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.
In or last article, “Measuring What’s Important” we discussed key performance indicators or KPIs. There are lagging KPIs such as financial measures that tell you what just happened and leading KPIs that indicate what your financials are likely to look like.Read More
Following on from our previous blog in this series, “The Most Important Thing”, the next step is to translate your goals into action. For this, setting your targets and measuring your performance against them is vital to making them happen.Read More
What do you want to achieve in your business? Every owner manager had their reasons for why they started out on that journey – what are yours? And more importantly, are they still valid, are you on track, or are your hopes and desires being frustrated?Read More