Operational Review Defined
How is your
business going? This is a cliché most often heard on a simple get-to-together
to initiate a conversation.
Faced
with growing competition, businesses are finding ways on how to step up the
company’s performance especially in various cutthroat industries where
innovation and good management can make or break the company. This is the
reason why nowadays, businesses place greater emphasis on the evaluation of the
efficiency, effectiveness, and economy of its operations.
The
operational review holds the key to keeping your company on top. But what
really is an operational review? And how does it fit into a company’s goal of
staying ahead, or at the very least, at par with competition?
An
operational review is an in-depth and objective review of an entire
organization or a specific segment of that organization. It can be used to
identify and address existing concerns within your company such as communication
issues between departments, problems with customer relations, operating
procedures, lack of profitability issues, and other factors that affect the
stability of the business.
Operational
reviews allow the organization members to evaluate how well they are
performing, given that they perform appropriately according to the procedures
set by them, allocating their resources properly, and performing such tasks
within time frame set and using cost-effective measures. More importantly, it
also shows your company how well it is prepared to meet future challenges.
Simply
put, the goals of an operational review are to increase revenue, improve market
share, and reduce cost.
The Bigger Picture
It simply
goes to say that an operational review allows the management to see their
company in a different light — a larger perspective. That is, it gives the
management the opportunity to evaluate if the entrusted resources were used
wisely to achieve the desired results of operations.
Furthermore,
operational reviews provide a comprehensive assessment of authority in that it
defines expectations, and grants power within the organization because feedback
can be given as to whether the job is being done the right or wrong way, and on
what areas the company can excel and improve on. Overall, the success of an
operational review can be summarized into a phrase by the great Aristotle, to
quote: “the whole is greater than the sum of its parts”.
Are you
able to view your own organization as a whole from an objective angle? Do the
different departments complement each other so that they form a cohesive unit
that boosts your business in the right direction?
With our
comprehensive assessment of your organization’s current systems, operations,
processes, and strategies, our operational review programs aim to help you in
achieving these lofty goals: to improve business profitability and identify
incompetence in both operations and organizational systems.
The Benefits of an Operational Review
The main
objective of an operational review is to help organizations like yours to learn
how to deal with and address issues, instead of simply reacting to the
challenges brought about by growth and change.
In such
review, the information provided is practical from both a financial and operational
perspective. Using these data, the management can then come up with
recommendations, which are not only realistic, but more importantly, can help
the organization achieve its goals. The review recognizes the extent to which
your internal controls actually work, and enables you to identify and
understand your strengths, weaknesses, opportunities and threats.
To be
more specific, let’s list down the ways wherein an effective operational review
can contribute to the success of the organization. The review process:
- Can assess compliance within your own organizational objectives, policies and procedures;
- Can evaluate specific company operations independently and objectively;
- Can give an impartial assessment regarding the effectiveness of an organization’s control systems;
- Can identify the appropriate standards for quantifying achievement of organizational objectives;
- Can evaluate the reliability and value of the company’s management data and reports;
- Can pinpoint problem areas and their underlying causes;
- Can give rise to opportunities that may increase profit, augment revenue, and reduce costs without sacrificing the quality of the product or service.
Thus,
each operational review conducted is unique, and can be holistic or specific to
the activities of one department.
