Management Information
What is management information?
I think of management information as being the least amount of information that
will enable good decisions to be made reliably. It is not a lot of information ...
just enough information so that a good decision can be made.
There are several levels of information: (1) data; (2) information; (3) Intel.; (4)
knowledge; (5) wisdom. They are all part of a family, and the best results are
achieved when all are in play together. Management information is a subset of
all of these levels, optimized to have the most value at the least cost.
The value of management information
Management information only has value if it is used ... and if it is good enough
so that good decisions can be made. Information that has gone through the
media edit and selection processes is rarely of much management value.
Management information is valuable not only when it informs with good news,
but also when the information advises about bad things. Whatever the facts,
there needs to be information, and there needs to be a way for the information to
be used to make decisions and make things better.
Good for planning
Management information is good for planning. Plans need to be prepared based
on a solid understanding of the situation ... something that is best done with an
appropriate set of management information. Planning is not done well when it is
merely a set of scenarios sitting on top of almost no information about the
situation, and planning is not the mere collection of information about the
situation, and rather little analysis of alternative possibilities.
Good for monitoring performance
Management information is excellent for monitoring performance. A good plan
will call for a certain level of expenditure and a related amount of activity and
result. Measurement of performance, and the resulting management information
facilitates comparison of actual performance with the planned or anticipated
performance. It is then easy to see whether or not performance is worse or better
than expected, and as a next step, it is possible to get an understanding of why
there are differences between the plan and the actual.
Good for identifying improvement opportunity
Management information helps to clarify key aspects of performance ... if actual
is better than plan, and there are some reasons for this, how can these reasons be
integrated into future planning and ongoing better performance. Management
information needs to feed into analysis and feedback and the planning and
implementation of improved performance.
Good for oversight
Management information is good for oversight. If everything is going according
to plan, based on review of management information, then there is little need for
additional physical oversight, but if the management information shows
performance issues, then the use of physical oversight might be appropriate.
With management information the oversight effort can be used to best effect.
Good for coordination
Management information is good for coordination. Coordination is easy when
there is an adequate framework of information. The basic information that is
needed to support the coordination work is information about the community,
the activities going on in the community, the projects, their funding, their
location, and so forth. By making the community ... the place ... the anchor for
the information, the relief and development activities can be related to a
location, and efforts made to get a fair geographic dispersion of activities around
the country.
Good for monitoring and evaluation
Management information is good for monitoring and evaluation. Many of the
issues that are addressed in a monitoring and evaluation exercise would
normally be included in a good set of management information and be available
in a timely way. In many situations good management information would make
the need for monitoring and evaluation redundant.
Accounting Information
Accounting provides a lot of information
Quite simple accounting provides a lot of information. Accounting should not be
just a vehicle for authorizing disbursements, but also a tool for managing funds
and managing performance.
Rather simple analytical methods will provide a lot of information about how
resources have been spent. At organizations like the IMF, this is sometimes
referred to as analysis by economic classification. In the corporate world there is
usually a code of accounts that provides a breakdown of costs in ways they best
suit the organization.
A little bit more analysis and all this information can be available also for each of
the cost centers or the activities of the organization.
All of this is from a standard accounting system.
More analytical information can easily be obtained
More analytical information can easily be obtained to start to understand more
about the performance of the organization, and the performance of the
individual activities. I used to refer to this as key item control ... we used to get
some key measures that would be usefully related to the costs to get a measure
of how we were performing.
The key items were always the most relevant to the work that was being done ...
in one department it might be something to do with the way the trucks were
running ... in another department it might be related to the production of
castings and the use of energy. These measures all helped benchmark our
performance, and we were able to stay in control and make changes that
resulted in practical improvement.
But what about value?
In the end however, what we are trying to create is durable socio-economic
value, and this is not easily calculated by reference to classical accounting.
However, one of the best ways of getting at value is to have a good
understanding of what good is being created as a result of the activities ... and
then using accounting common sense to put values on the outcomes.
