Updated : Jul 06, 2019 in Finance Accounting

Why Is the Operations Department of Any Company So Important?

Why is the operations department of any company so important? To answer this question, Operation managers need to understand that they are interfacing with key functional areas in the business. In order to provide top services / products to the customers, the operations organization will have to have strong relationships with the finance / accounting, marketing, human resources and the suppliers.

In regards to the finance / accounting relationship, the operations manager will receive budgets, cost analysis, capital investments and shareholder requirements from the finance / accounting organization in order to keep realistic controls on factors such as operational cost, any cost that is the result of normal business in the operations organization. In turn, the operations manager provides the finance / accounting organization with information regarding production plans, inventory data and capacity management data.

Marketing is key to the operations department because of their ability to provide operation managers with the sales forecasts, detailed customer orders and customer feedback which can be used to improve the process in the future .. The operation manager would then be able to support the marketing teams by provide information about product / service availability in regards to the lead-time to product / service delivery, the status of orders and detailed information about the schedules of deliver.

Human Resources obviously is key to the operations organization by their ability to recruit qualified employees for the operations organization, provide training opportunities, work legal issues that may arise and perform an union negotiations if they should arise. The operations manager then would provide information about the professional needs of the operations department, what skill sets the organization is looking for, performance evaluations of current employees and detailed information how work is evaluated in the operation organization.

The final function unit that the operations manager interfaces with is suppliers, or vendors, who are normally external to the business unit. The suppliers receive orders for the materials and equipment needed to complete projects, production and delivery schedules, and information about the quality requirements and design specifications as needed. This will result in the operations organization will then receive information about the material availability so that projects can be updated and planned accordingly.

Having a strong operations organization in the business unit is key to running a successful business venture and crucial to building the business for the future. This is the very reason that executive team need to ensure that they have the right operations management team in place that is able to forge strong relationships with the strategic departments for future growth.