The relationship between functional areas in a business and their relationships with each other is an interesting subject for those of us that are notalegals.

What does functional area mean anyway?

According to Webster it is “the part of an organization that deals with the day-to-day performance of specific tasks or processes”. It is easy to see then why the relationship between functional areas and each other is so important to the success or failure of any business.

The first step in any business improvement process should be to examine the relationships within the functional area. This means determining what the customers need and what the organizational needs are. There are multiple ways that this can be accomplished. For example, the order of business may be to establish a customer service desk where orders can be placed and handled, or to implement a new sales process that will allow the sales team to contact the customers after the sale has been completed.

• Once the relationships among functional areas in a business are determined it is necessary to determine what is going wrong.
• Many businesses make the mistake of not paying enough attention to the relationships among the functional areas in their business.
• Often times they spend far too much time correcting one problem area while ignoring or rarely addressing another problem area.
• This is a mistake that can be easily avoided if the owners take the time to notice the interrelationships among the functional areas in their business.

The second step in taking the relationship between functional areas in a business and their relationships is to identify the problems. When I say problem areas I am not talking about problems that exist only in the functional area of the business.

 I am saying things like: is the inventory tracking system giving you accurate information about the products that are being purchased? Is the order processing system by giving you accurate information about the orders that are coming into the business?

Are there things going on with the customer support system that are causing you to lose business?

Once you have the problems identified then you need to go back and fix them. Many times the things that you need to correct are things that are easy to do and are minor changes. If you have a major change such as purchasing an entirely new product line, it may be in your best interest to consider turning those orders around and placing the new orders with the supplier.

In conclusion, in order to understand the relationship between functional areas in a business it is important to take the time to look at the relationships among the functional areas. Then when problems begin to arise, you need to go back and identify the problems. Once you have done this you can turn the situation around. You can also make adjustments to the processes that you have in place. All of these things can help you improve your bottom line and make you more profitable.