Monitoring and structuring the day-to-day running of your business toward achieving your business goals can be an arduous task without some element of operational management. Therefore, a clear understanding of the attributes, features and characteristics of these daily operating procedures is critical for the viability of any establishment.
The characteristics of business operations involve essential components that facilitate a business’s daily running toward attaining its ultimate goal: Profitability. They also include all attributes relating to human and material resource management, leadership factors and return on investment to create guidelines for streamlining business activities toward achieving their end goal.
Business operation is the lifeblood of any enterprise. Thus, an establishment cannot function effectively without an operations management team. Although business operations are different for every organization depending on the size, nature and available resources, the characteristics of business operations in this article will help you streamline your operational needs.
Business operations are the activities that a company uses to produce and sell its products or services. These activities can be divided into three main categories: production, sales, and administrative. Production involves making the products that a business sells. Sales involve finding buyers for these products, and administrative involves running the business itself. Each of these categories has its own set of characteristics that make it unique.
What Are the Elements of Business Operations?
Business operations include all plans and strategies involved in running all factors of production in any organization. As a result, a clear understanding of the elements of business operations opens the door to harnessing business operations’ features, characteristics and attributes as a management system toward attaining organizational goals.
Essentially, the operations manager is in charge of any organization’s business operations management team and is concerned with the following elements to keep the ball rolling. Here are the principal elements of business operations as an integral part of the characteristics of business operations for a profitable outcome.
Supply
The supply chain is vital in business operations management and involves gathering and harnessing all raw materials for company production. Essentially, the company supply plays a critical role in organizing and managing all factors of production, which consequently affects resource management.
As a result, companies often seek supplies from cheaper and reliable suppliers to cut down on exorbitant expenses.
Efficiency
Business operation managers are more interested in improving the efficiency of their establishments in all areas of business. For instance, they oversee employee efficiency and the planning and execution of programs and projects.
Efficiency also involves managing automation and involvement of technology in the workplace. The idea is to increase turnover and improve output. This way, the business will increase productivity while reducing time involvement.
Reliability and Adaptability
Any establishment’s productivity is predicated on its production process’s reliability. Also, the establishment needs to attain reproducibility to enable it to withstand sudden changes in the market to increase adaptability.
Through effective operations management, the organization should be able to adapt to new competitors entering the market, market trends and shifts, and price actions, including technological changes. In addition, a reliable and adaptable organization should maintain all aspects of necessary adjustment while improving on reliable business practices.
Effective Quality Control and Assurance
Quality control is not restricted to the final aspects of production as it is more effective from the outset. Essentially, businesses improve the quality of their output by optimizing the production process from the get-go.
The reason is that the production process is a subtle chain reaction where a fundamental error in the initial process can affect the entire outcome and ruin the company’s goodwill. Therefore, improving each step in the production process is critical for maintaining efficiency, quality control and quality assurance.
Additionally, business operations managers demand customer feedback to enable them to identify any errors in the production process. The reason is that all production efforts go to waste if the final product does not align with the company goals and objectives.
How To Use the Elements of Business Operations To Improve Organizational Effectiveness
Improving business operations directly impacts the overall effectiveness of the organization. For instance, when an organization purchases affordable supplies for production while coordinating and managing the essential elements of business operations, it raises the company’s competitive advantage.
This way, the company can stay in business while competing favorably with similar establishments in the market. However, there is a thin line between operational effectiveness and strategy, regardless of how closely related they appear.
The operational effectiveness of any organization refers to the quality, productivity, and efficiency of the company as it relates to the organizational goals. Essentially, the organization will be unable to maintain a good competitive advantage without operational effectiveness.
In contrast, the strategy involves every unique approach the organization implements to achieve essential company objectives. Every organization needs to discover strategies peculiar to its goals and objectives.
For this reason, strategic management is an integral aspect of business management and finds expression in operational management. Developing a strategy requires profound creativity to differentiate the organizational process from the competition to stand out.
Why Is Effective Business Operations Critical?
Establishing effective business operations is critical for ensuring that the organization meets its target by galvanizing all resources within its reach toward steady production.
Here are some of the importance of business operations in any organization:
- It increases organizational productivity
- It helps to reduce the cost of production through strategic management
- It preserves corporate resources (material, human and capital)
- It boosts corporate return on investment and increases revenue
- It sets up an organizational framework and infrastructure for production.
