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Operational Planning: How to Make an Operations Plan

The operations of your business can be defined as the sum of all the daily activities that you and your team execute to create products or services and engage with your customers, among other critical business functions. While organizing these moving parts might sound difficult, it can be easily done by writing a business operational plan. But before we learn how to make one, let’s first understand what’s the relationship between strategic and operational planning.

Operational Planning vs. Strategic Planning

Operational planning and strategic planning are complementary to each other. This is because strategic plans define the business strategy and the long-term goals for your organization, while operational plans define the steps required to achieve them.

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Operational Plan Template

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What Is a Strategic Plan?

A strategic plan is a business document that describes the business goals of a company as well as the high-level actions that will be taken to achieve them over a time period of 1-3 years.

What Is an Operational Plan?

Operational plans map the daily, weekly or monthly business operations that’ll be executed by the department to complete the goals you’ve previously defined in your strategic plan. Operational plans go deeper into explaining your business operations as they explain roles and responsibilities, timelines and the scope of work.

Operational plans work best when an entire department buys in, assigning due dates for tasks, measuring goals for success, reporting on issues and collaborating effectively. They work even better when there’s a platform like ProjectManager , which facilitates communication across departments to ensure that the machine is running smoothly as each team reaches its benchmark. Get started with ProjectManager for free today.

What Is Operational Planning?

Operational planning is the process of turning strategic plans into action plans, which simply means breaking down high-level strategic goals and activities into smaller, actionable steps. The main goal of operational planning is to coordinate different departments and layers of management to ensure the whole organization works towards the same objective, which is achieving the goals set forth in the strategic plan .

How to Make an Operational Plan

There’s no single approach to follow when making an operation plan for your business. However, there’s one golden rule in operations management : your strategic and operational plans must be aligned. Based on that principle, here are seven steps to make an operational plan.

• Map business processes and workflows: What steps need to be taken at the operations level to accomplish long-term strategic goals?
• Set operational-level goals: Describe what operational-level goals contribute to the achievement of larger strategic goals.
• Determine the operational timeline: Is there any time frame for the achievement of the operational plan?
• Define your resource requirements: Estimate what resources are needed for the execution of the operational plan.
• Estimate the operational budget: Based on your resource requirements, estimate costs and define an operational budget.
• Set a hiring plan: Are there any skills gaps that need to be filled in your organization?
• Set key performance indicators: Define metrics and performance tracking procedures to measure your team’s performance.

Free Operational Plan Template

Leverage everything you’ve learned today with our template. This free operational plan template for Word will help you define your budget, timeline, KPIs and more. It’s the perfect first step in organizing and improving your operations. Download it today.

What Should be Included in an Operational Plan?

Your operational plan should describe your business operations as accurately as possible so that internal teams know how the company works and how they can help achieve the larger strategic objectives. Here’s a list of some of the key elements that you’ll need to consider when writing an operational plan.

Executive Summary

An executive summary is a brief document that summarizes the content of larger documents like business plans, strategic plans or operation plans. Their main purpose is to provide a quick overview for busy stakeholders.

Operational Budget

An operational budget is an estimation of the expected operating costs and revenues for a given time period. As with other types of budget, the operational budget defines the amount of money that’s available to acquire raw materials, equipment or anything else that’s needed for business operations.

It’s important to limit your spending to stay below your operational budget, otherwise, your company could run out of resources to execute its normal activities. You can use our free operating budget template for Excel to track your operating costs.

Operational Objectives

It’s essential to align your operational objectives with your strategic objectives. For example, if one of your strategic objectives is to increase sales by 25 percent over the next three years, one possible operational objective would be to hire new sales employees. You should always grab your strategic plan objectives and turn them into one or multiple action items .

Processes & Workflows

Explain the various business processes, workflows and tasks that need to be executed to achieve your operational objectives. Make sure to explain what resources are needed, such as raw materials, equipment or human resources.

Operational Timeline

It’s important to establish a timeline for your operational plan. In most cases, your operational plan will have the same length as your strategic plan, but in some scenarios, you might create multiple operational plans for specific purposes. Not all operational plans are equal, so the length of your operational timeline will depend on the duration of your projects , workflows and processes.

Hiring Plan

Find any skills gap there might be in your team. You might need to hire a couple of individuals or even create new departments in order to execute your business processes .

Quality Assurance and Control

Most companies implement quality assurance and control procedures for a variety of reasons such as customer safety and regulatory compliance. In addition, quality assurance issues can cost your business millions, so establishing quality management protocols is a key step in operational planning.

