Markets are becoming increasingly competitive as institutions fight for profitable business, and as technology and de-regulation allow other organisations to enter the markets. This creates a need to be able to review existing performance in relation to the external environment and to identify ways to improve revenues or refocus costs to create greater profitability in both the short and longer term.
The need for focused management information is becoming one of the keys to competitive advantage. The challenge is to know what information is useful and how information needs can be met.
Management can only manage what they can measure, and measurement requires the continual provision of information focused on the key decisions to be taken to direct and guide the organisation. The key to knowing what information is required is, therefore, to understand what should be measured.
It has been said: "Computers have promised a fountain of wisdom but have delivered a flood of data". To provide effective management information systems with that "fountain of wisdom", the systems must be based on a consistent foundation of cost effective, timely data and be able to produce user friendly information to support the management of the organisation. They can provide a competitive advantage if they show the multi-dimensional analysis necessary to segment and manage the business.
Dimensions of information should include:
- Budgeting, planning and forecasting
- Activity based management
- Customer management
- Product profitability
- Performance management
- Integrated information
All information should be sourced from an integrated system which provides a single version of the truth throughout the organisation.