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Before we look at the most important business systems you need today, we must define the concept of a systemised business. A systemised business is a business that has taken the time to document its processes and procedures before turning them into a set of clearly defined systems: systems that can easily be followed by
employees at all levels of seniority. The potential benefits of systemising your business are manifold, including efficiency improvements, reduced operational costs and greater customer satisfaction.
And now to the meat of the matter: the business systems themselves. If you want to start turning processes and procedures into systems and defining these systems in a meaningful way, you need to familiarise yourself with the most important types of systems in use today. You must ask yourself these questions: What are the different types of business systems that have proven to be effective in your industry and others? How can you adopt these systems and make them work for your company?
7 Core Systems That Will Help to Define Your Business
Whilst there are countless systems currently being used by different businesses in different market sectors and industries, there are a number of core business systems that nearly all companies follow. These include systems for accounting processes, workforce training and management, inventory management and product development management. Below, we look at 7 major types of business systems that you will almost certainly need to include in your plans when you start to systemise your own business.
1. Lead Generation – Whether your company sells products or services and whether your customers are other businesses or consumers, you must have a lead generation system in place. An effective lead generation system should, among other things, define your target audience, the various methods you employ to attract their attention and what exactly it is that you have to offer them. In order to define these key concepts, you can ask yourself questions such as “What problems are our products and services designed to solve?” and “How best can we make potential customers aware of what we have to offer?”
2. Workforce Management – Every commercial organisation needs a strong and well-defined workforce management system in place. For the sake of clarity, your company’s workforce management system will probably need to be subdivided into a number of smaller systems, covering key areas such as employee training, staff rosters, annual reviews, recruiting of new personnel, promotions, the determination of salary levels for various roles and levels of seniority and much more besides. Every single aspect of workforce management needs to be encapsulated into the system, in a manner that is easy for any member of your HR team to follow.
3. Improvement Management – Improvement management systems typically appear at the end of lists such as these, which we believe is a big mistake. Your improvement management system is one of the most important business systems you will document and should not appear as an afterthought. Rather itshould be central to your business systemisation strategy. Without a clearly defined system for improving the performance of your business in all areas, you are likely to become less efficient and less competitive over time. Typically, an improvement management system includes documented procedures for reviewing and improving your customer service, your marketing strategies and the products or services you offer. Of all the major types of business systems you will need to incorporate into your overall systemisation strategy, improvement management will most likely be the one that plays the biggest part in determining your company’s future path.
4. Financial Management – A strong financial management system should also be at the heart of your systemisation plans as it will directly influence both the current and future profitability of your organisation. This system should document the way in which capital is used by your business, along with other key accounting functions such as the procedures employed to quantify the depreciation of major business assets. A well-thought-out financial management system will also cover procedures for payroll administration, investment activities, the financing of new product development and the acquisition of new inventory. (if applicable) It should define effective processes and procedures for all of the functions that will help to determine the future financial health of your business.
5. Product Development / Service Development Management – All businesses should have a system in place that defines the procedures they follow to develop new products or services and enhance existing ones. Without such a system, your competitors will likely steal a march on you in the future by developing superior products or services that have something interesting and new to offer prospective customers. How quickly this might happen will depend on the nature of the market sector in which your company operates but without a sound development management system in place it will almost certainly happen at some point in the future. An effective product (or service) development management system should include details of how you intend to brainstorm future ideas, how these ideas will be turned into concrete plans and how they will then be tested, refined and brought to market.
6. Inventory Management – Although inventory management systems are critical to the operation of many businesses, not all commercial organisations will require one. Nevertheless, owing to their widespread use by retail, manufacturing, wholesaling and industrial companies, we feel that inventory management systems must feature in any serious list of major types of business systems. A well-designed inventory management system should include details such as minimum quantities of products your company needs to keep in stock, procedures for checking / rotating stock if relevant and monitoring processes that will help you to identify and correct any inefficiencies in your current and future inventory management strategies. If your organisation is a service provider rather than a manufacturer or wholesaler/retailer of products, you may still find an inventory management system useful for tracking stock levels of the materials and/or resources you use on a daily basis.
7. Sales Order Processing Management – Whether your sales orders take the form of written documents submitted by clients or they are derived from verbal communications over the phone, you need an effective management system that defines how each order should be processed. This system should cover the entire procedure, starting with the receipt of a new order and finishing with its successful fulfilment. It should include details of the procedures for confirming new orders as well as how they are passed on to your manufacturing or service departments for fulfilment and how they are invoiced and paid for. Every step should be clearly documented so that each order can be processed efficiently by anyone with access to your sales order processing management system.
In addition to the above business systems, you will probably want to create an information management system to define how all your business data is stored and maintained, as well as a facilities management system that sets out the procedures to be followed by those who are tasked with maintaining your commercial equipment and premises.
What Are the Different Types of Business Systems That Your Company Really Needs?
If you would like to create a comprehensive and actionable plan to systemise your business, you will need to include details of all relevant business systems in this plan, not just the 7 core systems outlined above. But don’t worry because help is at hand. As creators of robust business systems for companies in diverse industries and
geographical locations, we are ideally placed to help you achieve your systemisation goals quickly and efficiently. Over the last decade and a half, we have helped hundreds of commercial organisations in Australia, New Zealand and Malaysia to develop highly effective business systems and would be delighted to do the same for your company. Contact us now to get started.