Business Optimization: What It Is and Techniques to Adopt

Business optimization is a broad topic and a process that encompasses many processes and moving parts. At its core, the goal is for a business to improve efficiency and productivity–which it can do in several ways. Applying business optimization requires an organization to consider its processes, such as supply chain and operations, risk management, hiring and community engagement, and more, from a holistic perspective. 

This type of work requires deep analysis of these parts of a business and how they fit together. More recently, big data, artificial intelligence (AI), and machine learning have allowed businesses to manage and analyze that data much more efficiently, leading to greater strides in optimization. 

In this article, you’ll learn all about business optimization, types of optimization, and key techniques to optimize your business.

What is business optimization?

Business optimization is the process of improving an organization's strategy and processes to improve efficiency and productivity, in ways that speed up performance or reduce costs. This can apply to internal operations, such as supply chain management, or to products and services it delivers to external customers. Big data and AI have increased the potential for companies to optimize.

Businesses may also choose to elevate the experience and well-being of their employees, to develop a culture that permeates to their customers. They may identify new revenue streams. They may try to reduce costs. They may craft a leaner supply chain model. There are a multitude of ways that businesses can “optimize” their strategy and processes.

How does business optimization work?

Business optimization works when there is buy-in from leadership and executives to apply strategic changes to improve. Typically, this process requires internal or external consultants to audit the organization and deliver expert recommendations on improving the current processes, tools, and more. An expert opinion is able to recognize which parts of the business are a priority, and which parts can be improved quickly (“low-hanging fruit”).

Then, the organization sets out to execute those recommendations, usually in a step-by-step fashion. Leaders may hire an organizational change management expert to help facilitate the process or empower internal leaders to participate in the transformation.

4 types of business optimization

Because business optimization is a broad topic, we’ll dive deeper into several types of business optimization. 

Change management

When an organization is in the process of change management, it involves crafting a strategic plan to assess what change is needed and how to implement it in an integrated manner. Digital transformation is a type of change management that involves adopting cloud technologies and other technological innovations. Other types of change management include leadership turnover, mergers and acquisitions, or changes in staff and structure.

Supply chain optimization

Supply chain management utilizes supply chain analytics to determine where production, storage, and shipping can be more efficient and productive. That may include implementing new technologies and software, or cost-cutting strategies like adopting a lean supply chain approach.

Search engine optimization

This aspect of top-of-funnel marketing can be a huge lead generator for an organization. Search engine optimization (SEO) involves targeting those searching for content on search engines such as Google or Bing and securing a search result link at the top of the page.

Risk management

When a company is tasked with managing risk, the process looks similar to other business optimization processes, where risks are identified, evaluated, treated, and monitored.

Impact of big data, AI, and machine learning

There are many ways that big data, AI, and machine learning have transformed the way that data and analytics factor into business optimization. From gathering data from every piece of the business to external and internal data, algorithms and software automation tools allow organizations to conduct business better and faster every day.

Techniques to optimize your business

Here are some techniques that you can use to optimize your business.

Leverage data insights.

The insights you gain from AI and machine learning can be used to elevate your business to increase productivity and efficiency in human resources, finance, marketing, IT, and beyond.

Test and implement cloud-based software.

Cloud-based software is one of the easiest ways to save on space and storage–and reduce costs. There are also many types of project management tools and business insight tools that can help your teams work more efficiently.

Conduct a holistic analysis.

If you’re serious about business optimization, you might be interested in hiring a consultant to conduct a holistic analysis. Sometimes getting a third-party perspective and expert recommendation is what it takes to understand why and how changes can be made.

Learn how to optimize your business

Take a course on business optimization and transform your business or career today. Consider the Pricing Strategy Optimization Specialization from the University of Virginia, where you’ll learn how to create pricing strategies that reduce costs and appeal to customers. The Supply Chain Management Specialization from Rutgers University addresses the complexities of today’s global economy. Enroll in Coursera Plus today for a free, seven-day trial of learning.