Importance of Business System in Organizations
Business Systems and business processes are the essential building blocks of every business organization. Every facet of your business organization is greatly impacted by the business system.
A one shop business, a big warehouse, or even an office are the kind of organizations that can be managed, and their performance improved by applying the correct business management system.
Business systems are designed with the capability to connect all the intricate components of an organization.
The entire components are designed to work together for the achievement of the business strategy and eventual profitability.
When a business applies defined principles and practices to the systems and processes that deliver value to their customers, it is creating what is often referred to as a “business system.”
Creating effective business systems often unifies the problem solving and decision making of the organization.
Many common tools and methodologies are universally taught and expected to be utilized by all types of businesses that aim at mainstreaming efficiency.
The business system also encompasses how we lead our people and connect them to the operational strategy.
Why Implement a Business System?
There are several reasons to implement a business system.
Improving Top-Line Performance:
Part of the business system is the development and implementation of strategy creation, business processes and strategic planning throughout your organization.
Those foundational elements lead to a much more insightful way to investigate and grow top-line revenue.
In short, a business system takes care of your future. It ensures you meet your customers’ expectations and improve your brand, which is key to growing a healthy business.
If you use a systematic approach, your organization will have constant information on areas that need to be improved and you will begin to understand the unmet needs of customers.
Meeting Customer’s Expectations:
If you use a systematic approach, your organization will analyze measure, compare, and test all the possibilities of what your customers want and don’t want.
You will have constant information on areas that need to be improved and, even more importantly, you will begin to understand the unmet needs of customers.
A business system is key to improving the brand that the organization projects to your community, including customers, employees, and suppliers.
Whether we are considering safety, quality, or getting the job done in a timely manner, a business system is designed to give you effective, efficient, and repeatable results. In short, the business system gives you a “process to fix your processes.”
The goal of the system is to enable proper education and opportunities for all employees so they can complete their work more efficiently and effectively.
We also seek to harness their ideas and creativity and, in the process, increase their personal engagement.
Additionally, having the system in place allows you to quickly integrate new-hires, and makes it easy for them to see their role within the organization and bring forth new ideas.
Reduce Cost and Increase Profits:
It has been proven time and again that the implementation of a sound business system helps reduce costs, but so will many things.
A business system is intended to reduce costs without taking the shortcuts that often lead to an erosion of profitability due to the necessity to lower quality expectations or service levels.
Most companies in Kenya that have achieved huge success have set in place System of Performance Excellence that consists of four main areas:
Strategy—the way the organization thinks and plans
Processes—the way the organization operates
People—the way the organization leads
Technology—the way the organization connects and innovates
A business system focuses on the alignment of all activities to the customer perspective, from the strategy to employees’ day-to-day work, and installs value-chain-based thinking.
The Power of a Business System
When implementing a business system to enhance Performance and Excellence, there are several major changes that the leadership of an organization must appreciate to make progress.
Instead of assigning resources to projects based on financial priority, which means they can be spread all over, we assign resources to a specific site or value stream to work a series of projects.
This creates focus, achieving significant transformation in that value stream and allowing the local leadership team to become comfortable using new tools to solve problems. With this approach, we build up sections of excellence much faster.
Such a value stream approach also allows for a more systematic project selection process. We don’t want to be haphazardly selecting projects but rather working on initiatives designed to drive toward the achievement of the strategic goals and objectives of the business.
By installing a replication process, organizations can take an improvement implemented in one location and duplicate that to all of the other affected locations. This allows the whole organization to see results much faster.
A deployment dashboard summarizes all results to date and informs the leadership team of expected progress. This dashboard should be communicated on a regular basis. Results have to be measured and shared to sustain success.
Through a thorough Daily Management system in each value stream, we put in place depending on needs a tiered meeting structure, visual management boards, and leadership standard work.
Daily Management is the backbone of sustainability and is often where the most significant improvement opportunities are surfaced.
In addition to these quick-hitting changes listed above, we also expect to see, over a longer period, these other changes to occur.
Another part of the business system framework is creating a scalable and sustainable innovation ecosystem in order to create a competitive advantage.
The organization learns to address innovation challenges quickly, build a pipeline of innovation opportunities, prioritize ideas, and apply methods and tools for both front-end innovation and back-end design.
Along the way, the organization starts to see a shift in culture. While some change will happen naturally, other changes must be guiding and steered.
To effect positive culture change, the Cycle of Accountability and Trust guide us in forming a virtuous cycle.
With all of those changes taken together, you can see how a business system provides a framework for a constant pursuit of improvement and innovation, and a deep understanding of change and motivation.
At the end of the day, when you have all of these things in place, a sound business system gives the organizational leaders confidence in their ability to create the future.