What is the implication of an absence of management information? David Roberts take a look.
For businesses that remain heavily reliant on paper, the power of up-to-date management information is difficult to visualise. There can be something tactile and reassuring about files of paper and there’s always the fear of being swamped by terabytes of data.
Decades ago, in another life working at the sharp end of IT systems, I was engaged as a consultant to implement a shiny new system, it was known then as a ‘decision support system’. Personally, I like that term as it articulates precisely what was said on the tin.
Decision support - allow me to paraphrase: information presented in such a way that is meaningful and highlights to management areas of their business that need monitoring and support. The concept is simple: rather than swamp business managers with masses of data, present it in a meaningful way that supports informed decision-making.
An intelligently designed decision support system (management information, MI, business intelligence or BI if you prefer) will present information in a way that separates business data into:
- that which represents the norm or is inside acceptable business tolerance parameters, but more importantly highlights the business data that represents exceptions; and
- business data that is outside acceptable business tolerance parameters.
To put this into the context of investor suitability, what is the implication of an absence of MI? Without it, business owners and directors, as well as those designated with compliance oversight, are operating in the dark with potential problems just waiting to emerge and consequences for regulatory compliance, customer satisfaction or even FOS.
Let’s not overlook that fact that the presence of systems and controls is enshrined in the FCA’s business standards SYSC 3.2. In the context of investor suitability, an intelligent MI or decision support system will not only empower financial planning firms, but it is one highly visible way of demonstrating to an external compliance consultancy and even the regulator that the firm has control over its business processes.
Intelligent MI should be created as a by-product of a financial planning firm’s processes. Moreover, it shouldn’t cost more in terms of time or money.
If you were a compliance consultant or even the regulator, auditing a firm’s compliance to regulatory standards, what would you prefer to be presented with? A broad sweep of the hand and a sheepish smile gesturing that you have free access to inspect the contents of a firm’s bank of filing cabinets? Or a PC providing a dashboard display with all the information to hand with a click of a mouse? I know what I’d prefer and, I suspect, the regulator too.
The real power of dynamic and up-to-date MI is a tangible benefit and advantage to business owners. MI will give business owners an insight into the advisers working for them as well as the advice provided to clients. MI will contain intelligence that can be used to competitive advantage, improve a firm’s marketing, and above all, raise the levels of customer service and engagement.
Be assured, dynamic MI is an essential support facility that makes for more informed and therefore better business decisions.