Given the current state of the world, circumstances are changing by the day and accurate management information is more important than ever. Casper Kaars Sijpesteijn explains how you can ensure you're basing your decisions on strong foundations.
The importance of relevant, timely and accurate management information is a necessity for any firm. Yet, this is often challenging because of the expectation that historic reporting will be repeated, overlaid with increasing volumes of newer data being available, accessible and included. Now, more than ever, management information, key performance indicators (KPIs) and data are coming under scrutiny.
This is driven by changes to market conditions, funders operating in an increasingly data-savvy way and finance teams juggling traditional responsibilities with running the business and steering strategy.
In the current environment, your finance teams are expected to guide your company through these time-pressured decisions, while dealing with business-as-usual and any other crisis in play. Thankfully, there are three steps you can take to ensure your finance team can provide the necessary management information:
1 Make time to work on management information
Consider how often you need to sample and share management information. Likely you don't need to report everything as often as you do. In the modern age, you can automate much of your reporting and allow stakeholders to access the reports directly, rather than you having to present the information to them and explain the data.
2 Ensure the remaining metrics are relevant and digestible
Your management information should always be viewed through the lens of your strategic objectives, issues, risks and profit drivers. Cascade these metrics from the top to the bottom of your organisation, so your whole team are aligned.
This will allow you to present the information that's relevant, offering a narrative of 'what happened', 'so what' and 'now what', rather than an abundance of minute details. Include a range of measures over customers, how well you run yourself, employees and finances on a lag and lead basis.
3 Understand management information and KPIs
Be clear on who 'owns' a calculation and its data source, and is, therefore, accountable and responsible for ensuring the most appropriate data sources are used and any issues and risks in the data are identified and communicated.
Taking management information wider
The above three tips can be expressed as part of a broader performance management framework. This shows the need to focus on the link between purpose and data, and shares the different enablers that let people work.
Performance management model
Enhancing your understanding of management information in a thorough manner carries other benefits too. This includes improving Companies Act compliance, InfoSec focus and GDPR conformity, as well as reducing repetitive discussions and analysis of data sources. It also partly sets you up for systems changes, not to mention, releasing the power of your employees by having specific, relevant information to achieve their goals.
Written by Casper Kaars Sijpesteijn.
To learn more about improving your management information, contact Simon Davidson.