Promise of MIS 2.0, as Management Intelligence System

November 11, 2010 05:13 pm | Updated November 13, 2010 12:04 am IST - Chennai:

Collaborative decision-making, which taps into the knowledge that exists across all levels in the organisation, works wonders for root-cause analysis, and hence problem-solving becomes a regular affair, avers Poornima Sathy, JEO and Head of Operations, Distil Information Systems, Chennai (http://bit.ly/F4TDistilInfo).

With decision support systems cutting across the geographical and departmental divides, organisations can move to a truly democratic and data-driven culture, she adds, during the course of a recent interaction with Business Line . That, according to Poornima, is the true MIS 2.0, ‘Management Intelligence Systems.’ Our conversation continues over the email.

Excerpts from the interview.

What do you see as common problems in today’s MIS?

Businesses’ need to be intelligent is often not met by the archaic MIS (management information system) in vogue. Management information, which is often perceived as bulky reports, is a throwback from the days when scores of people worked on collecting and laying out data to be presented to the management for decision-making and corrective action.

Irrespective of who consumed the information, or what data are available with the company in their information systems, the MIS teams stayed back late hours and weekends in the 1980s and kept pushing out reams of paper filled with tables and numbers. These folders were often destined to head straight into the dusty filing cabinets across the company, in most cases the basement.

Computers helped in saving a few trees, the heavy folders became fat attachments sent through email. However, with the advent of computers and technology, the only change one saw in this part of the business was that the department churning out this information came to be called EDP rather than MIS.

Can you briefly describe the evolution of MIS over the decades?

Millions of rupees of IT systems for information creation such as ERP, finance, and sales management software have at best automated the entire process of data collection over time. Information consumption from these sophisticated means is still in a state that is woefully inadequate.

Here is an outline of the MIS evolution over the decades:

* 1970s - Report only on financial data; MIS manually consolidated and reported; circulated by post, or hand-delivered; purely post-mortem analysis, and used only for periodic reviews.

* 1980s - Financial and key business data such as sales/revenue captured; mainframe systems output into voluminous reports; too detailed to be of any use for decision-making; past-defines-future approach.

* 1990s - MRP II/ERP systems combined with bespoke financial applications, to report using spreadsheets; consolidation still a manual job (using computers, maybe); business analysis still nascent, reporting on financial parameters.

* 2000s - Integrated ERP and business intelligence based systems bring about combined reporting; output still stuck in the 1980s/90s; detailed business analytics still a far cry; analytics for decision-making remains a hype.

* 2010 - Age of decision support systems; collaboration and real-time analytics; advanced analytics for business insight, the necessity.

Where do you see MIS headed in the next 5 to 10 years?

MIS has transitioned from being an information dissemination function to an intelligence-generating one. The role of MIS is proactive now.

Corporates need to have the ability to not just tap into their own sources of data for decision-making, but use the Internet and other unstructured sources of information to be able to make better and timely decisions. Teams that work and collaborate in virtual offices spread across the globe need to be able to have access to the same information in real-time.

Systems and processes have to be able to provide for such needs 24x7. The ability to quickly predict the outcome, based on sketchy details, is a sure-fire winner in the present economy. So, collaboration and collective wisdom would be the key mantra for MIS in the near future.

Are there capabilities that organisations must ensure within, before embarking on next-generation MIS?

A data-driven management style is necessary for any organisation to be successful in this journey. Executives need to have faith in the data they have generated and be willing to use it for planning. The ‘gut’ has to start playing a lesser role in decision-making, or at best be supported by data.

Managers should come out of the mindset that MIS is not a precursor to statutory reporting. MIS has to be looked at differently. MIS departments need to learn that data have to be arranged differently for business as compared to the government or the auditor.

All these are structural mindset changes across the organisation and can be enabled only top-down. The ‘boss’ has to believe in this, and only then can any of these percolate deep into the organisation.

Would you like to discuss a few examples of how companies can benefit from management intelligence systems?

Data, by nature, hide more than they show. To make sense out of mounds of data is where the actual challenge lies for organisations today; because as has been shown in many cases, what separates the winners from the laggards is the ability to tailor operations and tactics, based on the business environment.

The time has come for MIS to grow from churning out the cookie-cutter information like ageing, DSO, ABC analysis, budget versus actual, and so forth. Let the MIS provide not just the “What” but also the “Why” and the “How”. Allow the data to speak to you and reveal unknown truths about your specific business.

Let us consider a few examples.

* A company has a top-rated vendor and procures around 25 per cent of its raw material from this single supplier who is a private enterprise. This is not only a control risk but also has a business continuity risk.

* A branch/retail outlet which is a top performer in terms or sales, always allows more than the average discount and is a below-par-performing branch when other parameters such as SKU realisation, staff efficiency are considered.

* While ‘A’ category items are often seriously monitored, many a time substantial savings are to be had from ‘B’ and’ C’ category items in the inventory, if only the decision-makers had enough and timely data regarding these.

* A complete analysis of the purchase department, in a particular case, revealed that purchases attributed to individual buyers had 200 per cent more discount as compared to purchases negotiated by the general purchase department with no specific buyers.

In situations such as these, it is imperative that the decision-maker moves from the uni-dimensional to the multi-dimensional view of the business and examines the facts from all relevant angles. This is where decision support systems come in handy.

Departing from the MIS of old, DSS renders information intelligently and unravels the hidden treasures at the click of the mouse button.

At the solution provider end, what skills and competencies become critical when developing such smart MIS for a client? Also, how far are such systems portable across, and within, sectors?

The solution provider needs to continuously deliver value on three fronts:

a) Keep pace with the trends in the business with a deep understanding of the nuances.

b) Be in line with the latest that technology has to offer in terms of network infrastructure, gadgets and devices. The frequency of game-changing technology is very high: How quickly we have moved from Internet applications to mobile computing and now the Cloud!

c) Constantly innovate within the space of intelligence and find newer models – be they about deep analytics, forecasting, predictive approaches, text-based analytics, and so on.

As regards portability, within an industry or sector it is most definitely possible because any industry does have its own set of common challenges. Across sectors, however, portability of solutions may not be a good idea because of strategic and operational differences.

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