Key Performance Indicators

It’s important to establish key performance indicators (KPIs) to measure the productivity of your business operations. You can define as many KPIs as needed for all your business processes. For example, you can define KPIs for marketing, sales, product development and other key departments in your company. This can include product launch deadlines, number of manufactured goods, number of customer service cases closed, number of 5-star reviews received, number of customers acquired, revenue increased by a certain percentage and so on.

Risks, Assumptions and Constraints

Note any potential risks, assumptions and time or resource constraints that might affect your business operations.

What Are the Benefits of Operational Planning?

Every plan has a massive effect on all team members involved, and those can be to your company’s benefit or to their detriment. If it’s to their detriment, it’s best to find out as soon as possible so you can modify your operational plan and pivot with ease.

But that’s the whole point of operational planning: you get to see the effect of your operations on the business’s bottom line in real time, or at every benchmark, so you know exactly when to pivot. And with a plan that’s as custom to each department as an operational plan, you know exactly where things go wrong and why.

How ProjectManager Can Help with Operational Planning

Creating and implementing a high-quality operational plan is the best way to ensure that your organization starts out a project on the right foot. ProjectManager has award-winning project management tools to help you craft and execute such a plan.

Gantt charts are essential to create and monitor operational plans effectively. ProjectManager helps you access your Gantt chart online so you can add benchmarks for operational performance reviews. You can also create tasks along with dependencies to make the operation a surefire success.

Whether you’re a team of IT system administrators, marketing experts, or engineers, ProjectManager includes robust planning and reporting tools. Plan in sprints, assign due dates, collaborate with team members and track everything with just the click of a button. Plus, we have numerous ready-made project reports that can be generated instantly, including status reports, variance reports, timesheet reports and more.

Related Operations Management Content

• Operational Strategy: A Quick Guide
• Operations Management: Key Functions, Roles and Skills
• Operational Efficiency: A Quick Guide
• Using Operational Excellence to Be More Productive

Operational planning isn’t done in a silo, and it doesn’t work without the full weight of the team backing it up. Ensure that your department is successful at each benchmark. ProjectManager is an award-winning pm software dedicated to helping businesses smooth out their operational plans for a better year ahead. Sign up for our free 30-day trial today.

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Operational Planning

Operational planning definition.

What does operational planning mean? Operational planning is a process that involves creating a detailed roadmap to align with a strategic plan.

The operational plan itself is a document that outlines timelines, action items, and critical milestones for executing the strategic plan. This document defines the organization’s objectives and goals and clarifies how to achieve them.

An operational planning process involves examining how a business operates and laying out who’s responsible for what and when.

Remember, every company approaches this differently, and annual operational plans are constantly updated or changed. The key to making it work? Clear and collaborative communication.

The timeframe to execute a plan typically depends on an organization’s velocity. For example, creating an annual operational plan is a fluid, changing process.

A well-conceived business operational plan keeps team members collaborating smoothly, ensures everyone knows what needs to be done and what their part is, and guides critical decisions about long-term strategy.

Critical steps of operational planning

Clearly define the goal or vision for the operational plan.

Analyze and identify essential business stakeholders, team members, budgets, and resources.

1. Clearly define the goal or vision for the operational plan.

2. Analyze and identify essential business stakeholders, team members, budgets, and resources.

3. Accurately plan for risk.

4. Consistently track performance.

5. Communicate to team members and stakeholders about progress.

6. Adapt the operational plan to broader company goals as needed.

What Is Operational Planning?

Operational planning faqs.

What is operational planning for the business? Operational planning in business entails a team or department working to carry out a strategic plan. It’s a forward-looking process that outlines departmental goals, resources, and budget to ensure team-based activities align with the strategic plan.

Effective operational business plans rely on the commitment of the entire team or department. This buy-in ensures issues are promptly reported, goals are identified, timelines are adhered to, and business collaboration is optimized.

When there’s transparent communication between the finance department and the rest of the business, operational plans become even more efficient in driving the organization toward its objectives.

Examples of operational planning:

• A manufacturing company is developing a plan to boost revenue by 30%.
• Finance collaborating with sales, marketing, operations management, and other vital areas to align strategies supporting revenue growth and achieving business goals.
• A brand planning to launch a new product involves market research, R&D, manufacturing, supply chain, logistics, distribution, sales, marketing, and customer support.

