Chapter 8 - Business Operations and Organizations

What are business operations?

Business operations refers to the day-to-day tasks that a business performs in order to run and ultimately
make a profit. More specifically, business operations are the core activities that transform inputs like raw
materials, labor, and capital into outputs like products and services.

While these vary for different industries and businesses, business operations typically include marketing,
sales, and service. For certain companies, they might also include product, manufacturing, and order
management.

Take a restaurant, for example. Their business operations might include:

• Inventory management

• Order management

• Food preparation

• Cleaning

• Service

• Marketing

• Accounting
What is business operations management?

There is typically a dedicated team in charge of optimizing the day-to-day tasks and carrying out high-
priority initiatives across all the operational areas of a company. This team is the business operations
management team.

It is responsible for resource coordination and management, capacity planning, forecasting, and more.
This team reports to the chief operating officer, who is responsible for managing the daily business
operations of the company as a whole.

Here’s an example of an organizational chart for a manufacturing company that includes an operations
department.
Elements of Business Operations

While they vary widely, business operations for any company or industry are related to four major
elements. Business operations teams are responsible for managing and improving these elements, as
outlined below.

1. Processes

Processes are essential for business operations. They outline how a company does things from start to
finish, like developing a product or submitting an expense sheet. By ensuring that employees are
completing tasks in the most efficient and error-free way possible, processes can boost productivity and
profitability when done right.

2. Personnel

A company’s workforce also has a major impact on its productivity and profitability. So, another key pillar
of business operations is calculating how many employees are needed and in what job functions, deciding
whether employees should be hired full-time, part-time, or on an “as needed” basis, and ensuring
employees have clearly assigned roles and responsibilities that align with their skill sets.

3. Technology

Technology or equipment is another key element of business operations. Understanding what technology
is needed to help employees achieve their day-to-day tasks is essential to running and growing a company
and estimating costs. Another operational decision is whether you should build that technology internally
or buy it.

4. Location

Location is the final important element of business operations. Some businesses may require a location in
a city or one with parking. Others may be able to operate entirely remotely. The optimal location will vary
according to industry, company size, and other factors. When picking a location, consider factors like
square footage, layout, traffic flow, parking, and storage. Also, consider what location would enable you
to reach a wide enough pool of customers and be accessible to employees (even if that’s just yourself) as
well as vendors.

What are business operations examples?

Below we’ll look at examples of common business operations across a variety of industries and
companies.

Product Operations

Product operations is designed to ensure the product team works as efficiently as possible by providing
them with business processes, best practices, budgeting, reporting, and infrastructure. It also helps
improve alignment, communications, and processes among the product, engineering, and customer
success teams of a company to ensure products are successfully created and launched to market.
Daily tasks might include:

• Performing market research, including user interviews

• Analyzing and reporting data to product management teams

• Creating and optimizing processes to streamline product development

• Managing and sourcing new tools for the product team

• Working cross-functionally with engineering, sales, and customer service

• Overseeing the testing process for new features

Human Resources Operations

One of the most common business operations for companies in a range of industries is human resources.
HR operations is responsible for optimizing all stages of the employee lifecycle, including recruitment,
onboarding, performance management, and offboarding.

Daily tasks might include:

• Outlining HR compliance policies

• Creating and maintaining onboarding materials

• Planning headcount for the recruitment team now and as the company scales

• Launching initiatives to improve employee relations

Sales Operations

Sales operations consist of all the processes and initiatives designed to reduce friction in the sales process
so the sales team is more productive and successful. Lead management, territory structuring and
alignment, compensation plans, and sales automation can all help salespeople work more efficiently.

Daily tasks might include:

• Creating and optimizing the sales strategy

• Gathering external market and competitor research

• Reporting internal sales performance data

• Scheduling appointment bookings with leads and contacts for sales reps

• Defining and assigning sales territories

Marketing Operations

Marketing operations are also common in any type of business. This operational area is made up of all the
personnel, processes, and technology that allow marketers to function efficiently.

Daily tasks might include:

• Developing and documenting workflows

• Gathering customer, market, and competitive intelligence research

• Managing all the marketing automation platforms the team uses

• Creating a review and approval process of marketing materials to ensure compliance

Financial Operations

Financial operations is a business operation that consists of overseeing all workflows and processes related
to a company’s finances and financial decision-making. This includes the accounts receivable and accounts
payable processes and data collection.

