What are the Advantages of a Systemised Business?

There are many challenges when starting a business. One of the reasons many fail within the first year of operation is a failure to systemise. Being able to efficiently and effectively make use of resources available is important for business success. This is best accomplished when a business has the right systems and processes in place to guide work.

If a business owner does not sufficiently invest in developing and instituting these systems and processes, mistakes are more likely to happen, leading to wastage of time and resources that the business can ill-afford to lose.

For more information on how to systemise check out this article “How to systemise your business”

Systemising a business will take real time and effort but is not as complicated as you might think. Not to mention it comes with a huge payoff that will allow for operations to be optimised and automated, giving your team more opportunity to focus on what may be more crucial to making your business a success. Your team will also experience a greater sense of purpose, as they will recognise that the work they perform is achieving a better, more consistent output.

When your business is properly systemised, other important aspects of the business, like product development and marketing can gain the attention they deserve. Keep in mind that depending on the nature of your business, different functions and departments may impact on your business success than others. Systemisation informs employees on what they need to do and how to do it. Nothing is left to chance as procedures have been put in place, ensuring accuracy and no wastage of time.

The processes allow for streamlining that keeps work organised and ensures enough time to attend to other important business activities. Essentially, systemisation creates more opportunities and freedom to focus on achieving the core goals of the business, by not having to direct as much effort to monitoring and managing poorly systemised areas of the business.

Benefits of Systemising your Business

Increased Efficiency

Business systemisation requires that you document processes and procedures. Outlining processes step-by-step will allow you to more easily identify mistakes and unnecessary actions that have crept into day to day operations. In turn, this means you get to make these processes more streamlined and efficient, leading to reduced costs and timelines while freeing up more time for higher value work.

This documentation process provides an opportunity to assess the quality of your processes, make them more efficient and empower your team to work at a higher efficiency. It will almost certainly help to speed up the training of new employees as your systems documentation becomes the foundation of your onboarding and training. New team members quickly become competent at their work, and having easy access to continuing guidance and support makes onboarding new employees both faster and more focused. Team members are more confident and have a better understanding of their role in the business, which reduces the need for supervision. This is benefit applies in every industry.

Better Prioritisation

Good systems manage the prioritisation of tasks within a business. The system will guide team members to select and complete tasks based on an agreed priority. In effect, the system acts as a “traffic cop,” directing team effort to the highest priority task based on criteria based on analysis and authorised by management.

Once a system has been approved and the team trained, the supervision required will be directed more to monitoring progress and providing support to the team rather than providing micro-level direction and instruction. The system becomes ‘the policeman’ so there’s no need for the supervisor or manager to adopt that role.

Systemisation means you can more easily delegate and automate tasks, allowing you to make better use of resources. ‘High-value people’ can focus more on high-value work – revenue-generating activities such as developing new products, marketing, and business growth. You can focus on these more important tasks knowing that others in the business are competently completing their assigned tasks.

Exactly as in our old, reliable catchphrase, “the right person doing the right thing, the right way, at the right time.”

Cost Reduction

One of the key benefits of systemising your business is that you will vastly reduce the unnecessary steps and wastage, resulting in a measurable improvement in costs. Mapping or documenting processes will inevitably show up the inefficiencies in terms of Time, Cost and Quality. For example, saving one hour every week will free up 50 hours a year which can now be applied to planned, productive tasks. Small cost savings add up to a significant saving across the business.

Productivity issues which may have prompted the management team to hire more people will often be solved by creating or improving the systems related to this area of the business and training the team to follow these systems. Very few business performance problems are made better by throwing more people at the problem. More people with bad systems will never be a recipe for success.

Effective systems also means that we can more effectively monitor production costs. Knowing exactly what your team should be doing, based on your systems, means that you can see what they’re actually doing, and track time and costs against this. Thus, business systemisation provides the means to monitor and adjust expenses and allow you to identify activities that will contribute more to sales and profit.

Systemisation also helps to bring in order where there may have been chaos or confusion that resulted in wasted time and resources. From bottlenecks to duplication of roles, systemisation helps to identify all sorts of problems that contribute to wastage and increased costs. Once identified and analysed, these processes inevitably become more streamlined and cost less to execute. Systemisation provides a systematic means of change management – once problems have been identified, they can be assessed against internal or external standards, and improvements made, allowing company resources to be allocated where they are needed most.

Employee Development

Systemisation does not end with documenting processes and procedures. It is an ongoing process that can help with supporting employee development. Developing a profile document for each employee and periodically updating it is a good way to track employee growth over time. It can be used to track training and qualifications they have acquired, and to note down inconsistencies and other performance issues.

