by that time USD 4000 million had much does the ball cost? The professor got a already been burnt. Another six years went by good answer – the ball costs 5 cents – but we and altogether USD 5500 million was needed have to admit that the majority of the audience sat to terminate the project. “But why don’t we in silence. The conundrum came from the Nobel István Radó Senior partner, IFUA stop such a project early enough?” asked Prize winner American psychologist and econo- Horváth Partners Prof. Dr. Dr. h.c. mult. Péter Horváth in his mist Daniel Kahneman, who put up the question member of the Managing lecture held at the Budapest Con- to students and 80 percent of them Committee, International Group of Controlling trolling and Management Forum. “If we know how answered the ball cost 10 cents. “This The answer lies in psychology. we think and phenomenon is called ‘anchor bias’, how we make because we come to anchor at the The professor, who founded the first number that occurs to us. Our management consultancy Horváth decisions, we controlling reports are read the same Partners and the International Per- can improve our way”, the professor stated. formance Research Institute (IPRI) in decisions.” Stuttgart, studies such questions. IPRI Another conundrum followed the first has a great project together with the International one. Linda is 31 years old, single, outspoken Controller Association (ICV) about decision mak- and very bright. She majored in philosophy. As a ing. Prof. Horváth reminded that Professor Albre- student, she was deeply concerned with issues cht Deyhle, one of those who introduced control- of discrimination and social justice, and also par- ling in Germany, pointed out that controllers and ticipated in anti-nuclear demonstrations. Which is decision makers continue a “quadrilogue” instead more probable? 1. Linda is a bank teller. 2. Linda of a dialogue. They argue rationally “above the ta- is a bank teller and is active in the feminist move- ble”, but interact also emotionally “under the table”. ment. This was a conundrum again from Daniel Kahneman and his co-author Amos Tversky. In their research 85 percent of the respondents chose the 2nd answer. “But it is less probable that two different features occur together than either one alone”, Prof. Horváth explained. This failure of thinking is called ‘conjunction fallacy’. 8 CONTROLLER Spezial | Controlling International
  11. 11. Dr. László Szabó, CEO of Teva Hungary, and Prof. Dr. Dr. h.c. mult. Péter Horváth in BudapestAnd the third conundrum goes like this. We have amples. Some years ago he was CEO of Ily Lillya new drug for a deadly disease. 20 percent of in New Zealand. A journalist called him and askedthe patients who take the drug die immediately, whether it was true that they make experiments80 percent of the patients recover immediately. with a drug which kills two-thirds of the patients.We have to decide whether to introduce the drug Dr. Szabó had to research the case and found thator not. “Who says we have to introduce it?” Prof. they had an antihypertensive medicine and wantedHorváth looked around the conference room to make clinical tests with death-sick patients be-and commented “not many”. The same question cause chances were good that the mortality ratewas put up in scientific research, and the vast could be reduced. “But we stopped the clinicalmajority of the respondents said the medicament tests. We were afraid of a class action. We knewshouldn’t be introduced. “But it means that we that lawyers advertised in newspapers searchingcondemn to death all the patients, although we for patients who took that drug”, said Dr. Szabó.could save 80 percent of them”, said the profes- Dr. Viktória Bodnár, managing partner of Horváthsor. “This is called ‘omission bias’, which means Partners in Budapest, also mentioned psycho-that we omit a decision because it’s risky. This logical aspects when speaking about why wecan happen also with an investment or a product should change for modern planning systems.development.” According to research, corporate leaders declare“If we know how we think and how we make deci- that flexible planning is needed, but they usesions, we can improve our decisions”, stated Prof. traditional planning systems. “In days of crisisHorváth. For example, teams can be more effec- always increase the number of those who saytive if they consist of people with different ways flexible planning is needed. But intention isn’t fol-of thinking. Such an effective team was formed lowed by execution”, said Dr. Bodnár. Accordingby Coco Chanel, the fashion designer, and Pierre to her experiences this has two main reasons.Wertheimer, who managed the Chanel fashion Firstly we don’t feel like accustoming ourselveshouse. “Creative people can make a successful to new things. Secondly we are not willing to giveteam with analytical people.” up things.