Why is Operational Planning Important?

Just as a roadmap helps you navigate a physical journey, an operational plan guides your organization on its path to success.

Everyone on the team can refer to a single source of truth to understand the organization’s direction and how their roles contribute to achieving the overall goals. An operational plan is a living document that should be reviewed and updated regularly. It should be adaptable to changing circumstances and also provide stability and direction for your organization.

What are the Benefits of Operational Planning?

As we said, think of operational planning as the roadmap that keeps your business on the right track, regardless of size.

One of the most significant advantages of operational planning is getting everyone on the same page, working together like a well-oiled machine to reach your strategic company goals.

Operational planning helps leadership define responsibilities, daily tasks, and activities in detail. It also shows how team members support overall department and organizational goals and describes outcomes to measure against daily tasks.

It also boosts team productivity. Operational planning enhances efficiency, productivity, and profits by ensuring employees in each department and across the company know their daily responsibilities and objectives.

Here are some of the benefits of having a robust operational plan:

• Improved communication: An operational plan ensures everyone understands the organization’s goals and priorities.
• Increased efficiency: An operational plan streamlines your organization’s operations and improves its efficiency.
• Reduced risk: An operational plan allows organizations to identify and mitigate risks.
• Enhanced decision-making: An operational plan can help your organization make better decisions by providing a framework for evaluating different options.
• Improved accountability: An operational plan can hold your organization accountable for its performance.

Remember, operational plans are built by humans and are susceptible to human error. But when you weigh the pros against the cons, it’s clear that all organizations benefit from an operational plan in place to support growth.

Who is Responsible for Operational Planning?

Typically, an operational plan lives in the realm of middle management — in contrast to the C-suite’s strategic plan.

Operational plans have a narrower scope and focus on routine tasks that continuously evolve. Changes to the strategic plan are typically less frequent compared to operational plans.

There are several factors to consider when determining who creates operational plans: <H3>

• Scope. An operational plan is laser-focused on the initiative itself and the team, ensuring the scope is manageable. It should include the “who, what, and when” for every activity.
• Timeline . The duration of an operational plan can vary depending on the organization’s speed and velocity. It can cover a quarter, six months, or a fiscal year.
• Stakeholders. To accurately plan the work, involve operational planning stakeholders who are close to the work. Finance, in particular, plays a vital role in aligning tactical details with strategic execution.

Strategic Planning vs Operational Planning

Strategic, tactical, and operational planning are distinct yet interconnected processes organizations use to achieve their goals. Each level of planning has a specific focus and timeframe.

Let’s look at each type of plan in detail.

What is a strategic plan?

A strategic plan describes an organization’s high-level goals, long-term vision, and mission, usually over the next three to five years.

This type of plan also details any significant projects or initiatives that must happen to meet this vision and how the organization will broadly measure the goals.

A strategic plan provides a big-picture view of the organization’s direction and broad objectives. In other words, it’s a visionary plan that doesn’t address the steps needed to achieve them.

What is an operational plan?

An operational plan (also known as an operation plan, work plan, or operations plan) is a detailed outline of what a team or department will focus on in the immediate future, typically within the upcoming year.

The operational plan answers questions about weekly goals, tasks, and responsibilities, ensuring alignment with the organization’s strategic goals and mission.

What is a tactical plan?

A tactical plan maps out the steps an organization or team must take after creating their strategic and operational plans.

It involves breaking down strategic and operational plans into smaller, more manageable goals and objectives.

Tactical plans define the steps and actions needed to achieve the desired outcomes.

Critical differences between strategic planning, operational planning, and tactical planning

• Strategic plans focus on long-term goals and the overall direction of the organization.
• Operational plans focus on short-term, day-to-day activities and implementation.
• Tactical plans bridge the gap between strategic and operational planning, ensuring that the goals outlined in the strategic plan are achievable through specific actions.

The Best Plan for Your Team

Remember, strategic, tactical, and operational planning work together to ensure organizations have a clear and actionable roadmap for achieving their goals.

Strategic planning is essential for setting the long-term direction, while operational planning is crucial for executing day-to-day activities. Tactical planning can break down goals into smaller, achievable steps.

What is the Operational Planning Process?

Remember these best practices and operational planning techniques when building an operational planning cycle.

Research and Identify Goals

The goal of an operational plan is to address foundational questions.

Start by reviewing your strategic plan. Ask yourself, “How will our actions shape our organization?”

