the-difference-between-systems-and-processes

Your business can have solid products + services, clear direction, great branding, strong leadership and dedicated staff, and yet if you miss this piece of the puzzle, time will be wasted and targets won’t be met.

I’m talking about systems and processes…. the glue that holds your business together.

Without systems and processes you’ll work longer hours than is necessary and won’t be able to take a holiday, lest your empire crumbles.

Without systems and processes, you’ll have weekly team meetings but still spend a huge amount of time explaining things, discussing issues that keep cropping up and solving problems that could have been prevented.

In short, without systems and processes you’ll feel as if your business runs you and not the other way around.

“It is not enough to do your best; you must know what to do, and then do your best.”
~ W. EDWARDS DEMING

(1900-1993: American professor, author + management consultant)

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THE DIFFERENCE BETWEEN SYSTEMS AND PROCESSES
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SYSTEMS help you run the business and is made up of several sub-systems, processes and technology.

In fact, your entire business is a system in itself with several core systems that help to make the business work.

Systems can be found in all business areas e.g.

  • Operations systems
  • Finance
  • Marketing
  • Sales
  • Customer Service
  • HR
  • Admin
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SOFTWARE SYSTEMS
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Are mostly, but not always, cloud-based computer programs used to perform a particular function e.g.:

  • Accounting: Xero, MYOB, QuickBooks
  • Admin: Dropbox for file storage + sharing
  • Marketing: Capsule, Infusionsoft, Aweber, MailChimp, Ontraport (Customer Relationship Management systems)
  • eCommerce: Paypal, Stripe, ConvertKit
  • Operations: e.g. SAP is an Enterprise Resource Planning (ERP) system to help large businesses manage + control sales, delivery, operations, production and inventory.
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Think of business systems as the umbrella and business processes as the spokes that hold the umbrella up.

Most of the time you’re not even aware of the actions you take, until you need to explain it to a new employee or a business consultant like me coming in to assist the business.

A process is a series of steps or actions performed to achieve a particular goal and forms part of a larger system.

The steps are linked to each other, where each step affects the efficiency (success or failure) of the next step. The process can be manual or automated and should ideally be documented.

As a visual person, I find it very helpful to map out business processes as a workflow of steps e.g. the steps you follow when someone asks for a quote via your website.
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TYPES OF PROCESSES
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Like with systems we find processes in the areas of management, financial, sales, marketing, operations, product/service delivery, customer service, HR – basically in all areas of your business.

Here are only a few examples of business processes:

  • Financial e.g. the invoicing process or credit checking process
  • Operations/ Manufacturing e.g. a planning process, product assembly process or a quality assurance process
  • HR e.g. recruitment process, staff on-boarding process, complaint process, staff exit process, holiday/sick leave request
  • Marketing e.g. customer on-boarding process or follow-up process.
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BUSINESS SYSTEMS AND PROCESSES WILL HELP YOU:

  • troubleshoot day-to-day issues
  • streamline daily operations
  • increase efficiency
  • better evaluate client needs, and
  • on-board/ train new staff.
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FAMOUS EXAMPLE: AMAZON
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Famous brands like McDonalds, Amazon, Fedex, Apple, Microsoft, Virgin and Zappos come to mind as companies who make systems and processes look sexy.

Every second, thousands of customers are searching and ordering products on Amazon and depending on the product, delivery will be immediately (think Kindle or audio books) or within days.

All systems and processes need to be reliable, fast and secure e.g.:

  • Information Systems e.g. to collect, filter, process, create and distribute data
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  • Transaction Processing Systems e.g. 1-click purchasing system, secure payment system and a recommendation system
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  • Supply Chain Management Systems e.g. Customer Relationship Management (CRM) system with all customer information, automated communication systems like emails and an order fulfillment system.
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It’s clear from this example that effective business systems and processes are the backbone of a successful company.

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“94% of problems in business are systems-driven and only 6% are people-driven .”
~ W. EDWARDS DEMING

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Systems and processes become the framework for understanding how you run your business.

Once systems and processes have been outlined + documented, it shows everyone from staff members to stake holders how things are done in the business to get the desired results.

They also increase the value of your business immensely because your business can now finally run without you – nirvana for every entrepreneur on the planet.

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QUESTION:

Which system or process will make the biggest difference in your business right now? Leave your comment below.

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#smallbusinesssuccessskills

Alicia-MenkveldAuthor: ALICIA MENKVELD  Creator of: BUSINESS CONFIDENCE ACADEMY Alicia Menkveld is an award-winning entrepreneur for the last 17 years who loves to travel and lived on three continents to date. She is an international speaker, author and a trusted adviser to small business owners and leaders. Alicia is an authority on business strategy, mindset and productivity for individuals and teams. Streamline your business to support your lifestyle.