Getting Management Information Right
Getting the right management information and key performance indicators (KPIs) in the right format at the right time is vital to controlling a business. However, there are many common problems encountered on the road to getting this right.
Management information can easily contain too much data and no information or insight. It can be purely financial and oriented on historical information without forward looking operational and commercial indicators. There is often a lack of detail regarding cash.
During strategic discussions management needs to understand and have access to data about underlying business drivers. There are often too many anecdotes when what is needed is information supported by facts.
When forecasting discussions should be about “number of orders” / “price” / “improved churn” rather than “revenue will increase by X%”. Comparisons should be to past operational trends.
High quality information should free up management bandwidth – often too much time is spent analysing and understanding performance.
Most importantly, there should be one version of the truth to which everyone in the business is accountable.
The process of improving management information and KPIs begins with understanding the current reporting processes and how management promotes efficient and timely reporting.
It is then possible to evaluate the alignment level between current KPIs and business performance. During this phase it is important to consider the current state of IT and the data it generates, and to conduct a full assessment of systems, tools, and methods.
From this flows a gap analysis between current KPIs and best practice, and a subsequent compilation of the most relevant, company-wide KPIs.
It is then time to develop and deliver the changes identified across process, people, and technology to enhance the management reporting function and its use of financial, operational and commercial information.
If you are in need of help with your management information, or unsure whether there may be unseen possibilities to exploit in your use of data, please get in touch for a free initial meeting.