What Are the Components of Business Operations?
The five critical components that constitute business operations are inevitable for establishing a deeper understanding of the characteristics of business operations as an aspect of organizational management. It involves a great deal of employee management, assigning roles by both project and program managers to keep all organization members in synchronicity.
Here are five essential components of business operations to which the operations manager must give adequate attention:
Coordinating Roles and Assigning Responsibilities
Choosing the right candidate for any organizational task and ensuring that the candidate possesses the requisite skills for effective delivery is a vital component of operations management.
Project managers also ensure that duties are assigned according to employee strengths, requiring a careful study of all team members. The reason is that different employees possess different skillets, all of which are valuable to the organization if you know how best to harness them.
Overseeing Internal Communication and Engagement
Communication is the organizational glue holding all company members together in a bond that facilitates the execution of organizational goals. Internal communication is critical to maintaining a harmonious work environment, including building a healthy company culture.
As a result, maintaining internal communication, whether in person or virtually, is vital for accomplishing programs and projects on time. Examples of internet communication channels include but are not limited to emails, group chats, business meetings, seminars and workshops.
Resource Allocation and Management.
Operational management also involves resource management and allocation, including material and human resources. Essentially, the business operation related to resource management balances cost and supply procurement.
As a result, an organization would have effectively managed its resources when it can generate more than its initial investment, including resource consumption.
Business Planning
No business can achieve its goals without a plan. Essentially, a business plan is a principal requirement for starting a business. However, writing or creating a business plan is not restricted to the initial process of setting up the business. The reason is that business operation is dynamic, and so is the market.
Therefore, an effective company needs to consistently review its business plan, adjusting it to suit its goals and objectives at a particular time. The business plan forms the blueprint that the program managers and the entire operations management team need to coordinate all aspects of the organization toward its goals.
Encouraging Employee Compliance
An organization cannot attain success without compliant workers. Similarly, complaint workers are essential for achieving company goals because it depicts a unique structural alignment between the organization members and the company goals and objectives.
Employee compliance is responsible for employee efficiency. It also encourages a healthy work or company culture by creating a conducive environment for everyone to contribute their skills and expertise toward achieving company goals. It also includes the human resources management capacity of the firm and the drafting of organizational rules and regulations.
Factors That Guarantee Success in Business Operations Management
The factors that guarantee success in business operations management include product, market, funding, and the human element. Here is how they operate and how you can harness their effects.
Product Factor
Your company product includes a unique offer you have to make to the public that meets a specific need or solves a particular problem at a reasonable price. Here are effective steps to harness your product quality for business success:
Provide Better Services
Your business should offer better product services and utility than other products in the market. The most effective way to increase sales of products and services is to highlight the needs your product meets and the problem it solves. This way, you can convince your customers to patronize you instead of your competitors.
Optimize Your Product Claims and Offers
It includes how well you present your products and their utility. An effective way is to specialize your goods and services to provide services to a specialized group of people. You could also create ways to make your company stand out for a particular positive service.
Fix Your Product Pricing
No one wants to buy an overpriced commodity or pay for an overpriced service. On the other hand, you will not make any profit if your products and services are underpriced. Infant, there is a weird relationship between underpriced goods and sales where the lower the price, the lower the sales because people assume your products are of low quality.
In this case, you must keep your products reasonably priced to guarantee sales. It would be best if you kept your prices high enough to inspire sales and make a profit while maintaining an affordable price to retain your customers. An effective strategy is to source your materials and supplies for production from wholesalers and manufacturers to reduce the cost of production.
Market Factor
The market factor in business operations considers the ready availability of people to consume your product. Therefore, when a ready population needs what you have to offer, you can say that you have an available market for your business. The market factor requires three essential ingredients for your operational management to thrive, and they include:
A Marketing Plan
Your marketing plan is your business advertising and branding strategy. It involves all your efforts towards creating more awareness of your product and including your target customers. Also, being strategic about your products means having a unique message to sell to the public about your company products (goods and services).
Additionally, you can utilize the power of digital marketing through e-commerce to increase your outreach and advertising coverage. Here are effective marketing methods to boost your product marketability.
