The Importance of Business Systems

“If you can’t describe what you are 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 setting out how your organisation operates. They are processes, usually combining actions taken by people and some form of automated application, organised in such a way so as to meet a given set of business objectives. Such systems can generally take place without the business founder / owner’s direct action, over and over again, as efficiently as possible.

Examples of processes may include how your staff should answer the telephone, how they take and pass on messages; the procedure for raising, approving, placing and receiving orders; the process for generating, checking and sending out client invoices, as well as receiving payments and following up on outstanding bills etc.

Regardless of the size or type of your business, it is likely that you already have set procedures in place covering many functions within your organisation, which employees follow out of habit or as directed by their supervisor / manager.

Business systems are the manual for your business; the “know-how” of any business that many business founders / owners usually hold in their head, and have not got round to putting onto paper.

Why implement business systems?

There are many reasons and just as many benefits for 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. They improve consistency: production, delivery, customer service, after-sales care etc.

3. They improve results and/or productivity, because you and your employees don’t have to re-invent the wheel every time.

4. They provide a better work environment for your employees, as an effective system will contribute to clarifying roles and responsibilities as well as providing staff 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 give your business the ability to expand and they facilitate business growth, as they will make your business more attractive to any potential investor or buyer.

What system works best?

Although there are similarities across 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 objectives, its people and the way it provides its products or services.

It is important to have a well-designed system, customised to your type of operation, and thought out by people at all levels within the organisation.

Such a system will be more likely to be followed by all employees, because they have been involved in its design, and they understand the value that having a system in place 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 – is likely to lead to an under-performing business. On the other hand, great systems without good people won’t work either, hence the additional benefit of involving employees in designing a system, or simply in documenting the processes they are following.

Equally so, employees who have been trained in your business systems should also feel empowered enough so that they don’t feel they just have to follow a given script without using their head.

For this reason, it is important to encourage feedback not just from your customers, but also from your employees and to use such comments to review and to continuously improve and develop your business systems.