Business Optimization: What It Is and Techniques to Adopt

The central goal of business optimization is to improve a company's efficiency and productivity across internal processes and external offerings. Optimizing a business requires a company to consider several processes—such as supply chain and operations, risk management, and hiring and community engagement—and deeply analyze how they fit together.

Learn more about business optimization, types of optimization, and key techniques to optimize your business. Afterward, if you're interested in learning how to use data to drive better business decisions, consider enrolling in the University of Illinois' Business Analytics Specialization.

What is business optimization?

Business optimization is the process of improving a company's strategy and processes to increase efficiency and productivity, speed up performance, and reduce costs. This can apply to internal operations, such as supply chain management, or to products and services delivered to external customers.

There are a multitude of ways that businesses can “optimize” their strategy and processes. Businesses may choose to elevate the experience and well-being of their employees, identify new revenue streams, reduce supply chain costs or mitigate growing risks, or craft a leaner go-to-market process.

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. 

How does business optimization work?

Business optimization works when there is support from leadership to apply strategic changes in an effort to improve. Typically, this process requires either an internal team, such as a business analytics team, or external consultants to audit a company 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.

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.

5 types of business optimization

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

1. 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.

• Learn how to develop a "change mindset" with Macquarie University's Leading transformations: Manage change course.

2. 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.

• Learn important techniques, drawing from Six Sigma and Lean, used to optimize flow in the Rutgers University Supply Chain Management Specialization.

3. 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.

• Learn how to optimize website content for the best possible search engine ranking with UC Davis' Search Engine Optimization (SEO) Specialization.

4. 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.

• Learn how to build an operational risk assessment program with the New York Institute of Finance's Risk Management Specialization.

5. Pricing optimization

Pricing is critical to a company's success, helping it stay more competitive by attracting new customers and maintaining existing ones. Reviewing data to understand the market, customer needs, and competitors can help a company optimize its pricing strategy.

• Learn techniques to increase price realization and maximize profits with the University of Virginia's Pricing Strategy Optimization Specialization.

Techniques for business optimization

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 space and storage and reduce costs. Many types of project management and business insight tools can also 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 about business optimization on Coursera

Take a course on business optimization and transform your business or career today.

• Explore the subject matter with the six-course Business Analytics Specialization from the University of Illinois. You'll learn reliable ways to collect, analyze, and visualize data–and utilize data in organizational decision-making.

• Develop job-ready skills with the Microsoft Business Analyst Professional Certificate. You'll learn how to model business processes and data using industry-standard techniques and communicate these models effectively to stakeholders.

• Advance in your career with the Google Business Intelligence Professional Certificate. Designed for those with a foundational knowledge of foundational analytical principles, skills, and tools, you'll learn how to create dashboards that effectively communicate data insights to stakeholders, among other important skills.