Having a system by which employee competencies and performance can be tracked will be useful when deciding whether they are ready to be promoted, transferred, or even let go. Also, note that with documentation of processes, transitions, whereby employees are moved into new roles, will be easier. They can quickly adapt to their new roles as they will already be provided access to documented procedures that detail the best way to go about their job. Without this, problems can easily arise as every time someone moves into a new role, they will potentially develop their own procedure which may prove to be inefficient and mistake-ridden.

Business Growth and Scale

Businesses grow when they can provide more products and services or secure a larger market share. They scale when they multiply their delivery vehicles, providing additional branches or outlets, or expanding into new markets.

Scaling is made much easier by having reliable systems that can be “rubber stamped” on new branches, production lines or departments. Variability can be minimised as standard systems are implemented throughout the business.

Better Communication

A major benefit of systemising your business is that there is a single view of each process. This means that anyone observing the process will see the same thing as any other observer, and communication about the process will be less ambiguous based on this shared understanding of how the process should work.

Standardised systems means standardised language and terminology to describe the system, resulting in less confusion when discussing issues or potential changes to the system. Documented procedures provide common ground and understanding that facilitates better internal and external communication. Your team can more effectively work out where a problem is arising and work towards resolving it quickly. Where people are not on the same page when discussing work that requires collective effort, it can hamper efforts in trying to meet organisational goals.

Minimal Onboarding and Training of Employees

Whether it is recruiting new team members or transferring/promoting existing team members into new roles, having documented procedures will result in more effective training and higher levels of compliance. Simply put, better systems means more effective training and more efficient support for team members while they consolidate their skills.

Better systems also means greater clarity for the team. Being able to rely on consistent quality from others is likely to result in higher team morale and stronger retention than you would expect in a business where inconsistency rules.

Consistent production quality in turn results in more informed and accurate decision-making from the management team. Productivity forecasts will be based on accurate data rather than hope and prayers.

Customer Support and Satisfaction

This is one of the areas in an organisation that benefits hugely from systemisation. With social media active in every field, customers can impact the reputation of a business or brand very easily. Accordingly, a successful business will make sure that their systemisation extends into the world of the customer. After-sales service and support become critical success factors for the business. Every aspect of the client’s interaction with a business, from initial enquiry through to sales and support need to be every bit as systemised as the production line that creates the product.

Just as a restaurant that produces great food can be brought down by poor customer service, so can nearly any business. Qantas giving a $50 voucher to passengers in an attempt to make up for poor service is just one example illustrating the importance of customer service. If you needed more proof of the importance of efficient sales and customer service, you don’t have to go further than ordering a pizza online. If your favourite pizzeria is closed, you’ll be making your decision about where to place your order based on customer reviews of other pizzerias in your area. Consistent bad reviews become, almost literally, “the writing on the wall” for some businesses.

Customer satisfaction is also improved when you have systems that ensure the products and services you offer are delivered to them correctly. From processes that confirm quality control to the training of employees that guarantees everyone reads from the same script when talking to customers, systemisation does much to ensure customers get the best outcome, no matter how they interact with the business.

Taking Vacation Time

For a business owner it may seem as if there will never be an opportunity to step away from the business. Particularly if you are the only (or think you’re the only) person who knows how things work.

So perhaps one of the most important benefits of systemising your business, even if only from the personal perspective, is that you can be sure that your employees have the information and skills they need to carry out the processes that make your business work, without you needing to be there. An organised business where you have competent people able to understand and follow documented processes will likely stay safe while you go on an extended vacation. And even if a problem arises, it should be easy to determine where the problem is because everything is documented and everyone is trained. Your holiday is safe from interruption.

Higher Resale Price

Imagine you were looking to buy a business and had narrowed your search to two practically identified businesses. They both have good sales, great products and good market reputations, but one of them is systemised while the other relies solely on dedicated team members. The systemised business will provide you, the potential buyer, with greater confidence and can command a higher price. The other business is dependent on its team members, who can leave at any time, taking their expertise and experience with them.

So perhaps the most important of the benefits of systemising your business is that when you choose to exit your business, you’ll always get a better price than you would if you didn’t systemise it.

This is the reason behind the success of franchised businesses. With a recognised brand and a strong focus on systems, the prospective owner will take comfort in knowing that the franchise systems will help make up for their lack of operational experience.

Your Business – Your Values

Perhaps one of the less obvious benefits of systemising your business is that your systems capture your values. Without robust, living systems in your business, it will always be difficult to instill your values. Most business owners take a certain pride in the fact that when people talk about their business, they will often comment on the very values that the owner has worked so hard to build.

But building a set of core values into a business can be difficult. Good systems provide an ideal vehicle for the company values. The things we find important – our values – can be hard-wired into the business by crafting them into the systems. The steps we take, the scripts we use, the language we apply, the options we offer, the actions we take in response to an error – these are all influenced by our values. And conversely, putting our values into our systems will reinforce these values through everything that the people in the business do. And your clients will see this.