From there, consider the following factors:

1. Resources. What is your operating budget? How does it compare to previous years?

2. Staffing. Do you have enough talent to achieve your goals? How do you want to grow your workforce over one, two, and three years?

3. Tools. What operational planning methodology will you use to carry out your plan? What are the operational planning tools you will use?

4. Team alignment. Have you effectively communicated your organization’s vision for the future to your team members?

5. Performance benchmarks. How will you measure progress?

6. Prioritize feedback. Be willing to accept feedback and adjust the operational plan as necessary.

Visualize the Operational Plan

To bring your operational plan to life, you must clearly articulate it to your team.

Project management software can offer all stakeholders a high-level view of tasks and progress. Identify which operational business planning techniques and tools will best achieve the organization’s goals.

Operational planning software can be a valuable asset throughout the process.

Assign People and Budget

In operational planning, budgeting involves assigning tasks and allocating resources to team members to achieve specific financial goals.

Each budget item should align with the strategic objectives outlined in the operational plan, with corresponding timelines and deliverables.

Tracking and Informing Progress

To ensure effective monitoring and progress reporting, establish a reporting system that aligns with the goals, targets, deliverables, resource allocation, and timetables outlined in the operational plan.

This reporting process allows stakeholders to provide regular feedback on the plan’s implementation and track advancements toward achieving the desired outcomes.

Adjust the Operational Plan as Needed

The most effective operational plans can identify areas for improvement. The team can then strategically adjust the plan, involve additional members, and proceed toward the next benchmark with a refined approach.

What Should Operational Planning Include?

No two operational plans are alike. What is consistent across plans is that the primary goal is to create a functional operational plan that aligns with the organization’s mission and strategic plan.

A clearly defined operational plan ensures that every manager and employee understands their specific responsibilities and the methods and timing of their execution.

Here are key elements of an operational plan:

• A title page. This summarizes the operational plan.
• An executive summary. This provides a few sentences with a rough idea of the overall plan and its primary sections.
• Mission statement. A clear and concise statement of your organization’s purpose and values.
• Vision statement. A description of what your organization will achieve. This will come from your strategic plan.
• Goals and KPIs. Specific, measurable, achievable, relevant, and time-bound objectives your organization wants to achieve.
• Timeline. A schedule of when your organization plans to achieve its goals and objectives.
• Financial summary. A detailed plan of how your organization will allocate its financial resources.
• Hiring plan. Determine how many monthly/quarterly team members to hire across different departments.
• Strategies. The methods your organization will use to achieve its goals.
• Tactics. The specific actions your organization will take to implement its strategies.
• Key assumptions and risks. Provide a risk analysis to mitigate issues before they arise.
• Metrics. The measures your organization will use to track its progress and evaluate its success.
• Next steps. Suggest next steps, if any.

What are the Steps to Build an Operational Plan?

Operational planning aims to create a practical plan that supports existing strategic goals, not to generate new ones.

Like project planning, operational planning is never a one-and-done task but a continuous process.

Here are the steps you need to get started:

1. Start with a strategic plan

Before diving into operational details, establish the long-term vision and goals through a strategic plan.

The leadership team should create and monitor the strategic plan, making necessary adjustments.

2. Sharpen the scope

Narrow down the operational plan’s scope to a specific department, team, or focus area.

Start big with the strategic plan, then narrow down to the operational plan. From there, focus on the tactical areas you need to see your plan through — in other words, a supporting action plan.

3. Identify key stakeholders

Before executing the operational plan, it’s crucial to recognize the key stakeholders involved in the operational planning process.

These team members play a vital role in leading and informing others. Identifying these team members in advance ensures effective communication and successful execution of the operational plan.

4. Create the operational plan

Your operational plan outlines the timeframe for achieving specific goals and presents the team’s actions. It must include objectives, deliverables, quality standards (if any), desired outcomes, operating budget, staffing and resource requirements, and progress and monitoring information.

5. Share the operational plan

Share the operational plan with key stakeholders so they understand mission-critical goals and the daily tasks that support them.

Track progress in real-time for best results. This also allows you to update the operational plan and report on progress to team members and stakeholders as needed.

Does Planful Help With Operational Planning?

Absolutely! Planful’s Financial Performance Management platform seamlessly integrates the demand for structured planning in finance with the business’s need for dynamic planning.

With Planful, you can create collaborative financial plans that align resources with strategic goals. Planful also automates the data collection process for operational planning, saving you from a time-consuming, manual process.

