Outsourced management control: a key solution for steering your business
Outsourced management control has become an essential strategic service for companies wishing to optimize their financial performance while controlling costs. This service enables managers to delegate the management of financial and operational data to external experts, providing them with a fresh perspective and precise analyses to help them make well-informed decisions.
For start-ups and SMEs, outsourced outsourced management control represents a flexible, cost-effective alternative to hiring an in-house management controller. With Iter Advisors, you'll benefit from customized support tailored to your needs and managed by experienced professionals.
What is an outsourced service and why adopt it?
Definition of an outsourced service
An outsourced service involves entrusting certain, often non-strategic, activities to external service providers. This practice enables companies to concentrate on their core business, while relying on experts for specific tasks, such as management control.
In the financial sector,outsourcing is particularly beneficial for companies undergoing rapid growth or faced with occasional needs for expertise.
What is outsourcing strategy?
Adopting anoutsourcing strategy aims to improve overall company performance. This involves :
- Cost optimization: Reduce fixed costs related to in-house positions.
- Refocusing on priorities: Delegate complex tasks to concentrate on strategic decisions.
What are the fundamental principles of management control?
The 4 pillars of management control
Controlling is based on a number of principles that are essential for effective financial and performance management:
- Planning: Define precise financial and operational objectives.
- Measurement: Collect and analyze key data to assess performance.
- Comparison: Identify discrepancies between forecasts and actual results.
- Corrective action: Adjust strategies to achieve objectives.
These steps enable the company to maintain a clear, structured vision of its management.
What are the different types of management control?
Strategic controlling
Strategic controlling is part of a long-term business vision. It aims to align financial objectives with the company's overall strategy. This means ensuring that resources - whether human, financial or material - are used in a way that is consistent with growth ambitions.
A fast-growing company, for example in the Tech sector, with the ambition of doubling its sales over five years, can use strategic controlling to determine the necessary investments (R&D, marketing, recruitment). Thanks to detailed planning, it can assess whether its current margins and resources are sufficient, or whether it needs to raise additional funds to achieve its objectives.
Strategic control is particularly useful when making major decisions, such as entering a new market, making an acquisition or launching a new product. It enables us to anticipate risks and maximize opportunities, based on reliable data.
Operational management control
Operational controlling, on the other hand, focuses on the company's day-to-day activities. Its aim is to optimize internal processes in order to improve efficiency and profitability.
In an industrial SME, operational control can aim to reduce production lead times by identifying inefficiencies in the supply chain. By analyzing costs per unit produced, or variances between forecasts and actual results, the company can adjust its processes to minimize waste and maximize margins.
This type of control is essential for companies seeking to remain competitive on a day-to-day basis, while keeping costs under control. It applies equally to sales teams (sales performance monitoring) and field operations (inventory management, equipment maintenance).
Budgetary control
Budgetary control involves monitoring and adjusting company budgets in real time to ensure that they remain aligned with financial objectives.
Let's imagine a SaaS startup with an annual marketing budget of €200K. Thanks to the budgetary control in place, the startup realizes that certain advertising campaigns are generating fewer returns than expected.
By reallocating part of this budget to more effective channels (e.g. targeted digital advertising), it can optimize its return on investment while staying within its overall budget envelope.
Budget control also enables you to react quickly to unforeseen events, such as a sudden rise in costs or a drop in sales. It's an indispensable financial management tool for companies seeking to maintain total control over their finances.
Why choose outsourced management control?
Immediate and specialized expertise
When you call on an outsourced management control service, you gain rapid access to experienced professionals capable of providing precise analyses and strategic recommendations. These experts are masters of modern financial tools and have solid industry experience.
Cost reduction
By outsourcing, you avoid the fixed costs associated with an in-house position: salaries, social security contributions, training. You can also adapt the volume of work to your actual needs, which further optimizes your budget.
Time-saving for managers
Outsourced management control enables managers to concentrate on their strategic priorities, leaving analytical and operational tasks to experts.
Case study
Surfe (ex-Leadjet)
How do you set up outsourced management control?
Choosing a provider for outsourced controlling is a key step in ensuring the success of the collaboration. Here are the main criteria we suggest you consider:
Industry experience
Choose an expert who understands the particularities of your business sector. This specific knowledge will enable us to provide you with analysis and support tailored to your needs.
Technology tools
Make sure the service provider uses modern, high-performance solutions to automate and optimize processes. These tools can improve data accuracy and speed up decision-making.
Flexibility
Opt for a service provider capable of adjusting its services as your needs evolve. Whether it's a one-off assignment or regular support, flexibility is essential to maximize the effectiveness of your collaboration.
These elements are essential for selecting a partner who will meet your expectations and adapt to your financial and operational objectives.
How much does outsourced controlling cost?
Factors influencing costs
The cost of an outsourced controlling service can vary according to several criteria:
- Complexity of needs: A one-off assignment, such as drawing up a budget or setting up a dashboard, will generally be less costly than recurring support over several months.
- Frequency of interventions: Rates depend on the number of hours or days worked per month. The more regularly you work, the more you can adjust your costs.
- Tools used: Some service providers include the use of specialized software in their rates. Although sometimes expensive, these tools optimize processes and guarantee precise, efficient financial management.
Understanding these factors is essential to assessing the budget required and choosing a solution that is tailored to your financial and operational needs.
Why outsourcing is better than hiring an in-house controller
Outsourcing management control offers significant financial and operational advantages, making this solution often more economical and efficient than an in-house position.
Reducing fixed costs
Hiring an in-house management controller involves substantial fixed costs:
- Annual salary: Depending on experience, a management controller can cost between €40,000 and €70,000 gross per year.
- Social charges: These increase the total cost of the employee by 30-50%.
- Additional investments: Ongoing training, reporting software and specialized management tools.
In comparison, an outsourced management controller is invoiced on the basis of hours or days worked. This allows expenses to be adapted to the company's real needs, avoiding the unnecessary costs associated with a permanent fixed charge.
Operational flexibility
A company's needs evolve with its life cycle:
- A start-up in its growth phase needs intensive short-term support to structure its finances.
- An established SME may have one-off needs, such as setting up a budget or carrying out a profitability audit.
With an external expert, the company benefits from total flexibility:
- Intervention for specific periods or one-off assignments (budget preparation, cost analyses, etc.).
- Possibility of stopping or reducing collaboration as soon as the need is met, which is impossible with a permanent employee.
Specialized expertise and immediate results
An external management controller brings in-depth expertise gained from working in a variety of companies and sectors. This means..:
- Quick implementation thanks to proven experience in similar problems.
- Better mastery of modern tools and the latest management methodologies, which are often non-existent in less digitalized companies.
Recruiting an internal employee, on the other hand, often involves an integration and training phase, slowing down results.
Strategic rationale
An in-house controller can sometimes be under-utilized in a company with fluctuating or modest needs. By outsourcing, managers ensure that every euro invested in financial management is directly linked to a precise mission or objective.
Conclusion: Why choose outsourced management control?
In a nutshell, outsourced management control offers a flexible, cost-effective and high-performance solution for companies seeking to optimize their financial management.
With Iter Advisors, you benefit from a tailor-made service, led by experts committed to your success.