Daily tasks might include:

• Creating financial reports

• Overseeing financial transactions

• Developing investment strategies

• Ensuring daily operations comply with the law and standard practices

Supply Chain Management Operations

A common business operation of manufacturing and retail companies is supply chain management. This
involves optimizing and managing the processes, personnel, technology, and locations used for sourcing,
producing, and delivering products or services to customers.

Daily tasks might include:

• Evaluating suppliers

• Negotiating contracts with vendors

• Forecasting demand to maintain a lean inventory

How to Improve Business Operations

1. Define and measure key performance metrics.

2. Identify inhibitors to growth.

3. Create new processes.

4. Analyze and improve existing processes.

5. Stay informed about industry trends.

1. Define and measure key metrics.

Before you can launch improvement efforts, you need to define and measure key performance metrics
and benchmarks. This will enable you to better assess your operations and understand where to target
your improvement efforts.

These metrics should be tailored to different business operations. For example, for service, KPIs may
include:

• Net promoter score

• Customer churn rate

• Number of support tickets

• Wait time for callers

KPIs for supply chain management, on the other hand, might include:

• Inventory turnover

• Fill rate

• Customer order cycle time

• On-time delivery

2. Identify inhibitors to growth.

Defining, tracking, and analyzing KPIs will begin to reveal operational inefficiencies or issues that are
impeding profit or growth.

For example, if the supply chain management team consistently underperforms in terms of customer
order cycle time, then you may need to evaluate the current processes, personnel, equipment, and
location of that team. It’s possible that no one currently predicts and manages the demand for the
company’s products so products are constantly on backorder. Or maybe someone is manually determining
and scheduling the resources needed to fulfill and deliver orders instead of using a tool to simplify or
automate those tasks.
3. Analyze and improve existing processes.

Once the company’s operational performance has been mapped to some inhibitors to growth, you can
begin to improve existing processes across the organization.

For example, you may find that the HR department uses several tools to store, manage, and track requests,
which is resulting in delays, duplication, and other issues. To improve these processes, you may implement
new technology for storing, managing, and tracking all HR requests in one place.

4. Create new processes.

In addition to improving existing processes, an operations team may need to create totally new processes.

For example, say the satisfaction of employees who have been at the company for less than three months
is much lower than employees who have been there for at least a year. One explanation may be a lack of
a solid onboarding process. You can therefore create a process made up of activities like an introductory
phone call, follow-up email, and virtual training in order to set expectations for new employees as well as
existing team members who should be involved (like managers).

5. Stay informed about industry trends.

In addition to looking at your performance data, staying informed about industry trends can help you
optimize or create new processes. For example, new technology, regulations or taxes may prompt changes
in processes that help you outperform your competitors, cut costs, or stay compliant with changing state
and federal laws.

While all employees can help improve business operations in these ways, there may be one individual who
leads these optimization efforts. Let’s take a closer look at this individual’s roles and responsibilities below.
What is a Sales and Marketing Strategy?

Without an effective sales and marketing strategy, a business may fail. In the United States, 18 percent of
private sector businesses fail in their first year, according to LendingTree. After five years, the percentage
of failed businesses rises to nearly 50 percent.

What are the signs of a failing business? A key sign is plummeting sales. Another sign of looming failure is
a lack of interest―if people are not talking about a business, a lackluster marketing strategy may be to
blame.

For businesses that want to avoid becoming a statistic, a strong sales and marketing strategy can help
establish a game plan for achieving growth. Traditionally, sales and marketing have worked as separate
entities, with each function delivering unique value. But synergy between the two can help maximize
business success.

What Is a Sales Strategy?

The primary goal of a sales strategy is straightforward: to sell a business’s products or services. The sales
process requires building and managing relationships with prospects and providing guidance on buying
decisions. This may mean sales teams need to:

• Call customers to present new offers one minute and participate in pitches and demonstrations
the next.

• Identify a prospect’s pain points in order to match their needs with the right solution, product, or
offer.

• Know when a prospect is ready to move from a lead to a qualified sales prospect; pushing for a
sale too early can result in the loss of the prospect and a missed sales opportunity.
Every customer and organization is different, so one company’s sales strategy may differ from another’s.
Steps in the process of creating a sales strategy include:

• Setting clear objectives regarding sales processes and outcomes.