“Heuristic models gain importance” So the Budapest Controlling and ManagementAnyway, analysis in itself doesn’t ensure success. Forum proved that it’s time for controllers to studyIt can be too expensive, complicated and the psychology.majority of people don’t understand it. Heuristicmodels are simpler, cheaper and they can be evenbetter! One example for this is how to find outwhich customers are already “dead” for us, i.  ite.isn’t worth dealing with them. We can consider acustomer “dead” if s/he didn’t buy anything fromus in the last 6 months. This is simple and researchproved that it’s as good as analytics. “Nowadayswe have no time to collect a lot of data and haveto decide quickly. That’s why heuristic models gainimportance” said Prof. Horváth and he closed hislecture with some practical advice to find suchmodels.The next speaker, Dr. László Szabó, CEO of TevaHungary, reflected on one of the professor’s ex- 9
  12. 12. Controlling spreadsSLOVENIA across the former Yugoslavia countries. a necessity or a fashion? The International Controlling Association (ICV) has been engaged in the development of a modern and practical controlling philosophy for practitioners for a long time. The whole story started in Germany in 1975. ling philosophy, at first needed in profit areas only, The ICV was established by graduates of the nowadays plays a more and more important role Controller Academy in Gauting, Munich as the also in non-profit organizations and the public Controller Verein e.V. (Controller Association) sector. There is a tremendous need for the right with the aim of bringing together persons in- information in advance, to be prepared for future volved in practical controlling in the German- changes. speaking area, popularizing the philosophy and use of controlling as well as promoting In the past few years ICV has also spread across exc h a n g e of p r ofe s - the former Yugoslavia sional experiences and countries like a good “vi- improving the quality of rus”, the virus of knowl- Dragica Erčulj ICV Regional delegate professional controlling edge and experiences South Eastern Europe and in practice. Today it has from their more estab- a leader of WG Slovenia over 6,500 members all lished and experienced over Europe, in German colleagues from western and non-German speak- Europe. ICV work groups ing countries. Due to started to work in 3 other the multinational back- countries: Croatia, Serbia ground of its members, and Bosnia-Herzegovina. the Controller Associa- In most of these countries tion was renamed to In- Which country is going to be next? the role of controlling is ternational Controller 2005 - G Slovenia W still that of a passive ob- 2010 - WG Croatia Association. 2011 - WG Serbia server, an analyst of past 2012 - WG Bosnia and Herzegovina business events or simply After 1995, the Interna- someone who produced tional Controller Associa- reports. But there are al- tion spread all over central and eastern Europe, ways some individuals who notice the opportuni- including the former Yugoslavia countries. First ties for controlling. They want to find out more work group started in Slovenia in early 2000. about controlling to increase their professional Globalization, the Internet, social networks, etc.: qualifications, they are looking for the controller’s all these help a lot in promoting awareness of con- community and find ICV. In most cases, this is a trolling, not to mention during bad times. In times start. While being a member, they recognize the of crisis, companies are forced to search for re- benefits of being a part of the ICV family and they serves and lower their costs on the one hand, and try to bring ICV closer to their business friends, to increase efficiency and adapt the supply on the closer to their home country. On the other hand other hand. Focusing primarily on the financial they bring new questions and present needs to situation requires more effort by all involved and the ICV while attending workshops, seminars and controlling could help a lot. Further more, control- regional controlling conferences. 10 CONTROLLER Spezial | Controlling International
  13. 13. Which country is going to be next? 2005 - WG Slovenia | 2010 - WG Croatia | 2011 - WG Serbia | 2012 - WG Bosna and Hercegovina Which country is going to be next? Companies use controlling very differently, but are aware that this is a feature that may contrib-ute to the company’s performance and transparency of operations. But before achieving goodresults, companies have to go a long way and make improvements at different levels or areas.I would like to point out some of them:■ atabase (data warehouse). Controllers are responsible for the structure of income and expenses D based on accounting, for the structure of cost calculation, for cost estimation. Therefore cost centers and cost objects are needed. These structures are essential in the analysis of a company’s economics. The most important consideration is to have a good foundation. It is not only difficult but sometimes impossible to estimate elements not indicated in the data warehouse.