The platform’s agility enables you to adapt and pivot quickly in response to changing business conditions. You can reliably model numerous scenarios and effortlessly convert annual plans into quarterly or monthly rolling forecasts, all tailored to the organization’s current requirements.

Learn more about Planful’s Operational Planning solution .

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Operational planning: 5 steps to create a better business operational plan

Learn how to conduct operational planning to enhance collaboration, streamline workflows, and unlock peak productivity in all your company’s teams.

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Operational planning enhances collaboration and streamlines workflows to unlock peak efficiency.

Transforming a strategic vision into business success demands meticulous planning. It requires navigating unexpected obstacles, coordinating team activities with long-term goals, and implementing practical steps to realize organizational objectives.

Organizational planning plays a pivotal role in this context by translating high-level strategies into actionable day-to-day tasks.

But an operational plan is more than a structured to-do list — it’s a comprehensive framework that outlines roles, responsibilities, and timelines. By breaking down grand strategies into executable actions, operational planning ensures cohesive teamwork and transforms ambiguous business strategies into achievable realities.

What’s operational planning?

Operational planning is how companies organize day-to-day tasks to align with broader strategic goals. It’s a road map guiding teams through operational decisions about daily operations, ensuring every task contributes to the company’s long-term and high-level objectives. This typically involves setting short-term objectives, defining key activities, and establishing clear timelines.

In practice, operational planning often blends traditional and innovative methods to maximize efficiency. Conventional strategies like Gantt charts and flowcharts help leaders visualize data , tasks, and timelines to make complex projects more manageable. And digital tools like enterprise project management software introduce automation, real-time collaboration, and data analytics into the mix. These platforms enable agile plan adjustments and offer insights through predictive analytics.

By integrating these mixed methodologies, operational planning helps enterprises build a system that’s efficient and responsive to evolving business needs. It bridges the gap between meticulous organization and the agility needed in a fast-paced business environment.

Benefits of operational planning

Operational planning offers a structured approach to decision-making, but its advantages extend beyond planning. Here’s why it’s a crucial tool for achieving organizational goals.

Clarifies goals

Operational planning turns abstract ideas into concrete objectives. It encourages setting explicit goals with definitive timelines. This clarity benefits leadership and the entire team, ensuring everyone understands what needs doing, who’s doing it, and by when.

Enhances productivity

An operational plan enhances productivity by establishing timelines, outlining objectives, and allocating resources. This structure helps team members prioritize their work and manage their time efficiently because they have clear deadlines to guide them.

By defining precise objectives, the plan ensures every team member understands their specific tasks and expected outcomes, preventing unnecessary work and deviations from the plan. And knowing what resources are available helps team members prepare realistically for their taskwork.

Improves efficiency

A well-crafted operational plan boosts efficiency by optimizing workflows and streamlining organizational processes . By mapping out immediate and long-term objectives, the plan establishes a clear blueprint for task execution. As team members better understand their roles, task sequence, and the rationale behind each, they can execute them more seamlessly. This clarity and structure are also invaluable for onboarding new team members and allow them to integrate and understand the workflow with less friction.

Strategic planning vs. operational planning

Both plan types are distinct yet essential components of an organization’s overall planning process. Let’s break down the primary differences:

• A strategic plan defines your company’s “what,” outlines your business’s direction, and sets broad, long-term objectives. It’s a high-level overview that articulates your mission statement, establishes key business objectives, and outlines strategies for achieving them. This plan typically spans several years into the future and aligns the company’s efforts with its overarching vision.
• An operational plan focuses on the “how” by detailing how to execute the strategies and goals laid out in the strategic plan. This is where you get into the specifics — setting milestones, crafting a detailed road map, and establishing short-term, incremental goals that steer your company toward achieving strategic objectives. And at this point, you’ll focus on more immediate factors, like dealing with daily management and task implementation, that are necessary to achieve strategic organizational goals.

Types of operational plans

Departmental goals and needs vary significantly, and tailored operational plans ensure you optimally manage each area. While a sales department might need a plan focused on customer engagement and retention, an IT department might emphasize technology upgrades and cybersecurity . Combining various plan types — like a couple of those that follow — ensures optimal management and effectiveness in each area, aligning departmental activities with broader objectives.

Project operation plans

Project operation plans are indispensable documents for breaking projects into actionable milestones and assigning teams to relevant tasks. A well-developed project plan organizes tasks and anticipates resource requirements such as personnel, infrastructure, and time. By identifying these requirements early on, project operation plans provide planning foresight that helps avoid resource shortages and last-minute scrambles to ensure projects progress smoothly and stay on track.

