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What is a business system? August 18, 2008

Posted by Jeremy in Efficiency Process.
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When I utilize the term “business system” it has a very simple meaning.  It is the system or process that makes your business run.  It is not a software system or piece of equipment, it is simply the steps that your business goes through to provide your product or service.  This may be all manual or in some cases it may be completely outsourced.  It really depends on your business and your way of providing your product or service.

Successful franchise businesses have recognized the value of business systems.  They have analyzed, documented and reproduced that same system in each of the franchises.  Think of McDonald’s, no matter where you get a cheeseburger in the United States they are pretty much identical.  This is due to the system that McDonald’s has put in place to provide their product.  This allows them to provide their product in a uniform fashion with millions of different people preparing it.  This is a business system.

Many other businesses have never even spent the time to realize they have a system in place or have never tried to determine if their system is the most efficient for what they provide.  In many cases their business system has been dictated by reacting to circumstances that have arisen while trying to provide their goods and services.

In the next post we will discuss how a business system analysis can help to provide businesses with a more efficient mechanism of providing their product or service.

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What do you mean by business efficiency? August 12, 2008

Posted by Jeremy in Efficiency Process.
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Short Answer

A very simple definition to this question would be finding ways to prepare your business to handle more work with less effort.  That is not to say that you get rid of staff necessarily, maybe you would just be able to increase your work load without having to increase head count.

There is a quote on wikipedia under “Business Process Reengineering” that I really think does a great job of explaining adding business efficiency:

…the major challenge for managers is to obliterate non-value adding work, rather than using technology for automating it (Hammer 1990). This statement implicitly accused managers of having focused on the wrong issues, namely that technology in general, and more specifically information technology, has been used primarily for automating existing work rather than using it as an enabler for making non-value adding work obsolete.

I believe that best explains what my focus for business efficiency would be.  I believe that we should work to analyze the current process and see if there are places to rework the process to make it better.  Then as step two we should analyze if there are ways to use technology to enable the organization to work on other tasks.  In many cases, these two steps can yield great results.

Systems

You hear the term business systems often and I am going to add a definitional post as to what I see in this realm.  From a simple standpoint, a business system is a process that makes your business operate.  This may be as manual as someone in your office preparing and invoice and putting it in the mail to very automated capabilities. 

Processes/Standards

Probably two very over-utilized terms in the business world.  Again, I will expand on this topic but from a high-level processes and standards tell you how to make the system “operate”.  This will tell someone how to get the invoice printed, stuffed in the envelope, and sent out to the client.

Gain Business Efficiency

Now that we have given a basic definition of how the standard business runs, we can describe how to optimize your efficiency.  The system that you are currently operating in your business is probably working just fine for you.  It is sending out the invoices and getting the bills paid.  The question is really two-fold from there:

  1. If you grow can you continue to do the process the same way without adding resources? 
  2. Are there ways to make the system easier allowing for freeing up of time for existing resources?

What could you do if you had another 2 hours a week from one of your employees or 5 of your employees?  Are there other items that have been waiting for completion?

This is where process/business system analysis and possibly re-engineering come in.  The analyst will help walk through the process/system and analyze the purposes and reasons behind each step.  Once the analysis has been done, a throrough analysis would be done by a software architect to see if technology can simplify the process/system.  Once both analysis processes are complete, you are provided the analysis and recommendations and can decide how to proceed.

This process simply looks at your processes and gives you options with what you can do to optimize your resources.

I hope that this article helps.