It’s Monday morning. Your report has lots of data and charts, but is there only one number you look at? Then your Management Information (MI) is not doing its job.
In a data-driven industry MI should be the first indicator for opportunities and the first warning sign of threats to your business. Whether through highlighting exceptional performance in certain segments, or accentuating operational inefficiencies, MI should be giving the Management team the Information they need to steer the business in the right direction and spark up the right conversations, not just provide an unrelated set of numbers.
Here at TDX we, as Analytical Consultants, have reviewed MI capabilities within multiple sectors. Often it is simply a set of numbers and chart which don’t provide the full story - is the line on chart 4 going the right way? What does it mean? How does it correlate? MI should answer these questions by being:
1. Accurate – it goes without saying, but MI is worthless if it’s not accurate. Discrepancies between MI and data are not uncommon, but I have seen massive amounts of time focused on chasing red herrings in MI. When MI looks wrong it’s usually one of three issues: bad data, incorrect analysis or a poor assumption. Data should be swept often for erroneous entries, looking for outliers will keep your MI in good order. Incorrect analysis may not seem wrong until someone points it out, so keeping an active communication between MI developers, analysts and end users is essential to maintain quality. Sometimes the assumption being made by the end user is misguided and a widely held belief within an organisation can be disproved with accurate data.
MI should drive assumptions within the business, not be driven by them.
2. Relevant – Your analyst team loves making charts. Not all of them are needed. I don’t think I have been in an MI review without someone saying ‘just skip that one’ about a chart with nothing on, or showing a figure that doesn’t make sense. MI should show you what you need to know, if you are asking for the same piece of information on a regular basis, then it should be part of your MI. If you never look at it, or it’s known to be a flawed metric, it shouldn’t be there.
Keeping your MI focused is crucial, with the ability to drill down for those who really need to understand a specific area.
3. Accessible – How easy is it to access your MI? Is it stored centrally? Can you access it out of the office? With today’s technology it has become more commonplace for MI to be hosted online, even using mobile apps to display your company’s MI. By removing it from simply being a spread sheet on the shared drive, to being able to access it when and where you need it, can transform an ignored report into a powerful management tool.
MI shouldn’t be a secret, and needs to be available to those who can use it to enhance the day to day performance of the business.
4. Refreshable – it may be obvious, but MI needs to be kept up to date, sometimes even directly linked to a live system. If you can stop problems as close to the point of origin as possible you can save a lot of headaches later on, especially for operational managers and colleagues. Having daily MI can be a real benefit in the debt industry.
Seeing the performance of a campaign right away can enable focus to be shifted to maximise returns or minimise losses.
5. Maintained – Ideally, MI should be reviewed every 6-12 months and questions asked such as: have the business goals changed? Is performance viewed differently? Is overall cash now more important than liquidation rates? MI can become stagnant and irrelevant if left to run in the background as an after-thought. It is often the case that analysis projects that start as a one off piece of work become relied upon , in preference to the automated MI, this can create real bottlenecks to your analysis resource, with analysts replicating work rather than investigating new opportunities.
Take the time to review your MI metrics and you can free up resource in the long run for your analyst team to deliver real insight.
By considering these 5 general principles, you can transform a humdrum MI report into a powerful and reliable tool. Take time to develop your MI and keep it in good order, and it will quickly become your first port of call for answering questions and assessing business performance. So, next time you look at MI, think about if it is delivering, if not, maybe it’s time to rethink those tired old tables and charts.
By Stephen Hallam, Value Analyst, TDX