Overview of Business Operations Part 1: The Rising Importance of Business Operations
As product companies increasingly become service companies, business operations, the set of people, assets, technology and processes that create and capture value, are coming to the forefront of strategic differentiation for modern companies. In this 3-part blog series, we explore business operations in detail by understanding why it’s gaining in prominence, the components that make up business operations, and the role technology plays in creating strategic differentiation.
Operations is the new product.
The movement towards SaaS has shifted how product companies think about themselves and their customers. While functionality, design, and user experience are still vital to the success of any product company, winning companies are thinking more holistically about the end-to-end customer experience. They ensure that from the first moment someone sees an ad about the product all the way through the buying, on-boarding, and support process that each customer has an easy, pleasant, and fulfilling experience. In other words, product companies are increasingly becoming service companies.
As companies focus more on customer experience and lifetime value, the role of business operations takes center stage as a critical point of differentiation. Operations across all business functions — sales, marketing, customer success, finance, legal, IT, and HR — are being elevated from cost centers to business drivers. In this first part of a 3-part blog series, we will discuss what makes up business operations, why it’s important, and the immediate opportunities for business operations teams.
What is Business Operations?
Business operations is loosely defined as the set of people, assets, technology and processes that create and capture value for a business. Historically, business operations has been centrally led by strategy and finance teams under the leadership of a chief operating officer (COO) or chief strategy officer (CSO). However, as SaaS software and technology have enabled more distributed organizations, dedicated operations teams have permeated each business function. Function-specific operations teams such as sales ops, marketing ops, customer ops, legal ops, and more now exist in a majority of organizations.
These operations teams are in charge of putting processes around the systems and people in their organization to achieve higher efficiency and productivity for their teams. For example, marketing and sales operations in B2B companies ensure proper processes are in place for turning a potential lead into a customer as it touches various teams within the organization. Legal operations is a burgeoning practice of bringing operational concepts to corporate legal departments in areas such as matter management, contract management, and knowledge management to achieve more efficiency and drive better alignment with the rest of the departments that they interface with.
Why is Business Operations Important?
Normally, the areas of differentiation for a business that come to mind are on things that directly touch customers — product, marketing, and sales — what has been defined as “front-office”. Conversely, the “back-office” functions of operations, finance, legal, and HR, are typically seen as cost-centers — functions to be kept as streamlined as possible to minimize cost, but ultimately don’t impact revenue.
However, with the evolution of business operations, traditional cost-centers are being viewed and measured as business drivers. For example, in recent years, customer operations has been gaining significance. Customer success’ primary function went from maintaining the customer relationship and providing customer support to growing customer confidence and, in turn, reducing churn and maximizing lifetime value. Customer success’ direct impact on recurring revenue led to increased scrutiny on the need to effectively handle customer requests and to proactively engage customers on a regular basis. The customer operations team is at the center of ensuring those goals are met.
In the same way, legal, finance, IT, and HR functions are also viewing themselves as strategic to businesses. In the next part of this series, we will visit operations in each of the various functions in more detail.
The Opportunity for Business Operations
Business operations is at the forefront of enabling each function to achieve their maximum potential with operational excellence. By streamlining processes, automating tasks, and improving end-to-end visibility, business operations allow companies to gain a competitive edge by going faster to market, improving the customer experience, or decreasing operating costs.
Business operations also has a critical role in perhaps an even more important area, defining the future of work. Technology is transforming the way people work for good or for bad. While online conferencing and cloud technology allow more flexible work schedules, automation and AI are eliminating many of the jobs that exist today, such as administrative positions or call centers. People are also demanding more fulfilling work, ones that allow them to practice innately human qualities like critical thinking and empathy.
Business operations is at the forefront of defining processes around systems and people that can tremendously impact how people work at work. By creating efficient processes that allow more flexible and meaningful work while still achieving business objectives, operations teams can create a future of work that is good for both people and businesses.
Tonkean is a people-first robotic automation platform for operations teams to integrate systems, coordinate people, and automate work intelligently without any scripting or code.
