What is the Definition of Business Operations?

By: First Union | Date:

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What is the Definition of Business Operations?

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The activity of any company generally involves many moving parts. Whether those parts encompass managing personnel, dealing with equipment issues, or handling customers, they all fall under the umbrella term "business operations." It is how they all come together and work seamlessly in conjunction with one another that speaks to how successful a business is or may become. In this article, we look closer at what exactly is entailed in business operations.

Understanding Business Operations

When you are first establishing your business and potentially mapping out a business plan, you are in essence coming up with the blueprint for how it will run. You will define the various roles and functions of company officers and this, in turn, will directly relate to the different aspects of the company and consequently what needs to happen with each.

Business operations itself is not something that is set in stone; rather, there is flexibility and the capacity to change things should something not be working efficiently and in the best interest of the business. So, for example, when it comes to managing risks, things can change when new and challenging situations arise. This is when those tasked with risk management may have to pivot and thus take that aspect of business operations in a new direction to more effectively navigate the issue at hand.

How business operations are conducted is also going to depend on industry type to some extent. For instance, if your company is a manufacturer, you are dealing with among other things the supply chain. Supply chains are going to look different given several considerations—some may be much longer than others. This needs to be taken into account in the context of the day to day business operations. The number of employees is also going to vary from business to business and so how the managing of those employees is accomplished under the umbrella of business operations will also vary.

The rate of a company's growth is also going to affect business operations in general. In a smaller firm, one or two people are going to take on the bulk of the responsibility most likely; whereas, in a large corporation tasks will be delegated based upon position and role. As businesses grow, their business operations will have to keep pace and subsequently change with the changing needs of the business.

Defining Business Operations Within a Company's Infrastructure

So, while different industries and different size companies will have variations in terms of their overall approach, there are a couple of mainstays in the realm of operations. Below are a few of the guiding principles that should underline all aspects of business operations within a company:

  • Business operations need to take into account the firm's goals and long term objectives. This way everyone is on the same page.
  • Interdepartmentally there should be communication and a sense of transparency. There is less chance of error this way.
  • Ensuring that an individual is right for their role is so important in terms of making sure that the jobs get done as required.
  • Employing data gathering strategies and analysis when approaching any sort of decision-making task is essential to arriving at the smartest solution.
  • Customer service should without question be at the center of any good business operations plan. Listening to and responding to customer concerns should be a priority.
  • Sticking to a long term overall plan but adjusting when necessary is also part of solid operations. It is a balance between planning and adaptability in the long run.

The Purpose

So why adhere to certain guidelines and practices when it comes to business operations? Simply put, this will determine how well a company fares. Processes need to be in place, otherwise, chaos will ensue. Not to mention, stakeholders at all levels need some sort of map to follow if things are going to run smoothly daily. Ultimately, the inherent value of a business is by and large a function of how well it handles business operations. This is because a company that is well run is generally one that is profitable, and of course, profitable companies are more valuable than those in the red.

Think about a business whose operations are well defined and consequently ensures that things are managed smoothly. They likely stand out from their competitors; they have a steady revenue stream, happy employees, and happy customers. This is why finetuning business operations in the early phase of a company's life cycle is so important.

Operations in large part have to do with business functions. Such functions are often decided upon by company founders and key stakeholders. And again, while these functions may differ depending on a host of factors to include industry type and even business location, some functions are fairly common to most if not all businesses.

  • Communications across the board need to be maintained in terms of conciseness, clarity, and specificity.
  • Leaders need to be trained accordingly so that they can effectively fulfill their roles and mentor those they supervise.
  • Performance between groups and departments needs to be balanced and on point at all times.
  • Budgetary concerns should always be a consideration in the context of business operations.
  • Regular reviews of processes and systems need to be done to ensure that they are working.

What it comes down to is the fact that business operations are what keep a company going forward. Be it considerations dealing with personnel, projects, or overall company goals, such have to be systematized to become maximally effective. Stakeholders also need to keep in mind the rate of business growth, the scope/size of business activity, and the supply and demand element. This in turn will guide those stakeholders to make smarter decisions concerning day-to-day operations.

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