The Importance of Good Management Information (MI) and Reporting
The significance and requirement of excellent operational detail (volumes, speed, performance indicators, controls, tolerances etc.) are vital to successful management of business. To be able to consistently make efficient decisions, a series of records and measurements is needed, and if they ceased to be accurate or effective can significantly affect the ongoing stability, and profitability of an organisation leading to poor management decisions.
The management information system can be found in many different forms depending on the business, cashflow and forecasts are obvious, but sales, staff turnover, sales activity, marketing results, supplier consistency can also be performance indicators needed to demonstrate the efficacy of the business. Many firms also use elements of worker retention numbers or consumer satisfaction rates. Ultimately though the term “management information system” suggests anything that can be used to aide in the secret choices that management need to make; nevertheless, that does not imply all details captured provide value, usefulness or are “good”.
What makes the MI “great”?
When thinking about whether the details obtained is in fact of a high quality and therefore any use to the business, there are the following 5 key points to consider.
- Significance: Take into account whether the details you have is actually pertinent to the company, however likewise to the staff member who will be using it.
- Authentic: To be able to utilise the information to make key decisions, it should really be authentic and precise info.
- Trigger: If it takes too long to get, or too long to be provided to individuals who need it at the right time, then it would not be of any use, for that reason it is necessary the collection of data to be utilised is set over a specific period; you can’t compare apples with pears.
- Pursued: For it to be great, then it should have the ability to be acted upon, if not then the time spent gathering was pointless.
- Documented: If the information gathered has not been examined or analysed, processed and recorded, it will create huge issues for the firm in the future if they try ro reference back to the measure or effectiveness/accuracy of what was provided. Poor records make future decisions impossible to make effectively and this would fail the SMCR “Reasonable Steps” test for SMFs.
management information report
Too much information and an avalanche of “performance indicators” is no use at all. Key Performance Indicators eed to be established and reviewed periodically (to ensure they maintain value). It is in combination of all these factors that comprise “good details”, however it depends on the management to choose which elements are more crucial that others, if there is an urgent requirement for information, then the weighting on the significance of it might eclipse the requirement for it to be documented, however this constantly depends on the environment, both from a business and regulatory perspective.
Why is a good management information system crucial to a service?
When the information utilised is of a high standard, it can allow a business to recognise areas for enhancement, or fine tuning keep track of the quality of operations, boost profits and evaluate strengths and weak points to enable time to be spent on doing what the company does best, and raise the bar on areas or processes where it might be failing.
In making essential choices, you need supporting evidence to be able to prevent making an ill-informed choice, and evidence that you had the best source of data, external regulatory or legal advice, for business success as well as SMCR reasonable steps. Bad or incomplete information can force you into making assumptions or even just guesses and this results in planning poorly or not react is adeqaute time to changes in business or the environment. The wrong choice can hold up a business, attract regulatory censure or enable rivals to get a benefit of your company. If you do not have any robust and accurate information at all you are just arrogantly gambling on the chances of your decisions being right and increase the danger of failure within your company.
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This guide is only an aide memoire and intended for information only for anyone appraising the documentation needed in an audit/compliance check. It is not to be considered as direct advice or intended to replace specific 1 to 1 engagement with your compliance and risk professional.
Other Posts In This Series
Compliance Audit: What To Look For In Strategy Document
Thoughts on Organisational Charts
Regulatory Complaint Handling & The FCA
Compliance Annual Reporting Requirement
The Importance of Good Management Information (MI)
Directors and/or Partners Responsibilities and Further Training
Compliant Financial Promotions – Advertising
Governance Risk & Compliance Frameworks
Thoughts on Organisational Charts
Regulatory Complaint Handling & The FCA
Compliance Annual Reporting Requirement
The Importance of Good Management Information (MI)
Directors and/or Partners Responsibilities and Further Training
Compliant Financial Promotions – Advertising
Governance Risk & Compliance Frameworks