Beyond the myth, the internationalization process is a long, hard and complex process. It requires investing resources without knowing very well the expected return on them. On the other hand, it forces a radical transformation of the company's organization.
First of all, let me clarify that for me, internationalizing a company does not mean selling products in exotic countries while maintaining production in Spain. That is called exporting. It is, of course, difficult and involves a learning process . At the management control level, it requires adapting to new environments and markets, managing risks that did not exist until now – for example, regulatory or exchange rate risk – and ultimately changing something about the company, but it almost never requires a revolution in the company.
For me, internationalization is the process by which companies create permanent headquarters in other countries. At that point, the rules of the game change substantially. The schedules are different, you don't have a colleague in the office next door, the tax systems are different, the local marketing email list dynamics of competition are not known, there are cultural barriers when it comes to closing deals, there are restrictions when it comes to moving the company's treasury, information systems are no longer valid, etc.
How can and should the controller assist in this process?
First of all, the controller must convey that internationalisation is an investment for the future. And as with any investment, it is necessary to know how much money we are willing to invest . This should be the controller's first objective. Define an international investment plan that determines the total amount to be invested, over what period, how it will be financed and what would happen to the company if there were no return on these investments.
Secondly, it will be necessary to estimate the costs of the internationalisation process . Normally, the process begins by setting up a new company in the destination country. Later, it is decided to expatriate some employees from the parent company so that they can find new business. Finally, if necessary, some type of investment in the new country is formalised and, from this point on, local staff is usually hired.
Therefore, at this stage we should assess the costs of establishing ourselves in the country . We should analyse how much the offices and expatriate staff will cost, how long they will remain open without gaining new business, what resources we will allocate to external advisors who will be necessary to develop the country, etc.