■ The change “controller as a business partner of the manager” and “ having a joint responsibility to reach the objectives” is based on systematic work with goals, for example strategic planning and budget directed towards margin contribution.■ he controller is involved in strategic and operational issues, so he/she should be familiar with differ- T ent and suitable analyses and instruments, for example SWOT analysis, Balanced Scorecard, target pricing and KPI in combination with soft controlling, for example ethics, competence, relationship, etc.■ bservation, forecasting and implementation of the sustainable business by steering the circle. The O controller takes care of the continuous improvement in order to secure the sustainable development of the company, as a navigator. Key Performance 12th ACC, Slovenia Indicators (KPI) based on technological processes are nowadays very well- The Adriatic Controlling Conference takes known and accepted instruments and could help controllers a lot! place in Portorož, Slovenia on the 25/26 Oc-■ ontrollers act as a moderator and adviser to the manager – by systematic C tober 2012. Financial directors and CFOs will use of financial and non-financial figures and indicators. The Controller is appear in Portorož to discuss the influence of authorised to provide counseling without being asked to do so. controlling in daily business. Praxis for praxis is the main point of the yearly conference,■ mplementation of the controlling system. The controller is well aware of his I but also education, seeing new trends, and customer’s (managers on every level) needs and seeks effective results. So, gathering and exchanging experiences. the controller builds his own business model to help him prepare a good management reporting system. This year the motto is “Experiences from the past in the methodologies of the future”,A certain set of preconditions must be satisfied (for all the points mentioned since the turbulent times we are seeing in-above) and the most crucial one is an interested management. An enthusiasm creasingly rely on already established andof the controller is just not enough. proven methods that are used in a modern way and with modern technologies. High-But there is nothing to be afraid of. Pioneers exist – in every country, in every lights of past conferences can be found attime period, in good times and in bad. 11
  14. 14. Crisis SPAIN demands representation of the controlling Spain is facing one of its biggest crises in the last century and this situation is demanding the representation of the controlling more than ever before. The ICV Work Group in Spain and the Circulo Controller in Barcelona are doing many activities to create a meeting platform for controllers, to popularize the philosophy and use of controlling, to promote the exchange of experiences and to enable its members to increase their professional qualifications. Networking as well as collecting and sharing ideas concerning controlling is one major topic of the ICV Work Group in Spain. The monthly “Stammtisch” with great speakers Other new activities we have planned for this year Ulrich Müller Bosom Head of the ICV Work like Prof. Fernando Campa from the University are the visit in September to the winery Bodegas Group Spain, Barcelona Rovira i Virgili in Tarragona, who spoke about his Torres in Vilafranca del Penedes and a workshop controlling book and the importance of establish- in October in the University of IESE Barcelona. ing an operating controlling, Mr. Pere Brachfield, The workshop will be held with 12 people and will expert in Credit Collection, and Prof. Francesc focus on developing criteria to select a business Granell Trías from the University of Barcelona reporting tool to better plan and simulate different and Director of Program EUS, who spoke about scenarios. pricing and other competition elements in the EU. As we are a small number of ICV members in The breakfast meetings with Ernst Young and Spain, but are convinced that the ICV knowledge the German Chamber of Commerce with CFOs and understanding of controlling is very interesting coming from companies like Schneider Electric also for Spain, we are planning to hold next year with Mr. Cyril Helbert, who spoke about con- a Controlling Congress in Barcelona, coinciding trolling in volatile times, and with the CFO from with the tenth anniversary of the creation of the Ficosa, one of the biggest Spanish automotive Controlling Association. The idea is to do this suppliers, who spoke about the challenge they congress together with the Accounting Associa- faced in finance and controlling with their world- tion of Catalunya at the end of May. They used wide expansion. to do a congress every two years with more than one thousand participants from all over Spain. Since 2008 we are organizing with They are very interested in doing this the CA Controller Akademie two- congress together with the ICV be- day seminars. This year we had in cause they want to collaborate with March a controlling seminar and international associations to enrich in April a sales controlling seminar, the value they provide to their mem- both led by Dietmar Pascher from bers. Through this congress we expect to the CA Controller Akademie. increase our ICV members in Spain considerably. 12 CONTROLLER Spezial | Controlling International