Performance Information
Some of the best metrics are the simplest
A good place to look for examples of performance metrics is in sports. In
competitive sport, it is all about measurement. In individual sports, the metrics
are usually very precise but many are quite simple. In team sports some of the
measurements are very sophisticated, but very much understood by the fans.
There are also a big range of measures in most corporate settings. The main
measure may be profits, profit growth and stock value, but there are all sorts of
other measures throughout the organization so that everyone can monitor
performance and work to improve it.
In general terms the relief and development sector, government and the public
sector are woefully behind in measuring performance. The prevalent data is far
too aggregated to be of any real value in measuring performance .
Cost, price and value
Cost, price and value are very basic measures, and very useful to have for any
activity. How much does something cost is a very basic element of information,
and there is no excuse for not having this information about all activities.
Price is normal in the for profit world, and again is an easy element of
information to have.
Without going into too much detail, the difference between cost and price is
some measure of profit. In many activities that are conducted in connection with
social services and support, the price is zero ... the recipient of the services does
not pay anything.
But hopefully there is value, even where the price is zero. What is the value?
And how does this value compare to the cost? The difference between cost and
value is some measure of value adding.
Even though cost and value are of tremendous importance in measuring
performance, there has been very little systematic work to establish norms and
make them public.
Performance comparisons
Performance should be measured “relative to what?”. There are many different
comparisons that are possible including: (1) compared to a prior period or
previous performance; (2) compared to a different place or a different
organization; (3) compared to the best ever; (4) compared to the plan or to the
budget; and so on. Comparison gives perspective to the measurement.
Some measurements are useful without any reference to a money unit. Fuel
consumption can be measured in miles per gallon, and this gives a better
measure of engine performance than when the measure is converted to cents per
miles which will vary whenever the price of fuel changes.
The idea of profit in a corporate business organization is common. Its equivalent
in the not for profit organization should be value adding associated with any
activity and the organization as a whole, but this is rarely computed. Most not
for profit accounting systems are not set up with this sort of analysis in mind.
Accounting provides a lot of information
A good accounting system is a source of a lot of information, especially
information about costs. Integrating cost analysis with the general accounting
has advantages, but also can become too detailed and too clumsy. There are
techniques that can be used to get at useful information without getting buried
in detail, including making use of standard costs and doing variance analysis to
validate the standards.
Other source of data and analysis
In the corporate world industrial engineering, operations research, value chain
analysis and other approaches all help to build an understanding of how costs
behave and how operations can be improved to reduce costs and improve the
outputs. Something similar is needed in the relief and development community,
and something similar is needed in Iraq.
Bottom of the pyramid
Results are best seen from the bottom of the pyramid ... how has the quality of
life of the ordinary person improved? How can this be measured in an efficient
way ... low cost, reliable, accurate, timely.
It seems that measurement of progress at the community level has potential. The
community is where people live, and it is the economic and social activities in
the community that provide most of the elements for quality of life. Measure
progress at the community level and it serves to measure the progress at the
bottom of the pyramid. If the community makes progress ... the people progress.
Progress must be converted in some way into value, something that can be done
using the balance sheet concept from corporate accounting. And the cost of
getting this progress should be ascertained from fund flows and the activities
that have been funded.
Socio-Economic Statistics
Accounting rarely uses statistics
Accounting rarely uses statistics ... rather accounts make lists and add them up.
A good accounting system will probably make several lists of more or less the
same thing and reconcile any differences ... and if they cannot be reconciled, will
find out what went wrong and then be in a position to ask some pointed
questions about how and why resources have gone missing. This is basic boring
work that gets control of money and other assets, and keeps control of them.
This may be boring ... but it is important work. And when it is computerized, it
is still important.
This contrasts very much with the statistics that abound in the analysis of socioeconomic issues. The same sort of accounting information is not available for
many of the measures that are interesting in the socio-economic arena, and
statistical methods are the only way ... but too often in my experience statistical
method is used where more basic techniques would have given better answers.
Massive amount of socio-economic data
There has been decades of work collecting socio-economic data, and there are a
multitude of profiles of the failure of development. The data on this are
overwhelming. It is disappointing to find that almost none of the data
concerning results is related much to the activities and costs that were involved
in reaching this state.