• Aligning sales objectives with organizational goals and customer profiles with specific offerings.

• Hiring and properly compensating sales teams; since sales team members typically earn a base
salary and commission, performance incentives are critical for getting the best talent.

• Implementing systems that effectively track sales activities throughout the entire life cycle and
measure sales performance.

What Is a Marketing Strategy?

An effective marketing strategy helps an organization create value for its prospective customers. This
requires knowing what types of individuals may be interested in the company’s offerings, studying
consumer behavior, and learning the psychology of why customers buy the company’s products or
services.

From content marketing and social media to public relations and advertising, marketers have many tactics
to attract prospects. When developing a marketing strategy, organizations can risk doing too much. A
marketing strategy provides a structure for and guidance on executing marketing tasks.

Steps in developing an effective marketing strategy include:

• Conducting market research.

• Analyzing consumer behavior.

• Determining which markets to target.

• Performing competitor analysis.

• Developing a brand to distinguish the company from competitors.

• Establishing competitive pricing.

• Creating promotions across various media.

What Is a Sales and Marketing Strategy?

A sales and marketing strategy enables teams to follow a structured approach. First, the marketing
department identifies a prospect, gets their attention, and keeps them engaged. When the prospect is
ready to make a buying decision, the prospect is seamlessly handed over to sales, whose primary job is to
convert the prospect into a customer and then forge a relationship that can lead to further sales
opportunities.
A sales and marketing strategy combines elements of both sales and marketing. An effective marketing
strategy raises awareness of a business and attracts prospective customers, while a sound sales strategy
converts prospects into customers. But when sales and marketing teams can come together to create a
holistic strategy, they can eliminate silos and maximize the value each department brings to the process.

For example, consider a clothes retailer seeking to achieve 15 percent growth for a specific line of athletic
wear. While a standard sales approach might include input from marketing on how to achieve this aim, an
integrated sales and marketing strategy puts each group on equal footing, placing the responsibility for
achieving the growth target on both teams. Through an integrated approach, the two teams collaborate
on developing mutually agreed upon strategies, so neither the success nor failure of a campaign falls solely
on one group.

The primary aim of the strategy is to document processes to help guide sales and marketing teams in their
decisions, with key business goals in mind. When developing a sales and marketing strategy, it’s also
important to note that a one-size-fits-all approach does not exist—each strategy must be uniquely tailored
to the organization and to the campaign.

Why Is It Important for a Business to Have a Sales and Marketing Strategy?

A sales and marketing strategy documents what should take place throughout the entire marketing and
sales life cycle. It also clearly distinguishes different roles, while ensuring that individuals in each team
work in unison to achieve business objectives, which helps optimize the process of attracting and winning
over new customers.

An effective sales and marketing strategy also eliminates silos. Sales and marketing teams that work
independently from each other often can find themselves out of sync. Miscommunication may creep in,
risking the loss of a prospect or customer. A unified strategy can improve collaboration, cohesion, and
synergy between these units, ultimately resulting in greater success for the business as a whole.

In an integrated sales and marketing environment, sales can clearly communicate the kinds of marketing
content and collateral they need to help close sales opportunities. On the other end, marketing can acquire
vital information about what drives buyers from the sales team, which can help them refine their
marketing tactics.

Who Is Qualified to Create a Sales and Marketing Strategy, and How Is It Done?

Both sales and marketing professionals must participate in the process of crafting a sales and marketing
strategy. For a strategy to be executed successfully, the departments have to establish how they will
communicate with each other. Key questions should be asked throughout the process, such as:

• Which tools and systems can facilitate clear communication?

• Which metrics do both teams consider important to measure?

• How will the teams work together, specifically?

• What is the budget?

 • What are the primary goals?

• What are the expectations of each team?

• Which team is accountable for each aspect of the process?

• Who are the universe of buyers to be targeted?

• When is the best time to engage prospects and customers, and how?

Working together, each team can come up with answers to these questions. Agreeing on mutual
accountability and responsibilities at the outset is critical to ensuring buy-in on the strategy. Regular
meetings are also important to address issues and make adjustments that can ultimately improve the
process of identifying prospects and converting them into customers.

References:

https://catalant.com/business-operations/the-ultimate-guide-to-business-operations/

https://onlinemba.wsu.edu/blog/sales-and-marketing-strategy/