KLL is a large health and fitness complex located in a capital city. Started seven years ago, the business has been profitable. The introduction of a much wider range of activities over the past few years has led to increased complexity of administration and difficulty in interpreting the rapidly growing basic data generated daily. This data remains largely unstructured and this in turn leads to uncertainty in decision making.
The present management information system (MIS) is able to produce monthly reports on the performance overall but can only break down the key indicators of revenue and gross profit into six broad categories: water sports, sports hall activities. fitness training, beauty treatments, squash courts and outdoor sports. Thus there is no detail on specific activities such as table tennis, sauna room, badminton or soccer. The managing director and the board cannot distinguish the profitable activities from the unprofitable ones. The managing director tells the board 'we must have a management information system that can cope with our complex business; there are so many variables it is becoming impossible to make decisions with confidence. Sometimes we have detail we cannot interpret and sometimes we simply do not have enough good information'. The finance director points out that 'the staff are doing their best but they have limited technical knowledge and the software support company is often slow to help'.
Recognising that it is important to build an MIS to serve the company well into the future, the board decides to ask you to submit a proposal to them for a new system.
Required
a) Prepare a memorandum to the Board explaining the main purposes of a new MIS and the benefits the company could expect such a system to bring.