Business Organization (for small to medium organizations)

The crisis is over, and we are back to business as usual. Well, this is the time to make some big decisions. Do we really want or need to go back to business as usual?

Many organizations are slowly starting their operations. For the decision-makers, it is a great opportunity to sit back and analyze their business organization. Is the setup of the organization optimal? Is the organization set in an effective and efficient way to achieve the goals, taking into account the vision and mission? Below is some advice that can help with analyzing your business organization. At the end, a simple example is provided.

Business organization consists of three major elements. These elements are:

• Processes
• Human resource and
• Aids

Processes

This is the most important element of each business organization. Through processes, products or service are delivered. Some organizations have few processes while other have many. Processes can be simple or very complicated. The important thing is that the processes are managed in an effective and efficient way to reach the goals of the organization. The most important part of the process is that someone have to be in charge and responsible for the process.

Processes are divided in different procedures, normally involving different departments. Procedures consist of different task that have to be executed conform agreement between all involved in the process. The focus has to be the goal of the process. The one in charge for the process has to make sure that all procedures are executed following the agreement. It is of great importance that everybody involved in the process is aware of the agreement.

There are several methods to capture the agreement so it can be available for everyone.

The challenge is to set an effective and efficient process. Some organizations can do it on their own, others may need help. There are several consultants and adviser that can help with this. Do an in-depth research before engaging with one.

Human Resource

Once the processes are clear you need people to be in charge and to execute it. The right person on the right place. Based on the processes, the organization has to come up with the human resources needed. Finding the right people can be challenging. The best ones may cost too much or are unavailable. Here, you also have several consultants and adviser that can help.

Sometimes one must balance the abilities of the employee with available aids. An employee with the right aid can boost productivity.

Once staffed properly, it has to be clear what the organization needs and expects from everyone. The processes have to be clear for everyone involved.

Aid

Most processes involve the use of aids to produce the goods or deliver the services. The aid varies from a pen to warehouse, to automation systems and so on. Based on the operation one must decide which aid are necessary. Necessary aids can be dependent on the skills of the one using them. That is why this element is closely connected to the HR element.

With automation aid, one must be very attentive. The objective is to have the aid helps with the process. Much too often it is the other way around in which the processes are adapted to the automation aid. That is not an efficient way to invest in automation aid. Be aware when seeking advice in this area. More on this topic will be discussed in another article.

Example

Let’s take an example of a retailer selling household appliances. The basic operation involves the following processes:

• Purchasing
• Warehousing and
• Sales

Each process consists of deferent procedures (operations). Each procedure consists of different tasks and may involve different departments. Next, a simplified description of each process is provided.

Purchasing

The goal of this process is to buy products for sale. Procedures in this process are:

• Deciding what to purchase
• Placing the order
• Receiving the products.

When deciding what to purchase, the sales department has to be involved. After deciding what to purchase, the order is placed after considering different alternatives. When the products arrived, the purchase department checks the delivery and the warehouse department stocks them. The products are ready for sale or subsequent delivery.

Warehousing

The goal of this process is to store the products. The main procedures are:

• Receiving the product
• Delivering the products and
• Accounting for the product

Receiving the products here involves different tasks than the purchase process. Here the warehouse department must account for the amount and location of the products. After receiving information from the sales department, the product must be delivered.

Sales

The goal of this process is to sell products. This involves the following procedures:

Informing buyers of available products

Selling the products and

Arranging delivery

The potential buyers have to be informed of the available products. This task is mostly done by the marketing department. Selling the product involves agreeing on the price and arranging the payment and delivery. The warehouse department execute the delivery.

To execute those processes the organization need the right persons and aids. That includes persons with knowledge of purchasing and selling appliances. Also, it needs a warehouse and a transportation vehicle. The challenge is to have the right persons and aid to help the organization with its processes.

Again, this is a very simplified example. Detail may vary for each organization. More importantly, the processes should be clear to everyone involved and that the process owners take responsibility.

Kazina Business Consultants is glad to support your organization with any analysis and implementation.

The art of information (“informatica”)

If you search for the meaning of the word “Informatica” you will find many different definitions of the word. Most of them refer to automation technologies, but almost everyone refers to the art of information as basis.

The survival of any species depends on how they manage the art of information. A plant knows where to find nutrition and water. An animal knows when, where and how to hunt for food, as do humans. The main difference between humans and animals is that humans are more capable at storing and manipulating information. Especially in the last millennium, humans have developed aids to help with the storage and manipulation of information. One of the most widely used aid nowadays is the computer.

In business, the challenge is to dominate the art of information to have an advantage over competitors. In the 17th and 18th century, the Dutch dominated the world seas thanks to the information they gathered on how to navigate using the stars and other geographical information.

However, they needed to collect the data to have the information. In this case, data is unorganized raw facts while information is data that are processed, structured, and presented in a useful context.

Today we have computers to process and analyze copious amounts of data in a fraction of a second. That does not mean that the output can be considered information. To be considered as information, the output must be something that can be used to take action.

Those actions help with reaching the goal of the organization.

As stated above, data is collected and analyzed to produce information. The quality of the information is totally dependent on the quality of the data collected. Therefore, it is very essential that the process that produce the data is optimal. One can have the most sophisticated computer but if the input is not of an acceptable quality the output would not be either. In computer science this is known as GIGO or “garbage in, garbage out”. When faulty data are fed into a computer, the information that emerges will also be faulty Data is collected in a process.

That process must contain procedures and task that can guarantee the quality of that product (information). In addition to this, every process has to have an owner that is responsible for it.

No organization has as goal to have an ICT department. So, the department must understand that they have to aid the organization to achieve their goal. The organization have processes to help achieving their goal. ICT department must support those processes, not the other way around.

In this time of crisis is the moment to analyze your organization, to evaluate the availability of the necessary information as well as its quality. Kazina Business Consultant is here to help you.

The future for ARUBA

As stated in my previous article, (quality) information is the key for every successful organization. The use of information technology (IT) helps to achieve that. Nowadays, the term IT has been expanded into ICT, or Information and Communication Technology. Communication of the available information to all that need it is of essential importance. As organizations have operations around the globe and in different cultures, the challenge is to have a consistent interpretation of the communicated information.

Information systems produces information in different forms. Ideally, the interpretation has to be unambiguous when the information is communicated. For that, a standard is needed for the form of interpretation of the information that is communicated. This will facilitate the communication of the information.

Papiamento is a good example of resolving communication problems. In the past, people from different places with different languages and different cultures needed a way to communicate with each other to do business. So, the Papiamento language was created from a mix of different languages.  Through Papiamento, unambiguous communication was achieved among different cultures.

In Aruba, we can use the method of how Papiamento is developed to help with developing a standard way of interpretation of communication between different information systems. As with Papiamento, the goal must be unambiguous interpretation. This will help with eliminating misinterpretations of the communicated information. Global operating organization will benefit immensely with such a product.

Some years back, there was an initiative from the Aruban government for such product. Now that everybody is talking about the diversification of the Aruban economy, this would be an idea to consider. I think that our telecommunication company, SETAR, should coordinate such project.

Research facilities of the refinery can be used for initiatives such as this. The surrounding is ideal for such a project. This can be an attraction for other field of research which will help with the diversification of our economy.

Now is time for the government to pull such development.