  15. 15. Kaliningrad conference 2012: The 1st ICV working group in Italy “Controlling and Competitiveness” will be founded Mixed info The 5th International on Nov. 8/9, 2012 Controlling Confer- The initiator is Claudio Zoldan, Bofrost Italy, ence, organized by and the working group will be established in the “Kaliningrad Club the northern Italian region. Experts interested of Controllers” with in joining the new network are kindly asked to the aid of the Interna- contact Mr. Zoldan: tional Controller As- sociation (ICV ) and s u p p o r te d by t h e news portal Newka-, took place on June 29. Approximately 60 guests – with a high percentage of regional entrepreneurs – joined the conference “Controlling and Competitiveness”, which was moderated by Valentin Usenkov, President of the Controller’s Club and ICV member. The opening lecture was given by Frank Sommnitz, commercial director of Hansgrohe Poland and Chief Controller Eastern Europe in his inter- national company. Sommnitz presented controlling methods and tools, driven by Hansgrohe, which are highly important in our volatile times. At The ICV is just preparing the end the listeners used the opportunity to ask for details for example the 1st working group in concerning production planning and marketing controlling. the UK and is looking for some more members. Further lecturers spoke about relevant topics like diversification, out- The kick-off meeting will take place on Oct. sourcing, surveillance of the competition, and core competences of 10/11, 2012 in London. The organizational successful controllers. Valentin Usenkov described the different role of team is leaded by Mrs. Milena Heim. She was company owners, managers and controllers in the field of controlling. already involved in establishing the ICV work- An interesting specialty of the Kaliningrad conference: three of the lec- ing group Bulgaria and turers hold two offices simultaneously – owners and general managers. she has also been an The final lecture was given by Prof. Sergey Falko, Baumann University active member of the Moscow and Head of the Russian Controller’s Association, about the German ICV working “Application of controlling instruments in the current volatile economy”. group Berlin-Branden- burg. For more infor- The next international Kaliningrad Controlling Conference will take place mation about the on June 28, 2013. International guests are welcome. UK group please contact Mrs. Heim: ICV working group in Bosnia-Herzegovina On June 30, 2012 the first ICV working group Bosnia-Herzegovina started in the town Banja Luka. Mr. Slavko Simić was in collabora- tion with the “Center for the improvement of corporate governance” – an association of economists and managers in the country with more than 100 members – initiator and organizer of the kick-off meet- ing. Slavko Simić is ICV member and will lead the new working group. More than 40 participants, mostly managers, auditors, CFOs and IT spe- cialists, took part. “No controllers yet. To establish a controller profession a lot of work has to be done there”, writes Dragica Erčulj, ICV’s Regional Delegate Southeast Europe from Slovenia, who took part in the meeting. “It is the beginning. People are interested in controlling and they recognize the ICV working group as an opportunity to start and to learn.” 13
  16. 16. Sales Performance Steering in Automotive BusinessCHINA The customer behavior in the Chinese market displays predominantly a lack of patience to wait for a car. He/she walks into a dealer showroom and wants to take it away. The majority are also very price-sensitive. Hence dealers tend to order cars with less equipment and lower prices, often equivalent to less profit for him and the manufacturer. A classical up-selling (from Trendline to Highline) and cross-selling (options and accessories) rarely occurs. The overachievement ver sus budget of Such a high level target on company level needs 100,000 cars whilst not meeting profit tar- to be cascaded down to regional level or even gets triggered the development of a Sales dealer level. We have included the achievement of Performance Steering Concept. To ensure the financial sales performance into the Regional that growth is not just simply “bought”, but Sales Managers’ Key Performance Indicators delivers additional profit, it requires the es- within the Management by Objectives, which are tablishment of tools and the installment of an bonus relevant (RSSC: Regional Sales and Ser- appropriate mindset into the sales force. The vice Centers, RBO: Regional Business Offices). top management support will depend not only Instead of 100% Volume Bonus as given