We sometimes think that our business is our product; however, many would argue that this is not the case. Our product is what separates us from the rest of the market. The offer that each business has, the benefits to customers, and how it enters the market will vary; this is what makes this product unique and special. Businesses, however, are standard. Standard process means that you don't have to manage it.
Let's take a look at our the different between product and business.
Product - how we change the world
A company's product is what it wants to add to change or add to the market. Every product is different because, if they weren't, why would a customer buy it? Your product will include the following types of decisions:
What are we selling? - Your product is what you sell! This is what you've developed, created, designed, which you want to sell in order to make a profit.
Who are your customers? - Your product will head to different customers, your product offer will be appropriate to them. This will vary between companies.
What is our ultimate goal? - What is the goal of your company? How will your product change the industry you're in, or what will you offer that others do not?
Your company's product is what it sells, and it is what sets your company apart from the competition. When your company gets together to talk, they most likely are looking at the strategy to get into the market, sell the product, and turn a profit. This is different from the business.
Business - how you operate
Business operations are standard. Every business has customers paying for goods or services, suppliers who need to be paid, financial planning and analysis, and financial reporting (statutory, tax, and MIS). Your business, regardless of size, location, or product will always need the following processes:
Order to cash - Your customers want to buy your product! How will you take their orders and fill them? Will they pay with a credit card or do they have to make a bank transfer?
Procurement to pay - How do you choose suppliers? What standards do they need to have? How many quotes will you require to take before coming to a decision? Who approves the contract, the commitment, and ultimately the payment itself?
Record to report - Every transaction has to be recorded somewhere so that you can report them. You'll want to see how your business is performing, and you'll need to prepare external financial reports and tax returns. Your record to report process will make sure that this is simple, easy, and audit proof.
Financial Planning and Analysis - You need an analysis of your accounts, how you're doing, the markets you're doing well in and the ones where you aren't. Similarly, is the company going to run into insolvency? What are its ratios?
Compliance - Some businesses have strict requirements to maintain a certain level of control. Monitoring compliance and reporting this back is an important part of keeping your business running successfully.
These are just examples of the different types of processes which your company will need, but they have nothing to do with your product! No matter what the company sells, they will need ways to ensure that their businesses run the right way.
The benefits of shared services
Sharing these processes with others will keep your company from bearing the costs of services or time not used. Shared services uses standard processes, and since these services are needed in all companies, there's little reason to invest in the costs of maintaining them. Rather, share them with others!
Chayim Messer Consulting can help every company develop standard processes, open shared services centres, and provide solutions to outsource or offshore. Contact us today for a free, no commitment consultation, and we can set up the right plan for you.