MANAGEMENT INFORMATION SYSTEMS
I have been using the descriptor ‘Management Information Systems’ more recently as I educate businesses on Knowing their Numbers and I noticed it isn’t in common use anymore. When I trained as an accountant in KPMG, MIS was the focus for many businesses. Why don’t we hear about MIS as often anymore?
Today we talk about Information Technology; IT is the overarching title for technology and information systems that we use to run and manage our businesses, otherwise known as MIS. The space is now heavily populated by different types of systems designed specifically for different aspects of the business cycle, industry specific, in the cloud, fully automated etc. Most business use an array of different tools to manage customers, manage processes, account for transactions, interact with Revenue, deal with banks; to name a few. In the corporate world it is possible to buy systems that integrate much of the business needs and other applications can be integrated with the systems already in place. System Integration is a dedicated service for many consulting businesses.
No matter what we call it, generating our business information efficiently and on a timely basis is essential to the smooth running of our businesses. We need to Know our Numbers. Many financial accountants become experts in information systems as the primary use for information is the reporting of the financial position in the company. However, it is often the technology that is driving the operations of the business that is the crucial technology. Most businesses operate some form of front-end technology for interacting with their customers and in the knowledge economy most businesses are built on technology.
For most SME or Growth businesses, it is likely that the technology used to run the operations of the business, to report on the business from a financial point of view and to administer the business are all stand alone. We have often found this situation in many significant sized businesses. It is not uncommon for in-house accountants or external advisers to be employed to make sense of the many sources of data coming to the management team.
In many cases information is re-keyed or ignored from one system to another. In a recent case we witnessed several HR systems being used to record daily time, record weekly and monthly time, calculate pay and benefits, process payment and make returns to Revenue. These systems were not integrating, and a significant amount of effort went into the process that could be removed by integration.
More regularly we see stand-alone front-end systems which have incredible reporting capabilities that are underutilised and as they don’t integrate with back end payments and accounting systems, there is significant time and effort lost in reporting on the business. Many businesses invest in the information technology but without spending time to set them up to utilise the information effectively.
An Integrated system is a must have for larger organisations and corporates but for medium and small businesses it has not been priority. With cloud technologies it is now possible for all businesses to have efficient integrated management information systems.
When profits are strong it is easy to build large IT and Accounting teams but many growing businesses don’t have the luxury of building those teams. Business is all about compromise.
If you want to get timely, accurate and relevant information so that you Know Your Numbers, you need a good MIS. If you want to run a successful business, you must demand good information from your systems.