Management Control

Big data
WRITTEN BY Jordi Armengol i Valls
16 May, 2023 — 4 min
Management Control

Management Control. Surely we have all recently heard the expression that information is gold. In recent years, the term Big Data has gained prominence among us, especially in the business world, as it allows, among other things, to convert the data we obtain from third parties into products or services to offer to potential clients.

But beyond the large volume of third-party data that technology today allows us to obtain with relative ease, with the permission of the data protection law, the self-employed and SMEs should give priority to the information and data generated by their company. "What gets measured, gets improved." This phrase, often attributed to Peter Drucker, highlights the importance of measuring. In reality, the phrase belongs to the physicist and mathematician William Thomson Kelvin: "What is not defined cannot be measured. What is not measured cannot be improved. And what is not improved always degrades."

Management control should allow us to obtain the necessary data with the appropriate frequency to know the health of our company. It should allow us to control the deviations that occur and to be able to correct them quickly and know if the company is progressing and at what pace. This analysis is applicable to all areas of the company. If we focus on the financial area, it will be essential to have up-to-date accounting in order to correctly track the company's results and any other magnitude that we want to measure, such as the margin with which we work, the average payment term to suppliers and collection from clients, or the company's debt ratio, among others. If we also have a budget at the beginning of each year, we can track it month by month to assess deviations and act to correct them.

Often, the small business owner tends to think that this control is more designed for large companies than for them, but good business control, adapted to the needs of each company, becomes almost essential to make the right decisions in an environment as changing as the one we are currently facing.