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 establish how your organization operates. They are processes, usually combining actions performed by people and some form of automated application, organized in such a way that they meet a given set of business objectives. Such systems can usually be carried out without direct action by the company founder/owner, over and over again, in the most efficient way possible.

Process examples might include how your staff should answer the phone, receive and transmit messages; the procedure for picking, approving, placing and receiving orders; the process of generating, consulting and sending customer invoices, as well as receiving payments and monitoring pending invoices, etc.

Regardless of the size or type of your business, you probably already have procedures in place that cover many functions within your organization, 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 founders/owners of companies usually have in their heads, and have not managed to capture on paper.

Why implement enterprise systems?

There are many reasons and many benefits to having systems in place and documented 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. Provide a better working environment for your employees, as an effective system will help clarify roles and responsibilities, as well as provide staff with some guidelines to refer to.

5. They ensure compliance with legislation, security regulations or any other legal requirement specific to their type of business operations.

6. They give your business the ability to expand and facilitate business growth by making your business more attractive to any potential investor or buyer.

What system works best?

While there are similarities in many functions, such as accounts, human resources, sales, stores, logistics, etc., unfortunately there is no perfect system that works for all businesses. Any system will need to integrate the business objectives of the company, its people, and the way it provides its products or services.

It’s important to have a well-designed system, customized for your type of operation and thought of by people at all levels within the organization.

All employees are more likely to follow such a system because they have been involved in its design and understand the value of having a system in place 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 lead to 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 in documenting the processes they are following.

Likewise, employees who have been trained on your business systems should also feel empowered enough that they don’t feel like they just have to follow a certain script without using their heads.

For this reason, it’s important to encourage feedback not only from your customers, but also from your employees and use that feedback to continually review, improve, and develop your business systems.