Getting reliable management information

As businesses are affected by greater turbulence in the marketplace, management teams have an ever greater need for reliable information in order to make timely decisions.

However, too often, companies use the same reporting templates and key performance indicators (KPIs) regardless of changes occurring in the external environment which affect their business models – the ‘we have always done it this way’ syndrome. In addition, the information that management teams rely on to make decisions is often received late and based on historical data.

As the pace of change and turbulence increases during uncertain times, it is more important than ever for companies and their management teams to ensure decisions are grounded in reliable information and made on a timely basis.

KPIs and critical reporting templates should be reconsidered and revised in light of changing circumstances. Increased emphasis should be placed on:

• managing a smaller number of more reliable parameters – less is more;
• accelerating reporting processes in relation to the new/amended critical KPIs;
• implementing more frequent reporting of new/amended/ critical KPIs;
• more regular exposure for Board/senior management teams to critical KPIs;
• cash and liquidity indicators;
• forward-looking indicators;
• enhanced reporting on areas perceived to be higher risk to the organisation;
• concentrating on those areas that really make a difference – increased accountability of everyone associated with new KPIs; and
• communicating more widely and regularly to enhance buy-in and accountability of what really makes a difference.

• Which areas need to be monitored carefully?
• How often do I receive information on those critical areas? When do I receive it?
• What is my degree of confidence in the information I receive?
• What are the key risk areas surrounding our business? How should we monitor our performance against these risk factors?
• Is my business focused on cash management?
• Is the senior management team updated frequently enough in order to make the right decisions?
• How can I get critical information more quickly, i.e. before it is actually out of date or irrelevant?
• Have I reviewed our reporting templates in light of recent changes in my business/the external environment? Does the information still make sense?
• Are we looking at the past? To what extent are our systems geared to providing useful information on the future?
• Thinking of the last big issue I had to deal with - could a more focused reporting of key risk areas have helped me identify or mitigate it earlier?