The importance of business systems
“If you can’t describe what you’re doing as a process, you don’t know what you’re doing” – W. Edwards Deming (1900-1993)
What are business systems?
Business systems are documented procedures that define how your organization works. They are processes, usually combining actions taken by humans and some form of automated application, organized in such a way as to meet a given set of business objectives. Such systems can usually be implemented without the direct action of the founder/business owner, again and again, as efficiently as possible.
Examples of processes might include how your employees should answer the phone, how they take and relay messages; the procedure for raising, approving, submitting and receiving orders; the process of generating, verifying and sending customer invoices, as well as receiving payments and tracking unpaid bills, etc.
Regardless of the size or type of your business, you probably already have established procedures covering many functions in your organization that employees follow out of habit or as directed by their supervisor/manager.
Business systems are a manual for your business; the “know-how” of any business that many founders/business owners tend to keep in their heads and fail to put on paper.
Why Business Systems Implementation?
There are many reasons and just as many benefits to having established and documented systems in your business, some of which include the following:
1. They provide a framework for your operations and an effective structure to support your business.
2. Improve consistency: production, delivery, customer service, after-sales service, etc.
3. They improve results and/or productivity because you and your employees don’t have to reinvent the wheel every time.
4. They provide a better working environment for your employees, as an effective system will help clarify roles and responsibilities, as well as provide employees with some guidelines to refer to.
5. They ensure compliance with legislation, safety regulations or any other legal requirement specific to your type of business operations.
6. They enable your business to expand and facilitate business growth as they will make your business more attractive to any potential investor or buyer.
Which system works best?
Although there are similarities in many functions, such as Accounts, Human Resources, Sales, Stores, Logistics, etc., unfortunately there is no one perfect, one-size-fits-all system that works for all companies. Any system will need to integrate the company’s business goals, its people, and the way it delivers its products or services.
It is important to have a well-designed system, customized for your type of operation and thought through by people at all levels of the organization.
Such a system is more likely to be followed by all employees because they have participated in its design and understand the value that having a system brings to the quality of their work and the service they provide to customers.
One point to keep in mind is that having great people working with poorly designed systems – or no systems at all – is likely to result in an underperforming business. On the other hand, great systems without good people won’t work either, hence the added benefit of involving employees in designing a system or simply documenting the processes they follow.
Likewise, employees who have been trained in your business systems should also feel empowered enough so that they don’t feel like they just have to follow a script without using their head.
For this reason, it is important to encourage feedback not only from your customers but also from your employees and use such comments to review and continuously improve and develop your business systems.
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