Conduct a Marketing Strategy Performance Evaluation
Your marketing performance evaluation is where you test the efficacy of your marketing strategy. The key is to analyze what works to increase sales and what doesn’t. Essentially, a SWOT analysis helps put things into perspective for the marketing and sales team as part of the business operations management strategy.
Below are key aspects of your business to consider when evaluating your marketing strategy performance:
- The competitiveness of your pricing
- How authoritative is your branding
- Customer satisfaction
- Product efficacy
- Supply chain effectiveness, etc.
Customer Retention
It is one thing to get customers when your product hits the market, but it is also another thing to retain the loyalty of your customers. Successful marketing is not to gain new customers but to retain old customers while gaining new ones. As a result, proactive moves like maintaining consistent communication with your old customers are essential.
For instance, you can use cold emails, monthly newsletters, thank you notes, remembering your customer’s birthday, special greetings etc. Maintaining intimate communication with your customers might involve obtaining further information about them.
Additionally, suppose you engage in e-commerce and digital marketing. In that case, you might customize your website to show customers advertisements based on their shopping habits, etc. However, your business should be able to protect customer information, especially in today’s world where cyber insecurity is real.
The Financial Factor or Funding
Every successful business needs sufficient funding as investment, and here is how to go about it through operations management:
Create Your Organizational Financial Projects
Your financial projection is an extension of your business plan with emphasis on the economic possibilities of the business. Essentially it is a futuristic analysis of how financially well the company is and its potential to survive the initial business months.
A financial expert comes in handy to assist with planning the finance and funding of your business to secure the possibility of a healthy ROI. It also involves a significant understanding of businesses’ investment process, including cost, profit, losses, savings, etc.
Build Multiple Sources of Revenue For The Business
Building multiple revenue systems for your business involves diversification of your business investment. However, this option is only possible after your business has survived the competition in the market and generated a significant return on investment.
You can invest in product or service diversification to increase market dominance and create a recurring and consistent cash inflow. It is also an excellent opportunity to experiment with a new product line to see how well it thrives in the market.
The Human Element
The human element involves all human resources at your disposal to advance your business. It is the efficacy of a progressive and efficient team and hinges heavily on organizational management and hierarchy.
It also involves some degree of networking and forming alliances for better business sustainability. As a result, business-to-business relationships are forged between businesses to foster mutual interest.
Additionally, your staff strength is part of the human element of your operational management process. Therefore, investing substantially in team building and maintaining a healthy work environment is essential.
Is Business Operation the Same As Business Management?
Business operation is not the same as business management. Essentially management refers to the administrative process of coordinating organizational activities. In contrast, business operation refers to the schedule of activities involved in the production process of an establishment toward attaining its goals.
Here is a comparison table explaining the difference between both business concepts.
| Criteria for Comparison | Business Management | Business Operations |
| Meaning | Involves all administrative processes of coordinating the people and events in the company. | Involves the coordination of the production process of the organization. |
| Area of concern | It is concerned with administrative and managerial roles. | It is concerned with planning, organizing and controlling daily organizational activities and functions toward production. |
| Main focus | Focus is directed at the entire company instead of specialized. | Focus is directed on the daily activities towards attaining organizational goals. |
| Examples/Application | Financial management or human resources management. | Manufacturing of products, transportation and supply chain. |
| Organizational coverage | Management applies to all aspects of organizational transformation as a universal concept. | It is restricted to only the production unit of the organization instead of the entire organization. |
Frequently Asked Questions
What Constitutes the Business Operations of a Company?
A company’s business operations include all eventualities that happen within the establishment to maintain a smooth running of the regular activities leading to a successful production.
What Is Business Operations Management?
An establishment’s operations management includes all business functions related to producing goods and services. They include planning, organizing, coordinating, and managing resources for the company’s production of goods and services.
What Is the Business Operation Strategy of a Company?
The business rationale strategy of a company involves the decision-making process that informs the organization’s long and short-term goals. It also includes all specific actions of management toward achieving particular company goals, especially in program management.
Final Thoughts
Now that you understand the essential characteristics of business operations, you can effectively assign roles and responsibilities within your establishment to ensure the realization of your company goals. Also, as business increases in specialization, you will know what elements to feature to generate a successful output. Hopefully, this article gives you a head start!
