The Strategic Role of Management Control Advisor

of Luca Vanzulli
by Luca Vanzulli Blogger, Planning & Control Specialist, Content Marketer

SMEs find themselves operating in an increasingly complex and ever-evolving environment. The hyper-competitiveness of the market and uncertainty complete the picture and drive entrepreneurs to be more attentive and focused on management control and financial planning issues.

Often, the lack of corporate culture leads management to mainly focus on production, procurement, and marketing, mistakenly neglecting business management. Today, it is no longer possible to navigate blindly: it is necessary to plan for risks and potential imbalances through a careful system of planning, control, and result measurement.

Management control: what to do when you don't have time?

In many business contexts, the same entrepreneur ends up managing management control "in their spare time." However, this approach is now outdated and not geared towards adding value to the company. The entrepreneur should focus on the company's core business and rely on reliable partners or collaborators for the implementation and improvement of internal support processes and activities.

But how to make management control more proactive and structured in an SME? If you don't have the opportunity to increase human resources or train someone internally, it may be downright opportunistic to have someone follow up with a external and management consultantthat after a pre-analysis will be able to define the right steps for implementing an effective management control system. 

Remember: planning and control consulting is not meant to replace the entrepreneur but should be a valuable strategic support, which should lead the SME to evolve and change its corporate culture.

Where does the management control consultant start?

The activity of Management control advisor must start with a cognitive and exploratory phase of the company: it proceeds with the mapping and analysis of the processes, procedures, and operational mechanisms that are present in various company areas. Then, the following steps will be defined in consultation with the entrepreneur:

• Analysis of the current context;
• Improvement goals;
• Steps and timing of intervention;
• Modus operandi of the implementation plan;
• Periodic measurement of results;
• Further corrective action if needed.

Such an approach allows the company to grow and to implement a system based on dynamism and continuous improvement so that over time it can become autonomous and that will presumably need a next step related to the training of employees to carry out certain activities to analyze and monitor results. With this in mind, there will be a real change of course, and management control, if supported by management, will spread across all areas of the company fostering value creation and keeping the company's risks..

Introducing an advisor specializing in management control and financial planning consulting into the company has the advantage of improving the company performance and to increase the "know how" in terms of skills and change in the way of operating and measuring business results. The consultant controller once he or she joins the company should proceed to a preliminary analysis that is, a kind of check list aimed at understanding and learning about currently implemented management systems and processes. As an example, one might, for example, consider checking whether the following key elements are present:

• Control system;
• Budgeting activities and its level of use;
• Information Systems;
• Any human resources employed in the above activities;
• Collection, processing, management of business data;
• Analysis and measurement of results;
• Reporting;
• Forecasting;
• Monitoring of Cash Flows;
• Working capital management in terms of receivables, trade payables, inventory and stock, working capital financing instruments.

Conclusions

As you can understand the activity of the"Advisor controller" may therefore be geared toward major change in controlling processes and systems or project the company toward specific frontiers for improvement and growth. The consultant will support your company with a specific focus: creating a operational method effective and strongly oriented toward setting goals, measuring results, supporting business decisions, and increasing awareness of economic and financial sustainability issues.

If you would like to learn more about this topic, we recommend Masterclass: Managerial Control (16h online) to develop skills in managerial control, from budgeting, to management control, arriving at reporting. Click here to learn more.