What is a business system?

When you hear the words “systems and processes” what comes to mind? Most people almost immediately think of

If you have been reading up on good governance, strategy and how to build a business, then you almost certainly have heard that you “need to put systems and processes in place”. Having systems and processes in place is vital to your business’s success and growth – but, what does that actually mean?

When you hear the words “systems and processes” what comes to mind? Most people almost immediately think of software, but while putting the right software in place is really important, your software merely helps you implement or improve your systems – it isn’t the system itself.

Think of anything you need to do within your business: Order a product. Contact a prospective client. Take care of a query from an existing client. Make a sale. Pay your staff. Pay your bills.

Now, think about how you do these things. The steps you take to achieve the end result of each item. For example, when you order a product, you may follow the following steps:

  • Identify the need (maybe you did a stock-take or received an order from a client – these things tell you what you need to buy and how many of each item)
  • Find suppliers (if this is the first time you are doing this, it might be a google search, if you have been around a while, you should have a list of preferred suppliers)
  • Ask for a quote (maybe more than one in order to get the best price)
  • Accept a quote and create a purchase order
  • Send the order and confirm the delivery date

All of the above is your ordering process. It is the way in which you achieve an outcome. If you haven’t taken the time to sit down and plan your processes, then you may find yourself making a mess of it or skipping steps and having to go back, or doing things twice. Or you forget how to do something and have to look it up every time.

Creating a system, means planning your process ahead of time, ensuring that you achieve the end goal and writing it down. Systems are very simply clearly defined and replicable processes.

So when your business guide or mentor tells you that you need to put systems and processes in place, what they actually mean is that you need to plan ahead and then officially write down the way you do things.

Systems help you to organise, document and manage your team and all the responsibilities associated with each role within the company. Systems keep a company on track and efficient and they enable growth.

Systems are not automatically good. You can have a clearly defined way of achieving a goal that is written down and easily replicable, but it doesn’t mean that it is the smartest or most efficient way of getting from A to B.  So, after taking the time to plan, create and set up your systems make sure that you also schedule regular times to assess them and make sure they are efficient, still relevant and that they actually work!

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