Systemization Series: Core Functions of Business—Administration

While operations is where your branding can have a big impact on differentiating your business from your competition, administration processes are more similar from company to company.

These processes can be more easily outsourced, and they frequently are in smaller companies.

[However,] "even if you outsource some or all of the processes in this core function, there are systems that need to take place within your organization for proper management."

This seems like a good place to talk about dealing with independent and subcontracted workers, meaning all of the different arrangements your company can have with workers that the federal government classifies as “independent contractors.” When dealing with outsourced entities, your company will need to execute processes to ensure timely and accurate information is delivered to your independent contractors. These systems set clear expectations and aid your independent contractors in performing tasks that meet and hopefully exceed your brand promise to your customers, your employees and the community.

Administration processes are the back-office procedures and operations. They are the support systems for your business, or all of the processes that are not directly related to delivering on your promise to your customers. Systems in this function typically fall into four different categories, listed as follows.

1. Administrative processes

This is processes in your business such as answering the phone, office organization, filing, greeting customers, vendors, everyone who comes to your place of business. List every administrative process you can think of. Remember if you find yourself describing “how” you do something, you may be providing too much detail at this point. Only name the systems in this stage, meaning “what” it is you do and not “how” you do it.

2. Financial processes

This comprises payroll, budgeting, purchase ordering, collections, accounts receivable and accounts payable. List every financial process you can think of. If you have an independent contractor working in your bookkeeping position, there are still plenty of necessary procedures for your company to execute for the bookkeeper to have timely and accurate information. These steps or processes may not all be classified under administration. Often, when you’re thinking about what’s needed in financial processes, the information is frequently collected during operations.

3. HR processes

This includes recruiting, hiring, employee termination, performance evaluation and employee assessments. List every human resources (HR) process you can think of. In this part of the administration quadrant, it’s important to remember the difference between a policy and a process. Policies are the high-level rules and guidelines that show how tasks should be completed. Together, processes and policies give employees guidance in the execution of systems. Remember if you find yourself describing “how” you do something, you may be providing too much detail at this point. Only name the systems in this stage, meaning “what” it is you do and not “how” you do it.

4. Computer-related processes

There are many computer-related things your company needs to do that do not take an IT expert to perform—think of processes that ensure everyone has updated software and applications and simple troubleshooting processes that happen before calling for professional support. For this, consider how much computers are like a mower. When troubleshooting mowers, check the gas and spark first. With computers, it’s the power cord, battery and then doing some rebooting. These things need to be done before taking next steps. Other computer-related processes include backing up data, data entry and calling the correct people for support, based on your troubleshooting processes.

Next, we’ll tackle the management quadrant. Stay tuned.

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