The role of management information in improving business performance is not new at all, but in times of uncertainty and in times of crisis its importance is so much bigger.
Every business has an accountant who prepares a profit & loss statements and a balance sheet. But this is not enough for a business owner to adequately manage a company or department. A business owner needs management information that provides data about the key value drivers of the company.
What was the revenue last month? Do you know how many receivables are 90 days past due? Do you know the turnover rate on your inventory and the performance of each of your sales representatives from last month? How about your employee productivity rate? What are the trend lines? If you don’t have quick answers to these questions, you need better management information.
A management information system, which is not just software, provides the reports that allow you to manage and improve your business. If sales are not meeting monthly projections, you have a meeting with the sales manager. If a few accounts receivable go 90 days past due, you get the finance director on the phone. A report shows that your employee productivity rate decreased, so you go to the production floor to talk with the production manager.
The purpose of the management information system is to set performance standards, which allows you and your managers to timely manage deviations from objectives set by taking corrective actions. In addition, its also allows you to further improve your overall business performance by raising the bar in terms of objectives achieved.
An effective management information system identifies and collect data on all the important metrics of the operations of your company and its key value drivers. For example, the management information system provides data on sales, customer profitability and on the degree of market penetration. Supervisors and employees receive reports about productivity, the number of sick days taken and payroll budgets. This data is used to evaluate employee performance and to find who is due for a raise. Manufacturing supervisors are kept informed with product cost analysis, scheduling plans and raw materials inventory levels. The management information system helps planners coordinate sales with production schedules.
Finally, a management information system helps your company become more competitive. It reports and identifies what is working and what is not. These reports give you the information you need to make decisions and improve the performance of your employees and your company.
Information is the life blood of any business. It is at the heart of business growth, which is why so much effort and resources are pumped into it developing efficient management information systems, and qualified professionals to help develop and implement them.
Curious as to what we can do to help you developing and implementing or optimizing your management information?
Please visit our website; https://athenapartners.eu/services, or contact us directly.