When you wake up feeling tired from a long night’s sleep, your morning coffee can be the one thing you’re looking forward to. But what if your coffee machine suddenly breaks down? Wouldn’t it be helpful to understand how it works so you can quickly fix it? This same curiosity for understanding the inner workings of software companies has driven me for nearly 20 years in digital business.
As Dictionary.com defines, business operations refer to the manner in which a profit-seeking company functions. In the case of software companies, the operations involve completing project discovery phases to deliver a software product and generate revenue. However, software business operations are unique as they do not require physical inventory or supply chain logistics. Instead, they need to focus on active users, throughput, conversion rates, and subscription revenue.
Software business operations can be grouped into departments and specializations. The main departments usually consist of people, marketing, sales, and product, while specializations involve revenue operations, development operations, and data operations. At the heart of all these departments lies the importance of people and human resources. Employers should prioritize keeping their employees satisfied, attracted, developed, and retained for better performance and predictability in business.
Software products are created and sold digitally, so an emphasis on a digital technology stack is necessary. Teams should closely monitor and measure their goals and priorities, such as marketing qualified leads, annual recurring revenue, net revenue retention, new product ARR, and throughput.
To determine which business operation your company needs, focus on your metrics and performance. Identify where your performance is off track and where your investment may not be right. Once you identify your needs, you can look into each department’s operations, such as people operations, marketing operations, sales operations, and product operations, to fill those needs and improve your efficiency.
