Business Systems for Expansion | YRC

What is a System?

The word system finds roots in its Greek origin - systema. ‘System’ means an organised arrangement to achieve comprehension and manageability. It could be the arrangement of year-wise subjects over an academic course. It could be the segregation of different departments of an organisation. It could be a standard for evaluating performance. And we could use more examples like these. If we carefully observe, systematising helps us achieve comprehension of ideas and concepts. And better mapping and comprehension facilitate better management. Other words that are often used interchangeably with system are organisation, arrangement, structure, classification, etc.

Concept of ‘system’ in Business

A business is a composite of many functions running simultaneously. There is sales, marketing, inventory, HR, finance, customer support, etc. And it works only when all the functions work in cohesion. For instance, if customer support is ignored, it will soon show up in the sales figures. If the HR department fails to coordinate with the finance department, the salaries would not be disbursed. And every function must also work perfectly within itself. To achieve this intra and inter-departmental cohesion and make the enterprise run like one composite entity, building an organised working framework of policies and procedures is critical. This framework represents the concept of ‘system’ in business.

An example/application of Systems in Business

Every company realises the importance of maintaining the required inventory. But this cannot be achieved by casual or ad-hoc decision-making. There must be a system of policies and procedures governing what to buy, how much to buy, when to buy, from whom to buy, who will buy, etc. Having a well-planned inventory management system is an affirmative step towards ensuring that the activities related to inventory management are smoothly carried out in the required manner.

How to build a System in Business?

The concepts of a process and a system are different. A system is a broader concept. When you want to build a system, processes become a part of it. Even policies do. Even people become a part of a system. And so could technologies. In a system, you are trying to make a bigger thing work. So, when you are saying you want to build a system in your business, the right way to put it would be - to make your business systematic.

But systems eventually boil down to processes and operations. Systems fail without executional precision. And the right place to start making your business systematic is the adoption of Standard Operating Procedures (SOPs) to define business processes.

Yes, apart from processes, other aspects of ‘system’ will also come that include determinants from business strategies, policies, people, technology, application of management principles and concepts, administration, etc.

How do SOP-based Business Systems help in Scaling?

Attracting Investors

Investors need to see more than the brilliance of a business idea. They also need to see how that idea will operate on the tides of the seas. It is a good idea to display the might of operational planning. This is where SOP-based business systems prove to be helpful. With SOPs in place, questions on complex operational details could be answered with ease because they would have been already addressed in the operational plans.

Operational Flexibility

As retail and eCommerce consultants, we often come across instances when making changes to operations is much easier in a defined working setup. With SOPs in place, it is easy to identify the areas of a process that will be affected in light of the proposed changes. However, incorporating changes and assessing the implications of such changes on the host and other interrelated processes is challenging.

Easy Replication of Operations

Planned and proven processes and operations can be replicated more easily. For instance, a supermarket store that has a robust home delivery system can replicate the same in a new branch with greater confidence. Some changes may be required to suit the hyperlocal circumstances but the foundation to work upon would be already there.

Help in Franchise-based Expansion

When a business enterprise decides to adopt franchise-based expansion, it must also prescribe the operational standards and procedures to its franchisees. This is done via franchise SOP manuals. Different companies may call it by different names but the essence is the same. But for that, franchisors themselves must be following SOP-defined processes. This constitutes an important part of how the franchise system will work.

About YRC

Your Retail Coach (YRC) is a retail and eCommerce consulting brand with 10 years of experience and a budding international presence. Developing SOPs for the retail and eCommerce sector is one of our core expertise areas. Our projects are handled by experienced retail SOP consultants.

For any service-related queries or to speak to one of our SOP experts, please drop us a message.