Why Systems and Processes Are Critical to Business Growth
Process cannot be enforced without good systems to enforce it, and systems cannot produce good end results without robust processes in place.
Want to Grow?
Expand to new markets? Take on another segment or introduce another product line? Of course you do.
Before you do, consider what will happen if it’s a roaring success.
Can the systems and processes that you have in place meet the demand?
Systems and processes may sound rather dull, but they are the lifeblood of your business, delivering to customers your products or services in the best way possible.
Think about the best use of your time.
Would you rather…
Most of us would rather not be doing boring, dull re-entering of information on the left-hand side of this list. We would rather be focusing on the big picture than getting lost in reworking the details again and again.
Common Systems and Process Breakdowns That Limit Growth
Many businesses that I have worked with struggle with some or all of the following:
Entering data into more than one system (accounting, website and inventory, for example) and re-keying information; sometimes this can take all day or be a whole person's job! Boring, and not a lot of job satisfaction there…
Discrepancies between data in place A and place B (not a surprise; a natural result of point 1, really…)
Incomplete view of what is going on in the business; (further lack of surprise…) which can lead to delusional decision making. If you don’t have all the information, how can you make a good choice?
Heavy manual intervention in data analysis, manipulation and presentation; this is usually when the systems that support the business don’t provide reporting at the right level of detail or flexibility
Measures that are ‘what’s available’ or ‘what’s always been measured’ rather than ‘what’s needed’ right now… so often a business builds layers and layers of things to look at, forgetting to discard the measures that are no longer relevant.
Consider your own business in this light. Is there an opportunity to improve?
Why Streamlined Processes Enable Sustainable Growth
Consider for a moment some factors at play here…
Shoppers are incredibly value savvy; they know where and how to get the best deal. This means that your online store might be attracting visitors from down the road or across the globe.
Sellers are trying to deliver great value, so margins are under pressure. Not just the retail margin, but all the way back to the producer.
When you’re trying to deliver value and margins are tight, the last thing needed is excess inventory (or stock)… “Inventory OWES YOU MONEY.”
The point being that unless you have negotiated some super terms with both your customers and your suppliers, you have already laid out the cash to purchase the stock, and it has not yet been purchased by the customer.
Practical Process Improvements That Support Scale
Three actionable points that will make a difference right away:
As a business, you now have to be ‘global-ready’ from earlier in your growth cycle. Look at your most important information and how it is gathered.
Start simple. Have you ensured that customers all enter their phone numbers in the same format? What about address information?
A small point at the beginning, when you have a manageable number of customers, but it can be the difference between an SMS blast to specific customers and a complete failure to communicate.
The larger your list of customers gets, the harder it is to clean up these types of data anomalies.
It’s impossible to stay profitable if you don’t have a clear grip on your costs (and how they can fluctuate) and where the profit is coming from in your business.
Do you have a ‘living’ costing document for each product or project?
Do you have a process for reviewing costs?
For some businesses, costs can fluctuate depending on the season or the mode of transport.
If you can consider your costs with both best and worst case scenarios in mind, then you are better equipped to make decisions on the fly.
A system that can show actualised costs as orders or projects are completed is one that will show you how accurate you are in estimating and where the blowouts are coming from.
It’s essential to be able to clearly see through the purchase cycle what has been spent and when it is due to be paid. If you don’t have a way of tracking this critical information, then you are flying blind.
Control over inventory, no matter where it is. Knowing where your inventory is and how to get it to your customer in the shortest time possible (at the best margin possible) is all about how accurate your information is and how visible it is to you and your team.
Do you know where your inventory is?
Can you deliver it to a customer (globally) from where it is? Live inventory information is critical to any retail business.
An inaccurate inventory can lead to disappointments in-store or online, or alternatively, items left on the shelf when they could have been sold. Remember – it owes you money!
Leonie conducted SOLD OUT workshops on systems and processes in Brisbane, Sydney and Melbourne during the month of May 2014 – guests brought along their process problems and put plans in place to take their business to the next level.
6R works with retailers on ERP, PLM, and e-commerce projects in retail organisations and has the experience to anticipate and head off the kind of issues that will get in the way of successful project delivery.
6R's focus is to set up internal structures and skills so that the retailer and the vendor both get good results. Book your discovery call here.
Retail improvement, made practical.
Leadership thinking that drives change.
Sign up to receive new articles and strategic guidance.
