Greetings and welcome to 5092 Session 5: Operations and Planning. In this session, we're going to take a look at what are the operations of a tech firm, those internal functions and processes that enable the company to deliver value. We're going to talk about location and facility and the process of moving from product concept into production. What is the planning that needs to happen? What resources are needed and how do we think about time management as we manage the internal functions of the company? One of the tools that we're going to introduce is called the balanced scorecard. It will facilitate strategic planning. We're also going to introduce a little bit deeper the broader subject of business planning and start to dig into the product, the market, and the management, and operations side of each of those component parts. Let's go ahead and jump into Video 1. In this first part, we're going to talk about what are the operations of a tech firm? What does it really mean when we talk about operations management? Well, if we think of just the internal functions of the company, everything from product development, to managing sales, to how the facility operates, all of the strategies, and the planning, and the implementation activities are a part of operations management. In a sense, we are effectively delivering on the value proposition to our customers. These are the internal mechanisms, the internal operations of the company to be able to do that. Let's dig a little deeper though. What does that actually mean? Well, you might recall when we introduce the value chain that we described different parts of the value chain, parts that sustain value and others that create value. We want to make sure that we can distinguish between those two and make sure that we're allocating our precious resources accordingly. One of the tools to support our analysis is called Porter's Five Forces. It looks at the underlying dynamics and the internal operations and gives us a framework for assessing our ability to perform and deliver on our value proposition. It guides us to how we might allocate critical resources and effectively integrate learning into the operating process to better enable our execution of strategy. The focus from time-to-time may change with different startups, with different technologies, different market cycles, and what stage of the company a company maybe, or stage of a market a particular company maybe in. All of these factors play into how strategy is implemented, which translates into internal operations or action plans. Ideally, the company would like to focus on those core competencies that create value. These are the leading edge knowledge and skills, the real capabilities of the team. I strive to maintain a center of gravity around the focus on those core competencies while recognizing that they're essential activities, they're important, but they sustain value. They support the functions of the day to day operations. Ideally, the functions are more centered on our core competency. Then the underlying support is what we call essential. It's foundational to our primary focus. But our center of gravity, our real focus is on those core competencies. With this perspective, it helps us to recognize there may be conditions where we choose to outsource some of those essential activities so that we can focus more on our core competency or focus on that part of our operations that is actually delivering and creating value. This can be especially important in the early stage of a tech startup. One example is just accounting services, for example. When you get started, you still have to track money, and have proper accounting, and records, and books, and so forth. But maintaining an individual internally to do that full time or even part-time may not be practical and outsourcing maybe a very worthwhile consideration. It's a practical way of how to manage the precious resources that we have going forward. If we think about what are the activities that actually create value? Well, here's just an example of some of those. Developing the technology, the intellectual property and that focus on translating that technology into a product or service that delivers value to our customers. That's what we think of as productization. Then the marketing and sales, the ability to distribute that value and the processes and procedures that go in place in order to make that happen, to enable that capacity. The digital integration with our core operations that can leverage our core capacity by integrating the different elements of the product development process with the marketing and sales and distribution process. This has a buzz name nowadays, digital transformation, but essentially recognizing that every aspect of our company, of our function, of our operation ideally would be able to communicate with every other aspect and keep an oversight such that we recognize where adjustments may be required or how things are intimately connected. But getting back here, the essential activities, we talked about the activities that create value, those essential ones that sustain value or underpin the functions of the company? Well, obviously legal and the various things that go along with that whether it's compliance or contracts or insurance, etc. Human resources, how do we recruit and compensate? Oftentimes these HR can be outsourced as well. Product and customer support, warranty or advertising, that stuff and follow up and of course, all the office management activities. Outsourcing is a viable consideration especially if resources are limited and it where that early growth stage of the tech startup, where we want the focus to be as much on our core competency and our ability to function as the business is in its actual operation and move with that as it develops towards actually producing and bringing on the need or the requirement of these other functions, be they essential or focus of creating value. Then we bring those functions in-house and we begin to ramp up and scale as the business ramps. But in the early stage, we look at how we might consider outsourcing, or at least it's a strong recommendation. The critical resource and allocation management, includes things like knowledge of staffing, finance, that digital access we talked about, and the ability to formulate and execute strategy that integrates the learning process. This is essential in our management of our internal operations we're constantly monitoring performance, constantly looking at how the action steps of implementing strategy and then looking at various ways to capture and observe our responses, our ability to meet our goals and objectives, to critique that information or that data if you will, and feed it back into our process to make any necessary adjustments or as time goes and as things change and as conditions evolve. Market research and analysis will also inform our operations. Integrating all these different aspects of gathering information to the operational process which ultimately would translate into action steps and tactics that are meeting our specific goals and objectives. Above a very important part of this is developing and maintaining our capacity to scale or meet the threshold associated with market demand. This requires a continuous research and analysis and looking closely at how we forecast sales and also the ability to identify critical resource needs and make sure that our pipeline, our supply chain, and our association with suppliers are in alignment with the market need and demand and we have the appropriate flow in order to be able to begin producing and delivering our products and services. We've given a broad stroke overview of what technology operations are. That ends Video 1 of 7. I'll see you shortly for Video 2.