before, on the persuasiveness of the concept, but the management decided to split the bonus into also on the feedback about the feasibility in 70% volume-related and 30% profitability-related. Andreas Malcherek Manager Sales Finance daily operations. On top of all that, we decided to pay an additional and Sales Controlling performance bonus of max. 15% to the top rank- Volkswagen Brand ing region with regard to profitability. Shanghai Volkswagen Our concept has been established in the past years and is accepted throughout the organization As a first step all non-sales related costs have to be identified and “locked-in” on budget level, thus ensuring that only costs which can be influenced by sales are steered. On this basis a Sales Perfor- mance per Car and the Total Sales Performance in a sum can be calculated. Additional profit from After Sales, Financing and Related Services can be added. Against this budget the actual perfor- mance will be measured. Bernd Pichler Chief Financial Officer In return the managers want to know how they Volkswagen Group Import (China) Co. Ltd. can influence it, and they require a meaningful, customized reporting and consequently the de- grees of liberty to steer the mixes of cars (includ- ing model and type mix) for their region as well as budgets for regional marketing, tactical support and overhead expenses. Additional support could be achieved by establishing regular business reviews on a quarterly basis within the regions. Controlling worked out a common business plan for the three least performing regions to improve their performance within the following quarter. 14 CONTROLLER Spezial | Controlling International
  17. 17. As support every region has a Finance Manager regular intervals whether the assumed, frozen The Shanghai Volkswagenlocated decentrally in the RSSC/RBO, who previ- non-sales budget cost are on track, otherwise the Controlling Department with regional financeously only focused on accounting related tasks Sales Performance per Car has to be re-adjusted. managers at a traininglike travel reimbursement and petty cash man- Next step is to train the regional finance manag- sessionagement. To be a useful assistant to the Regional ers to establish the sales performance approachManager the Finance Managers needed training for every single dealer in the region. There will beand were upgraded from a mere administrator to times, also in China, when mere volume growth isan advisory role. not option anymore to generate profits, but focus- ing on Sales Performance per Car. The before-One result was that the general responsibility in mentioned, of course, cannot be to the detrimentthe sales company to (over-)achieve the budgeted of dealer and customer satisfaction.profitability targets (Sales Performance in millionRMB and Sales Performance per Car) increased The financial success is significant and was rolledcontinuously by focusing on dealer ordering out to more entities in our group. Times are overmanagement. To steer into the right direction that in sales only volume and market share countsinformation about which model actually provides – sales performance nowadays is also measuredhigher Sales Performance per Car is needed in in monetary terms. It shows how well the salesthe regions. By providing a simple, non-scalable organization optimizes turnover and managesranking in the form of a ‘Pan-Flute’ chart, every sales related costs.manager will know how to improve the ordermix. Thus we do not reveal sensitive data to theorganization, but ensure profit focus.focusing on Sales Performanceper carMoreover the new bonus system encourages theregional managers to discuss the achievementand development of sales performance with ourcontrolling department during the year. Thesewere the right measures at the right time, but thisconcept works in difficult times as well as boomtimes.In recent times the customer behavior in Chinachanged. Due to Internet research our Chinesecustomers are well informed about our productportfolio and order our advertised cars at dealershowrooms in every product range. So our deal-ers started to rethink their ordering behavior andat the same time we established the profitabilityapproach in the sales organization. To ensurethat overall consolidated profitability is reflectingcurrent developments, the manufacturer and thesales organization need to monitor and align in 15
