In a modern world with instant information at our fingertips, it can be overwhelming to run a business with bombardment of information from all angles. This is why it is so important to have accurate management information (MI) and a management information system (MIS) that allows you to process the information and act on the information provided.
What is management information?
Management information (MI) is information in regards to your businesses operations, big or small, such as monthly sales or market trends. There is not a standard list of information that is classes as MI, instead it refers to any data that is used to understand the current position of your company. What is classed as management information?
As mentioned above, management information can be any data required to understand the business to assist with decision making, this can come in a variety of formats.
Some examples of data that can be used for management information, include financial data such as cash flow forecasts or budgets. Other information that can be valuable to a company with their management information could include the number of customer service calls received, compliance reports, training records or stock levels.
What is the power of management information?
Management information is key to making informed decisions, when you have access to all the relevant data it allows a business to make future decisions without guesswork, or relying on instinct alone. In a turbulent economy with many unpredictable bumps in the road, it is essential for businesses to be fully equipped with the necessary information ahead of big decisions.
Another benefit to successful management information is improved efficiency, by analysing performance of your company you will have the opportunity to identify processes that could be improved, as well as the customer feedback and business performance measures to study the success of processes that have been put in place.
Ultimately, when a business is in a position to make informed decisions and improve their efficiency, this will lead to increased profits. It is important to note that management information refers to the collection of data, and that value to the business is only added when the information has been assessed and acted upon.
What management information should I be focusing on?
In business, there is a countless amount of information relating to every side of running a business. It is not valuable to collect every small piece of information, it is important to collect information that will benefit you when making decisions.
A good management information system (MIS) will collect data from several sources and collate these together to create reports, graphs and other valuable tools to assist with scrutinising your MI. The information that is of value to your business with differ from that of another business. However, there is some crossover and information that would benefit the majority of businesses include:
- Financial information, such as profit and loss and cash flow forecasts are essential to decision making.
- Sales data, information including what is selling and who is buying it will assist you with making decisions on new products and services.
- Inventory, in order to succeed a business needs to understand inventory and inventory costs.
- Productivity information, when you know how long a task or product takes to complete you'll be more informed when making decisions in regards to production processes and costs.
Accurate and relevant management information is crucial to the health of your business. Management information can shine a light on business problems to provide an opportunity to improve performance, as well as assisting with making important decisions about your businesses future.
If you are unsure what management information is relevant to your business and your industry, get in touch with our finance experts who can assist you with only collecting valuable information to help your business to survive and thrive.