Posted on 22/02/2016, 13:55
Management information (MI) is data or statistics which is collected and used to measure performance in given areas of a business and drive change to achieve improvement where needed.
MI helps you make valid business decisions by providing accurate and up-to-date information and reports to provide guidance for your decisions. However your MI has to be relevant, accurate and timely to be an essential element that drives business decision making.
Lack of MI and key performance indicators (KPIs) are among some of the main reasons why businesses struggle. Yet we often see incomplete, inaccurate, unreliable MI that is not produced within required timescales and a lack of KPIs or poor KPIs not aligned to the business goals.
Many people who own and run businesses in the SME sector possess unique technical strengths but find the “business numbers” the least favoured part of business. However it is essential that you can identify the vital areas to focus on for sustainable growth and then make sure you understand those areas, take ownership of them and take action based on the results produced from these areas.
Therefore to run your business successfully management information is vital – whether financial, operational or organisational.
But to be effective, that information has to be timely and regularly available when and where it is needed. It must be accurate so it can be relied upon. It must be complete giving you everything you need. It must be relevant such that you are not overloaded with superfluous data and it has to be easy to understand so there can be no risk of misinterpretation. Finally it needs to be quick and cost effective to produce so the energy you expend producing your MI is not greater than the benefits you will receive from its use.
Of course, as a business leader you still have to make the decisions but by measuring and recording the results from all areas of your business, understanding the results and acting on them you’ll find you make more effective and informed business decisions.
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