  18. 18. Kazakhstan’sKazakhstan model of controlling The significance and importance of controlling is determined by its goals and objectives for which controlling is a structured process that aims to efficiently and effectively make use of capital resources in accordance with an overall development strategy and entrepreneurial interests. Controlling development in the CIS countries and software with regard to computer programs under current conditions is determined by which are not adapted to financial analyses. theoretical and practical aspects. Kazakh- Here again, there are several issues on introduc- stan has gained its practical experience of tion and management of all controlling elements. controlling in large enterprises from leading Among them occur the following problems: industries such as Kazpost, KazMunaiGaz - management; among others. - staff; - accounting; As noted in various papers, Kazakhstan’s de- - priorities, mission and values of controlling. velopment comes from theoretical and practical experience in American, European and Asian Controlling handed to department Sarkyt Tashenova Doctor of Economics, countries in terms of management accounting. of accounting and auditing Professor, Head of Despite substantial theoretical work on controlling In connection with the reform of education in Department “Evaluation, or managerial accounting in the USA, as well as in Kazakhstan for 2002–2006, several educational accounting and auditing” of the International Academy many other countries, the organization’s analyti- standards have been developed. The Depart- of Business, Almaty, cal work on enterprises is not naturally systemic, ment of Management, micro- and macroeco- Kazakhstan which is primarily due to personal management nomic institutions and almost all universities of in individual firms. In this case foreign companies the Republic of Kazakhstan have not includ- operate in isolation and management solutions ed “Controlling” in their general guidelines, but for every enterprise are a source of trade secrets. handed it to the department of accounting and The most In addition, private economists leave their prob- auditing. Consequently, controlling entered the common use lems of controlling and management accounting SES of Kazakhstan Republic 2004–2006, as in the republic, which is dominated by market a mandatory component for graduation with a of controlling degree in accounting and audit. At present due needs and by diversification of individual indus- services and units tries including manufacturing processes and to the urgency of controlling the enterprises of is taking place business innovation, new technologies, and new the republic, the Department of Management in companies products and services. The disadvantage of the and micro- and macroeconomic institutions are use of Kazakh in controlling is the gap of theory using the development ideas of Russian authors with foreign on controlling in other fields without singling out and relevant education resulting in specialists participation. treating controlling in accordance with their own controlling separately. Using Russian and foreign activities and interests. Auditors, accountants experience means allocating controlling to two and other professionals have a respective union major approaches. The Russian authors Karmin- requiring licensing, certification and training, un- sky A., Falco, SG and others also emphasize that like in Kazakhstan where controllers have no controlling can be understood as a discipline for such union and status. Controlling specialists accounting management and financial profes- are responsible for used information technology sions [1]. 16 CONTROLLER Spezial | Controlling International
  19. 19. Business Controller Department of Department of Logistic Department of System Department of staff Office ofIn addition to controlling, the use of the educa- Accounting Administration Administrationtional process is an important experience in many Chief Accountant Senior Logistic System Administrator Administrator on staff Administrator on officecountries where specialization is mandatory forcontrolling classes together with working in prac- Accountant 1 Manager of ware- housetice, with possible certifications and licenses.The Russian experience of teaching controllers Accountant 2 Specialist on pricingis based on the European and American system Accountant 3 Specialist on logisticof training controlling which results in the require-ment for certification of controllers with a three- Accountant 4 Figure 1tier system of training in accordance with require- Organizational structurements for certification of the European Associa- Accountant 5 of controlling department,tion of IGC – International Group of Controlling [2]: KazakhstanStage 3 – ertificate of basic knowledge CStage 2 – Certificate in controlling place in companies with foreign participation,Stage 1 – Certificate of professional controller one of which is TOO Atlas Copco Central Asia, where the business controller coordinates theWithin this system the training of controllers by activities of several departments. The organiza-Russian specialists from the non-profit organiza- tional structure of the service business control-tion “Association of controllers proposing issu- ler is shown in Figure 1.ance of certificates of highest degree” signifiesthe coaching of controllers. For the transition to Duties of the Business Controllerthe high-quality and targeted training of control- in this company are as follows:lers it is necessary to define the mission of con- 1. Coordinating the work