All businesses are complex in nature, and the degree of complexity varies from company to company. The activities are never as simple as moving from point A to point B but rather is best shown as an intricate web of processes. These web of processes are termed as what people commonly know as “business operations”. In this article, you will be able to have an understanding of what business operations is, its significance and purpose as well as the functions. Whether you are looking for a career in bizops or are looking for a way to streamline communications in your company, this article is for you. Here, we will
provide you with a general understanding of business operations and a few tips that can be applied to all companies.
Introduction to Business Operations
Operations first begin as statements, to explain purpose and goals to those in the business. They allow business plans to function as a rough guideline and help both founders and investors get a better sense of all the variables in the organization such as employees, logistics, and processes required to increase the company’s value.
Yet, this only explains the theory side of operations and acts as a failsafe to make sure that companies do not burst their budget and communication is effective between departments. In practice, errors must also be considered.
The operations of each business also differ based on the product manufacturer. The length of the supply chain depends on what the manufacturer produces and the number of employees can also vary based on the number of automated processes. The location of the store is also another important factor to determine what the business requires. Brick-and-mortar stores will need a suitable location to boost sales while e-commerce sites will need a good software platform.
The operations can also evolve as the business expands. If a business grows without the operations doing the same too, glitches in the system may start to appear. Similarly, more employees are also required. It may not be ideal to overload a singular employee with too many responsibilities and pressures as errors and mistakes will most likely occur. This leads to a cumulative effect of glitches and errors which may lead to a large destructive outcome. As such, all departments have to consistently improve and adapt to the increasing scale of the company.
Business Operations in the Context of a Company
As mentioned above, strategies and processes differ from business to business and can evolve as well when a business grows. Yet, some guidelines can be applied to growing businesses universally. Here are some tips that organizations should follow:
- Build a solid foundation from the beginning — an effective team that is propelled towards a common goal.
- Encourage transparency in communication inside a department and across departments. This prevents errors and miscommunications from occurring which increases productivity and efficiency in the short and long term.
- Hire employees and allocate tasks based on the right qualities and skillsets.
- Engage your data when you’re making decisions. By interpreting your data correctly, it increases the likelihood of success and eliminates variables that may distract your decision process.
- Include the thoughts and feedback from your employees and stakeholders. Many founders and main stakeholders may not be fully aware of all the details of your core operations which leads to less optimal decisions made. By communicating with your employees regularly, you improve the decision-making capabilities of your staff.
- The customer is king. Never underestimate or ignore your customers as they are your primary stakeholder to ensure your business is a success.
- Set a long-term plan. Excellent planning and the ability to adapt to external factors can prevent your company from being shaken easily. Instead, it results in the continued success of your organization.
Significance and Purpose of Business Operations
The efficiency of operations can directly impact the success of a company. However, this brings about the question of what is the purpose of the processes and what can stakeholders expect from a good plan and proper guides?
The answer to this is that they can expect their company’s value to increase as it profits from a bizops’ success. The profit comes about when a business performs well financially and the returns that come back exceed the initial investment. The value of the company increases exponentially if the profit is constant in the long run.
Companies do have to be aware of what’s happening in the market in order to register a profit. Businesses with superior products and services will soon thrive among their competitors. Additionally, the investment made into its products and services should also be considered. A business can only be successful if the following list of things is met:
- Demand for the product or service is high
- The company can afford the investment
- The productivity of the company is in line with the demand
Functions of Business Operations
The operational functions are similar to the operations itself as both are consistently evolving. The stakeholders and founders of the company play a huge hand in deciding the way functions perform. There are also other factors that affect the changes such as the responsibilities of each department, the level of streamlining, and the effectiveness of the leaders in overseeing and adapting the business operations. Yet, some functions still remain universal across the various businesses. They are:
- Striving towards a common consensus and ensuring effective communications
- Mentoring, coaching, and tutoring to train senior-level management
- Auditing and redesigning business processes
- Balancing the departments to maximize performance
- Overseeing the budget and planning processes strategically and within departments
- Making sure there is compliance by reviewing contracts
- Doing due diligence research and guiding third party stakeholders
Finally, the most important factor in business operations is the people. We’ve addressed the various functions of the business operations but ultimately the efficiency of processes is introduced by the employees that are capable and a good fit for their jobs. An accomplished operational team with a suitable leader can make use of the theory side of business operations to achieve amazing results in practice.