Massive amount of writing ... rather less numbering
There is a massive amount of writing, but not very much information about
costs and values. The writing is replicated and used for workshops and reports,
but rather less for decision making and the mobilizing of the resources needed
to make substantial progress.
When information become useful, in so many cases, it needs to be made secret.
The lack of open access to information means that poor performance cannot be
seen, and nobody is then held accountable.
We know the results are unsatisfactory, but we have very little ability to see the
information that would tell how much it has cost and how little has been done ...
and specifically who is accountable for poor performance.
Collection of Information
Getting facts ought to be easy
Getting facts ought to be easy, but it is not. The management information
needed is just not easily accessible, even if it exists at all. There are a number of
problems that need to be addressed, including: (1) the academic practice of
being secretive about the data; (2) the basic lack of relevant data collection; (3)
the practice of doing very small samples and using statistical method for
analysis; (4) the lack of any systemic framework for logical storage of data in the
public domain and easy access to this information.
Nothing here is new
There is nothing being suggested here that is new. The quest for more data has
been on the agenda for a long time. The difference is that we are looking for
decision making data, and not merely data that can be analyzed and included in
some ad-hoc research or annual publication.
Maybe a lot of information has been collected
One of the constraints on decision making in Iraq appears to be the limited
availability of management information and much depth of knowledge about
the country. I do not know how much information has been collected about Iraq,
but it is not easily accessible and I doubt that it is the sort of information that I
would want to make decisions about making progress in Iraq.
Maybe a lot of information exists but few know it exists, where it is and how to
make use of it.
As much as possible, collection of data done for one purpose can be used for
other purposes. Data that are collected initially to make local implementation as
effective as possible can be used to provide information at a more aggregated
level. Data that are needed for the best possible implementation are normally a
lot more comprehensive than the reporting that is needed for donor oversight,
and it should be relatively easy to format the information in a range of different
ways to satisfy a number of users.
High cost to collect, low value unless used
Information costs a lot to compile and analyze. It is ridiculous that the
information and knowledge about development should be so difficult to find
and use. As it stands the cost of information is very high, and because of its very
low utilization for development planning and implementation it is low value.
Think value management
Think value management and cost effectiveness in any work done related to
data collection and information analysis. Constantly looking for the best
relationship between resources used and value realized will result in better
knowledge for development.
Small samples and statistics is not accounting
The practice of doing very small samples and using statistical method for
analysis is academically satisfying, but in terms of accounting and management
information it is unsatisfactory. Decision makers need very reliable data, and
statistical method only gives this in limited circumstances. It may work for
research, but for management unreliable statistics is a poor substitute for a
modest amount of good accounting information.
Data Design - MetaData
Organize the data
There is a need to organize data and start to get it into the relational format so
that it can be accessed easily by anyone with a basic knowledge of SQL.
There is a need for logical organization of management data. There is no widely
used logical organization of management data for relief and development
decision making. There is no universal metadata system so that the data are
comparable.
There is text ... a lot of it. There are few numbers, and the numbers are difficult
to understand. Until the information is organized so that it has the
characteristics of management information, it will be difficult, if not impossible
to get a relief and development sector that is driven by facts and especially facts
about performance.
Incredibly badly organized
In the international relief and development sector, there is a lot of data, but most
of it is incredibly badly organized. There are a very large number of different
database systems in use and almost no compatibility and coherence between the
different sets of database tables. There are a large number of data collections that
have been compiled using spreadsheet software without consideration of the
(meta)data design and long term implications of spreadsheet data
administration. On the other hand, there are data stored within very
sophisticated and expensive systems that could just be as well be in a simple
spreadsheet environment.
Need for database design improvement
There is a lot of data, but little of the data are organized so that the database
structures can be used in an easy and analytically powerful manner. Even some
of the most well known large international organizations still use disorganized
spreadsheets as their “database” more than 20 years after the relational database
model was adopted for large scale information management. There are a lot of
data hidden behind software that is good, but too expensive for most people to
be able to afford, including most of the GIS software.
