Systems and processes: Optimising for better performance

Systems and processes are fundamental to running a traditional business. Integrating them with tasks and workflows can give you a winning edge.

‘Systems and processes’ are the kind of words that are flung around with abandon in the workplace — but for good reason. Because no organisation can exist without systems and processes in place to guide how they operate, these concepts are crucial for anyone wishing to understand and improve on how a business ‘works’.

But what are they exactly?

What’s the difference between a system and a process and why does understanding them better help you do better business?

In this article, I’ll detail some basic definitions alongside relevant examples, before discussing how you can start to optimise your own systems and processes.

What’s the difference between a system and a process?

As we’ve detailed in this earlier blog, “a business system is a defined set of principles, practices and procedures that are applied to specific activities to achieve a specific result”.

A system might include technology, staff and a set of rules that all work together to produce an outcome. On the other hand, the actions that each of those elements takes to make the system work is described as a process.

READ: A complete guide to business processes

A car is an example of a system, with the way it uses energy to drive being an example of a process.

And here’s a traditional business example: a travelling salesperson must try to meet their quota for selling X products (encyclopaedias, toasters, life insurance — whatever you like) in any given month to get their bonus.

A simple approach for our salesperson would be to choose the nearest neighbourhood and begin knocking on every door, one after the other and delivering the sales pitch just as it’s offered in the company playbook. This is a process.

But this salesperson wants to work smart, not hard, especially if they want to increase their chances of getting their bonus each and every month. So, they develop a system.

Our salesperson notices that the product they’re selling appeals to a few distinct types of customers, leading them to draw some conclusions regarding where each type of customer is likely to live, as well as how to best sell to each of these individuals. Each morning, our salesperson can now plan a detailed route, prioritising neighbourhoods and homes that are likely to offer the best leads and, therefore, the best sales deals. They now have a simple sales system to help them achieve their bonus.

Introducing 6 key workflows: Streamlining systems and processes

Even in the rudimentary example of the door-to-door salesperson, we can see how a fit-for-purpose system can offer clear benefits regarding performance, productivity and efficiency.

Before your business can reach its potential, it must first have the right systems and processes in place. That means the right people for the job, the right tool for each task and everything else that goes in to delivering products and services in today’s world.

If you’re interested in improving the systems and processes in your business, we’ve identified common functions shared by the largest number of businesses. At MYOB, we call these areas of business ‘workflows’, each of which are comprised of any number of relevant tasks.

The six key workflows:

• Customers — this workflow includes all the systems and processes that deliver things like pricing, marketing, quoting and invoicing, to better help your business meet the expectations of your customers
• Supply chain — tasks like inventory management, generating sales orders and paying supplier bills are included in this workflow
• Projects — here we have job quoting, time billing and job management
• Employees — payroll, employee contacts and leave management, to name a few
• Finances — this is how you track cashflow, receive and make payments, capture receipts and so on
• Accounting and tax — the fun stuff! Bank reconciliations, prepare and lodge GST, and make sure everything’s in good order for your accountant as well as the tax office

Because businesses often develop organically, the systems and processes that contribute to each of the above key workflows can sometimes be developed and integrated in an ad hoc fashion, leading to gaps in efficiency and productivity arising.

For the benefit of your employees, your customers and your business health, we need to address the gaps caused by poorly integrated tech.

Your first step to optimising systems and processes: Address digital disconnection

With so many things to achieve in a growing business, there’s little wonder that businesses acquire new software at a rate of knots.

But software doesn’t deliver your business systems. It needs to be combined with your own processes, hardware and people to reach that status. Without a keen understanding of how these elements interact, technology quickly becomes a barrier to productivity.

Last year, our research found one in two businesses across Australia and New Zealand are paying for apps they’re not using and that, on average, a full day each week is lost due to problems arising from disconnection.

Plus, new findings from a recent survey of mid-sized businesses (employing between 20 and 500 people), found 43 percent of Aussie operators and 46 percent of Kiwi ones say they have to regularly check between systems to make certain their data is correct.

So, rather than diving down the rabbit hole of process optimisation, your first step towards better systems and processes should be a thorough technology audit to be sure you’re not losing efficiency through task duplication, data error or other risks presented by poorly integrated solutions, such as online security issues and fraud.

The MYOB solution: Bring all your key workflows into one platform

MYOB is a business management platform that solves the problems presented by digital disconnection. That means you’re able to manage your systems and processes across those six key workflows, all in one place.

And because that system is scalable, not only do you pay for what you need today, it also affords you the benefits of a system that grows with your needs tomorrow.

By removing the complexity that software creates for many businesses, your organisation can become better connected, more decisive and adapt effectively to whatever comes your way.

Ready to find out how to unleash the potential of your business? Integrate your key workflows with MYOB in Australia here. For New Zealand business operators, learn more about the MYOB business management platform here.