FAIP 2021 Week 5: Business Operations Streamlining
Having explored the whole process of acquiring and retaining customers in our week 4 session at FAIP 2021; we dedicated week 5 to learning how to set up efficient business operations for growth. Our goal was to help the startups to learn how to develop a strong operational frameworks that will smoothen their day to day activities; while reducing friction and duplication of efforts.
Using a manufacturing business example, the operational framework for an organization can be divided into three major segments: the inputs, processing and outputs segments. Under the inputs segment, the business interacts with its suppliers for raw materials and other resources needed to run its day to day activities. Next, the business moves into the processing segment where the inputs are converted into final products ready for delivery to the end users. On the outputs segment, the business interacts with its customers through delivery of the finished products and other customer relationship activities.
Defined in a slightly different way from the above example, the operational framework for any business can be categorized into the supply side, internal operations and the demand side. The functions for each of this segments are aligned with the description above; but the actual activities differ based on the nature of the business.
Mapping out all the key activities that must be done by your business for each of the three segments in your operational framework is a critical exercise that is most often overlooked by many startup founders. Operating on autopilot is a recipe for your downfall; and therefore it is very important to have all your operational procedures documented for ease of reference as and when they are needed. This ensures that everyone in the organization knows what they should be doing at any given time; and how their individual tasks contribute to the overall delivery of value to your customers.
In documenting your business operations, you need to develop procedure manuals that become standard guides on the process flows for all activities involved when transforming your inputs to outputs; and finally delivering value to your customers. Initially, you want to keep these documents simple, short and easy to interpret for faster adoption and implementation by your team. You will then build on them gradually and convert them into comprehensive policies for your business operations.
While developing the operational framework for your startup, you shall also be designing your organizational structure and establishing an organizational culture that will make working at your startup fulfilling. After clearly defining the key functions in your startup and determining the tasks under each function, you will have a clear understanding of the skills needed to accomplish those tasks.
The next step is to assess your skills capacity and those of your team members to identify skills gaps you have that need to filled; and finally develop your organogram based on the roles each team member will be playing in your startup. To professionally run your startup, you need to let the experts or professionals do their work. Based on the skills assessment of your team, you should assign each of them roles that are aligned with their core strengths in order to maximize productivity from the team.
In the common situation where the team does not have all the requisite skills needed to run the business; or where some team members will be overwhelmed with multiple tasks, you can contract external parties to offer the services as and when needed. Business processes outsourcing helps in cutting down unnecessary operating costs by paying for services only when they are required.
Administrative functions such as human resource, finance, customer relationship management among others can also be streamlined by use of cloud solutions that are now more affordable that having fulltime resource in your startup.
We are living in a digital age where “software is eating up the world“. For an assignment, we commissioned the startups participating in FAIP 2021 to map out their key activities and document their operational frameworks. Finally the startups will develop digital strategies for their businesses in order to align themselves with the ongoing fourth industrial revolution; where digital technology and data are driving organizational growth and sustainability.