Use database technology
Modern database technology enables information to be much better able to be
stored and retrieved, but use of the technology should not limit access but
improve access. Much more use should be made of the relational model for data
storage, and there needs to be much more training in how to design efficient,
easy database systems with proper normalization.
Data Quality and Reliability
Problem of misinformation
There is a problem of misinformation that manifests itself in many ways. Heavy
reliance on aid for most of the last two decades has created a need for a
continuum of crisis in order to sustain the community that benefits from the
crisis industry. This is unfortunate, and makes it difficult for true development
success to be recognized and success replicated.
Drought ... or Just a Dry Spell?
In the past few years there has been dry weather in Niger. It is difficult to tell
whether this was a serious drought crisis or a mere manipulation of the information
so that the donor community could mobilize emergency assistance when it would
have been better to use resources in a more developmental fashion.
The data and the presentation of information are easy to spin ... and the result is
poor decision making, and continuing failed outcomes.
Use peer review to reduce bad information
There needs to be quality control over information on development and socioeconomic progress. One way to get better information is to have systems of
feedback so that there can be comment about the data and some sorting out of
data that are valid and data that are unacceptable. This has some of the
characteristics of peer review.
Use the data ... they get better
When data are used, the data are rapidly improved. People will not tolerate
criticism based on data that is wrong, and they will explain exactly what is
wrong, and what would be right. Correct the data based on this feedback ...
correct any systemic data management problems if that is needed. Soon the data
and the analysis will be improve, at which point people getting criticized are
faced with good information, and perhaps really poor performance that needs to
be improved.
Easy Access to Important Information
Secrecy ... hiding corruption and inefficiency
By having easy access to important information, there are all sorts of good
benefits, notably making corruption more difficult and making inefficiency less
acceptable.
Easy access means more than putting information on a website ... though that is
better than nothing. Easy access means that the information can also be seen in
ways that are meaningful.
Important information ... or management information is not have one little bit of
information in a multitude of different forms ... it is about having rather little
information in a way that is useful and tells the story clearly.
Reports ... report design
Easy access to important information is probably best obtained from well
designed reports. Easy access to important information implies that information
is being delivered in some form of report ... not merely as a bit of information
that still has to be related to a lot of other bits of information in order to have
much meaning.
Repositories to facilitate easy access
Knowledge about development should be available both in public and private
institutions. It is much more cost effective to have multiple copies of information
than to have to recompile basic information.
MetaData ... and organizing data
Having a strong organizing function for the data can go a long way towards
getting the information into a form that is easy to access and produce useful
management reports.
Academic Community
The academic community and information
The academic practice of being secretive about the data, though promoting the
conclusions derived from the data, may be something to do with the way in
which academic credentials are evaluated and awards made. The effect of the
practice is to make use of data much more difficult, and the reduce the socioeconomic value of the academic efforts.
The academic community has a key role to play
The academic community is a community around a common interest. In another
context I have written rather unfavorably about the academic community.
A View of the Academic Community
The academic sector has several important impacts on relief and development
performance including:
- substantial use of relief and development funds;
- a substantial influence on thinking and public perception about relief and development;
- a big role in “teaching” relief and development to students and future policy makers; and
- being controllers of information about relief and development.
The academic community has a challenge to show that its work in the relief and
development area is net value adding. There is some evidence that relief and
development resources are being used to a considerable extent to fund academic
programs while there is little tangible benefit at the community level in the “south”
where needy beneficiaries live.
But in the situation in Iraq the academic community has a huge and urgent role
to play. There is so little knowledge about Iraq in the world community ... and
without knowledge it is wishful thinking that policy will be optimized.
Accordingly it is important that academics in Iraq become as much engaged as
they can be in helping well-wishers to understand the depth of the culture and
the issues that bring Iraq together and might possible make it break apart.
For our part, that is the international community, we should make it possible for
Iraqis to talk about their country in as many places as possible and help with
better understanding of the possibilities.
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