of departmentstrolling including: 2. Compilation and analysis- its purpose; of monthly reports- the importance for use in the enterprise; • Sales Report- creation of appropriate structures at the level of • eport of the residues in stock R senior management; and gross income- e stablishment of an appropriate accounting, • Profit and Loss Account and Balance analysis, planning, knowledge base and applied • Report on the “control figures”: information technology. - Term of inventory (in days) - Term Receivables (days)This means that you should create a generally - Number of employeesdefined vision of the role of schools and control- - Depreciationling as a scientific field. This, in return, requires 3. Making a report of cash flowsthe combined efforts of scientific-pedagogical 4. Forecasting salesand practical training in several countries. In con- 5. Budgeting Sarkyt Tashenovaducting seminars and workshops in educational 6. Coordinate the work of regional offices with colleagues of the International Academycenters, the development of leading centers and (Armenia, Mongolia, Uzbekistan) of Business, Almaty,associations of controlling is made use of, but 7. Conducting internal audits Kazakhstaninsufficiently, as many experts do not understandthe importance and necessity of expanding thescope of controlling. Like many innovations, con-trolling is not perceived as a separate guidelinein economic science, and is used as auxiliarymaterial in the management of other courses ineconomics. In this respect, the practical applica-tion of controlling for large companies, adaptedfor Kazakhstan, signifies a wider range of applica-tions. The gap between theory and practice ofcontrolling in the republic should be taken into ac-count, where the combination of the two is behindtheory, as research and development in this areaare not adequately treated as in other areas of theeconomy and its representatives. The most com-mon use of controlling services and units is taking 17
  20. 20. Mission Business Controller in the To a certain extent the orientation of Kazakh- LLP Atlas Copco Central Asia: stan’s controlling referring to internal accountingKazakhstan - Provide transparent reporting to manager of a is based on the approach or model of the Ger- company for management decisions; man school of controlling, which is confirmed by - organization of uninterrupted operation of the studies on the interaction of controlling and IFRS Administrative Department; (International Financial Reporting Standards) of - early action in administrative/ the Work Group “Controllers and IFRS”. The work managerial decisions. group members are mainly experts in the field of controlling from German-speaking countries, the Kazakhstan companies which include control- most famous of whom are doctors and professors ling as service in its management structure use in economics: Peter Horvath, Walter Schmidt, appropriate computer programs, such as BPCS, Barbara Veysenberger and others [3]. One of the Controlling and others, which in addition to ac- requirements for the application to controlling counting functions perform analyses, planning in the context of the use of IFRS is growth and and forecasting. the presentation of requirements for professional The organizational structure of the service busi- competence of controllers, coordination and de- ness-2 controller is shown in Figure 2. velopment of a concept of controlling as well as common terminology on controlling. The main issues considered by the Working Group IGC, are: 1. Link IFRS and controlling: Department of - orientation of IFRS towards investors; Business controller Accounting - he relationship between IFRS and existing t tools of controlling. 2. Conceptual understanding of integrated accounting: Department of Chief accountant - Disadvantages of integrated accounting. Logistics 3. Proposal IGC: partial integration of accounting: Senior - The need for adaptation and expansion. Accountant No 1 Logistics Thus the main conclusion of the work group IGC suggests that the development of market Accountant No 2 Warehouse relations and the transition to IFRS increases op- portunities for the application of controlling in the enterprises with the use of forecasting techniques Logistics based on market mechanisms. In this case the Accountant No 3 Specialist basic tools remain the controlling methods of analyses based on computer programs, as well as the provision and use of information for internal Accountant No 4 planning and forecasting. References: 1. онтроллинг: учебник / А.М. Карминский, К Accountant No 5 С.Г. Фалько, А.А. Жевага, Н.Ю. Иванова; под ред. А.М. Карминского, С.Г. Фалько. – М.: Финансы и статистика, 2006. – 336 с. 2. азурин Э.Б. Сертификация контроллеров М Figure 2 // Контроллинг. 2007. - №2(22). - С. 62-63. Organizational Structure Division of Administration, 3. ейсенбергер Б. Интеграция учета по В Kazakhstan МСФО // Контроллинг. 2007. - №1(21). - С. 16-22. 18 CONTROLLER Spezial | Controlling International