Open University Malaysia (OUM) is progressively moving towards implementing assessment on demand and online assessment. This move is deemed necessary for OUM to continue to be the leading provider of flexible learning. OUM serves a very large number of students each semester and these students are vastly distributed throughout the country. As the number of learners keeps growing, the task of managing and administering examinations every semester has become increasingly laborious, time consuming and costly. In trying to deal with this situation and improve the assessment processes, OUM has embarked on the development and employment of a test management system. This test management system is named OUM QBank. The initial objectives of QBank development were aimed at enabling the systematic classification and storage of test items, as well as the auto-generation of test papers based on the required criteria. However, it was later agreed that the QBank should be a more comprehensive test management system that manages not just all assessment items but also includes the features to facilitate quality control and flexibility of use. These include the functionality to perform item analyses and also online examination. This paper identifies the key elements and the important theoretical basis in ensuring the design and development of an effective and efficient system.