How to Develop Controlling 4.0 in Line with the Requirements of Industry 4.0

– In the active creation of strategies for Industry 4.0, the task of controllers is to identify potential benefits of digitalization, determine the level of automation, and check who will be the new competition in the market. Controlling experts also need to assess what to focus on in risk management, create new revenue models, modify cost calculations, and price data, said Goran Sejdić, a research associate at the Institute for Business Research in Stuttgart (IPRI), at the 4th International Conference on Controlling.

Sejdić, who is currently writing a doctoral thesis on production controlling under the mentorship of one of the leading controlling experts, Peter Horvath, explained the dual objectives of Industry 4.0, which aim to optimize company work processes through more efficient methods in the creation of products and services and to enhance customer benefits by developing innovative products and services.

– Controlling, as a partner of management, must also be its advisor. Currently, its role is to tell management that it is worthwhile to invest in the development of controlling and other company systems in line with the environment of Industry 4.0, says Sejdić.

In a study conducted by the Institute on 200 companies, the majority of respondents (67%) stated that they have not yet dealt with the topic of aligning the company’s processes with Industry 4.0 and plan to address it in the future. In the same study, the main potential benefits of Industry 4.0 in controlling were identified as follows: improvement of operational processes, recognition of new causal relationships, real-time data analysis, faster analysis, and decision-making. On the other hand, the main challenges posed by Industry 4.0 to controlling were identified as the use of new tools and methods for analysis, data selection, reporting results, and adapting internal processes.

– Be prepared for the future, concluded research associate Sejdić, who is honored to work for Germany’s leading controlling expert, Peter Horvath.

A Close Look at the Reports of the City of Graz

The reports of the Austrian city of Graz were complicated, filled with complex tables, and the costs and key performance indicators of all administrative departments and city-owned enterprises were not published in one comprehensive report. Such a process led to confusion and lack of transparency. With the help of controlling methods and Dietmar Pascher, a resident of Graz, from the Controller Academy, Graz is now a leader in a new way of management, a successful example that everyone wants to follow, and the winner of the Austrian Chancellor’s Award for City Management in 2016. Pascher presented his successful model, which he intends to further expand, to participants at the 4th International Conference on Controlling. Now, all previously mentioned costs and performance indicators are listed on one page, in one report, and the causal relationships between financial budgets and departmental operations have become visible.

In short, Pascher explained, today the managers of Graz see where money is spent and how exactly it is spent, and such a new, transparent, and simple overview of financial activities can only be implemented if politicians are open-minded and ready for change.

Authors: Nikolina Oršulić, Luka Fišić