Watch our video to find our more about the benefits of investing in your management information.
In the current economic climate, up-to-date and accurate management information (MI) can make the difference between a good decision and a bad one.
RSM should know. Alan Duley, finance partner at RSM, swears by the management information system that keeps him, and the entire firm, up to speed with everything that is going on across the business. As a consequence, the firm is right on top of its numbers: it has not called on its overdraft in more than 10 years; turnover has doubled in four years, and working capital is consistently sound.
Every day, business information flashes up on computer screens, traffic-light coded to ensure that urgent items are actioned; less important items are acknowledged and for-information-only items are read. The focus is on transparency – everybody sees everything. It puts people on the spot, but also instils good discipline. Any error, from employee timesheets to transactions, will be spotted immediately and put right. If there is a hiatus in billing, a phone call to the relevant person will quickly identify the reasons. It saves on fumbling through data to identify possible causes.
MI has helped RSM make strategic decisions, including the transformational acquisition of Tenon in 2013, its largest purchase to date. The bank, able to trust in RSM’s MI and its projections, understood how the firm would finance the acquisition. This gave RSM first-mover advantage, enabling it to quickly seal the deal. It also meant that partners’ time was consumed neither by the deal nor inward-facing admin, freeing them up to focus on clients.
To reap the benefits of MI, information flows must tie into business strategy and be sufficiently reactive to flex with changing demands. At RSM, acquisitions are integrated into the firm’s bespoke platform as soon as possible, meaning progress can be monitored against targets.
For professional services firms, which mostly sell their time, MI metrics include staff utilisation rates and hours spent on clients. The MI system at RSM is complemented by a commercial finance team and an IT team, to ensure that partners get the reports they need with the information they want.
Alan Duley is quick to point out that systems need not be all-singing and all-dancing, but tailored to the firm’s specific needs. He insists that return on investment (ROI) is almost immediate. If you can switch on the computer in the morning and get an up-to-date status on money in and money out, with any potential issues flagged, then time can be invested in growing the business rather than wading through numbers. If there is an issue, it is clearly identified and corrective action can be made. Upfront costs are quickly recouped from the benefits MI delivers.
‘Whether you are selling one person’s time or, as in the case of RSM, c.4,000 staff and partners’ time, the MI system can be tailored to your business metrics,’ says Duley. ‘It does not need to be convoluted or expensive, but simply based on what you need to run your business, and scalable for when your business grows.’