MIS- what do we miss?

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Management information system (MIS) is one of the basic tool for management accounting. This tool is used to take conscious decision on Business Operation. Fundamentally MIS is based on Accounting however MIS is not only limited to the scope of Accounting, it can go ?much beyond. It can cover every aspect of Business. ?In other word, the financial and/or non-financial indicators which affect operations and help management to take decision are broadly covered by MIS. The transition of MIS to BI (Business Intelligence) is a progression of time with the advent of ERP. But in ?both the cases the process is a dynamic one. A particular Information which may be an important indicator for performance evaluation may not be required in changed situation and time. Thus new MIS tool and parameters are developed to capture revised time and situation in Business eco system. Eventually, MIS becomes a dash board to Business leaders.

However, throughout my working experience I have witnessed many cases, where the essence of MIS is missed in milieu of “Sales” driven Business set up, where accounts prepare the MIS from strictly Accounting data base and Sales/operations deny it on the pretext of inaccuracy and/or non-estimation of pain and profit. This tug of war takes place in monthly Business review meeting. In contrary, MIS prepared by operation team will have disproportionate low estimation of pain (in accounting term costs) on the given time scale along with current portrayal of better days (in accounting term returns). That is also not healthy. Essentially there should be a meeting place where MIS is accepted by all stake holders to take a collective decision. Sounds too utopian in low-mid, mid and high mid-range Business, where current performance determine payout, ensure continuous flow of credit and also determine its sustainability, which is expected to be captured from financial MIS. The big and established Business has an established MIS system which is not challenged as rule of the game. It is also a fact that their MIS is time tested and mainly used for directional diagnosis rather than performance evaluation tool. For that most of big companies have a separate arrangement.

So what do we really miss in MIS:

?A.???Direction: A successful MIS must give a direction of operation by analysing the facts and figures. We often get diverted, discussing accuracy of MIS only. However, it should be discussed on the basis of direction of Business performance. MIS unlike car dashboard gives direction rather than actual meter reading. Therefore, essentially if MIS is 85%-90% accurate then it should be adequately helpful.

?B.???Performance: All MIS is not performance evaluator, few are. Accounts department does not prepare all MIS either. Performance evaluator MIS are to be done and prepared separately. That should not be mixed with Business MIS. Directionally both should be same but not same MIS should be used. We often have a habit of correlating one MIS to other without understanding context of Business thus might lead to a complete wrong conclusion. Coming back from that point of mis-direction, it takes lot of management time and energy.

?C.???Decision: Moot idea of MIS is to take a decision and reasonable expectation is a correct decision. It is often seen that the meeting on MIS leads to evaluation of MIS preparation process and justification of process, thus leading to confusion. Depending on organizational situation these meetings are dominated either by Accounts team or by Operation team. However more desirable situation is a common meeting place where all functional team will meet and take a decision on a given direction. Fast and correct decision is the key to success. ?

D.???Action: Most successful Business is fundamentally based on regular, flawless, basic, rudimentary, repetitive Actions. The company which does it well survives well too. There is no intellectual acrobatics there. MIS must create actions, very quick actions so that any course correction can be done with minimum operational loss. However, more we debate mathematical accuracy of MIS instead of its indicated direction, more we miss valuable action. ??

?E.????Time: End of the day Time is common factor scale for all measurable operations. To a, time beater Business house, MIS is the compass, which shows the North Star. ?To be faster and smarter, Business needs to change its set MIS to judge its current operation and evaluate its direction. In my working life I have seen company, who had never changed its MIS format since last few decades as management is accustomed to reading that format. It’s a sure recipe of MIS obsolescence in a fast changing time. ????

?F.????Collective Decision: Finally, to have a successful out-come and action based on a successful MIS depends on a collective decision. It is very important in a Business setup to collectively decide the direction and own the out-come. Plurality in participation for decision making is the key to evaluate alternatives which brings eventually sustainable existence. As participation is the important feature of sustainable Business, MIS becomes the common tool to assimilate divergent views to a unified goal. However, top down Directive driven operation, does not need MIS, the its survival gets heavily impaired. ???

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So it appears, in regular operation we miss a lot if we do not use MIS as a tool, which is a corroborator of basic Business instinct and common sense. Most of the success comes for the first time through instinct and commonsense but to repeat the same, we need MIS and to repeat the same decade upon decade we need a robust BI which can indicate seasonality, and brings Business perpetuity. ??????????????