You are an entrepreneur and one of your responsibilities is to manage the businesses if you want to grow. On the other hand, managing is in most simplest words can be presented as systematizing of all business activities that must be accomplished in order to ensure that your company will deliver the value for the customers.
So, let’s start first with explaining what the system means.
What is a system?
A system is a set of interrelated and interdependent elements that function and exist in order to transform input into the system into output.
We can notice several things from this words:
- First, it is a set of two or more elements. We cannot say that we have a system without minimum two elements in it and this elements are called subsystems.
- Second, this elements are interrelated between them. What does this means? Elements in the system are connected between themselves so that the output from one element in the same time can be input in another element. The output from the last element is the result from the system or simply said the purpose of the existence of the system.
- Third, the elements are interdependent. Elements in the system are dependent on each other. If there are problems in one element, this easily can make disorder in other elements.
- Fourth, the purpose of the elements is to achieve the goal of the system. They must have a goal that logically is to make the desired output which can be accomplished by functionality of all elements.
Subsystems of the Businesses
For example, we can talk about systems of continuous learning, competition monitoring, communication with customers, communication with potential customers… All of these systems are only subsystems of your business as a whole. If you apply the systematic approach, continuous learning will be a subsystem of the business development subsystem, while the remaining three that I have mentioned here will be subsystems of the marketing. In this way, all above mentioned would look like this:
- Business Development
- Continuous learning
- Competition monitoring
- Communication with customers
- Communication with potential buyers.
- Business Development
Do you have now a better picture in terms of where subsystems belong and who is responsible for their application? Can we now see a bigger picture than previously? Certainly yes, because we can see in which departments are responsibilities for implementation of specific activities to achieve the specific goals.
Are Businesses Really Need to Have Subsystems?
If your goal as an entrepreneur is to build a successful system that will grow, you must apply some of the laws of nature into business. This law of nature is thinking in a form of systems.
Your business will need to have different elements that will be subsystems of the business. The problems in one of them in some cases can cause a collapse of your whole company.
Let’s take a car as an example. If there is a problem in the lubrication, this problem will bring a problem in the engine, then your car will lose the functionality – to transport you from one place to another.
How to Identify Subsystems in the Business?
The answer is simple. Start to systematize your business. Yes, your job as an entrepreneur is to organize your own business. It is easy to answer, but much harder to implement. So, I will try to simplify this with several steps of implementation.
1. What are the goals of your business?
Always start with your business goals. If your business goal is to sell products and services to final customers, ask yourself what you need to do in order to achieve this goal. What you need to do: produce or buy that products? Already we can figure four possible main elements as a marketing, production, research and development and supply. Now you must ask several questions. How I can produce wanted products and services? How I can use research and develop? How I can supply these products and services to final customer? These answers will start shaping all the necessary elements as a subsystems of your company.
Next what you need to do after you have a finished product is to sell them to the customers. For this purpose, you need the following elements: marketing, sales and finances. And again here we must answer several questions. How I can market my products? How I can sell them? How I can collect payment?
2. Find dependencies and relationships.
Place all elements that you discover in previous step on the paper in a hierarchical order. Look at them and note all possible relationships and dependencies between them.
3. Determine the activities.
Determine all activities with a brief description of them and place them near all identified subsystems.
It is important all subsystems with all activities to be documented. This process will tell you exactly what is the responsibilities of each of them and what activities must be implemented from which. This documentation will produce working procedures for your company.
After documenting you must test all of them to see are they bring results as you have planned. The purpose of testing is to find possible problems and solve them.
If you have not implemented these systems, and they are only on a paper, your effort will be for nothing.
7. Track and improve.
Something that is really important for your business is that systems will allow you easily monitoring of their performances so you can find all areas of possible improvements. And improvement is something that is continuously, an integral part of any system.
Read more about the benefits of implementation of the business systems.