Say you’re designing a website . Your project operation plan will outline key steps, such as user research , wireframing , user testing , and launch. Each step would have assigned teams, deadlines, and specific objectives, like establishing focus groups by a certain date and finalizing prototypes. The project manager would monitor progress to ensure resource availability and timeline adherence.

Enterprise operation plans

Enterprise operation plans translate broader strategic goals into smaller, manageable milestones. They involve assigning responsibility for these milestones to department directors to ensure accountability for each plan segment.

When creating an enterprise operational plan, it’s vital to identify resource gaps, dependencies, and other potential obstacles to ensure seamless execution. This lets you set realistic, achievable milestones and achieve smooth interdepartmental coordination. Involving directors from the start is also crucial because their insights can reveal critical aspects you might otherwise overlook.

Consider a web design agency planning to expand their service offerings to include mobile app development over the next year. The enterprise operational plan might include milestones such as hiring app developers, training current staff in responsive mobile design , and marketing these new services to potential leads. You might also ask the development head to oversee recruitment and training and involve the marketing director in developing strategies to promote the new services.

IT operation plans

IT departments confront unique challenges due to rapid cybersecurity threats and their critical role in every business sector. Unlike other departments focusing on sales and marketing, IT departments must ensure the organization’s technological structure is robust, secure, and current.

IT operation plans typically outline how the department will adapt to business changes, like scaling up for new hires, migrating from a legacy system to a new one, and safeguarding the organization against evolving cybersecurity threats.

If you’re preparing for a major server infrastructure upgrade, for instance, an IT operation plan will outline steps like evaluating current server and hosting capacities, selecting new hardware and infrastructure, and scheduling website migration to new servers. The plan would include specific timelines — such as completing server evaluations by the end of the first quarter and starting the migration in the second quarter — to ensure minimal downtime and a smooth transition for all hosted websites.

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Key elements of an operational plan

No matter the type you’re creating, most operational plans include the following core traits.

Operational plans should be clear and to the point. While comprehensive coverage is important, elaborating too much risks misinterpretation and becoming bogged down in the details. Focus on concise, direct explanations and allow the details to unfold during project execution.

Team buy-in is essential for success. Instead of leaving the executive team to dictate the plan exclusively, involve team members in its creation. A collaborative approach helps garner buy-in and fosters feelings of ownership and responsibility toward the plan’s objectives. This involvement translates to increased motivation and commitment because team members feel more likely to invest effort in a plan they helped shape.

Consistency

Consistency in operational plans is crucial for their effectiveness and for establishing organizational trust. It involves applying the same standards and procedures uniformly across all departments and teams. By consistently applying rules and policies, you ensure every organizational element operates under the same guidelines, enhancing fairness and reducing confusion. Consistent execution of your operational plan also streamlines progress and success tracking because the criteria and methods used for each remain uniform.

Specify the processes and methodologies each department should use. If the design team uses an agile, iterative process , for instance, implement similar practices in other departments like IT. This standardization enables smoother collaboration and operational harmony.

Key performance indicators

Every operational plan needs well-defined key performance indicators (KPIs) from the outset. These should include:

• Leading indicators provide early insights into your strategy’s effectiveness by signaling shifts and trends ahead of their full realization. By monitoring these indicators, you can gauge your strategy’s immediate impact and proactively adjust your approach. Indicator examples include customer satisfaction levels, changes in market share, and fluctuations in sales figures.
• Lagging indicators reflect the outcomes of your operational efforts by providing historical data on your plan’s efficacy after execution. Key lagging indicators include metrics like the time taken to complete projects, support ticket volumes, and total expenses incurred. Analyzing these metrics also helps identify improvement areas, like optimizing resource allocation, enhancing customer support processes, and streamlining operational workflows.

Constraints

Acknowledge any assumptions and constraints within your plan, such as technological limitations, tight deadlines, and regulatory requirements. Being upfront about these factors is essential for setting realistic expectations and guiding effective task execution. And it ensures everyone involved understands the framework they’re operating in.

Say you’re building an agency website in the European Union (EU). A critical constraint would be compliance with data protection regulations like the General Data Protection Regulation (GDPR). You must keep this constraint in mind as you develop your operational plan because it affects the technology and processes used for data handling and shapes your website’s design and functionality. For instance, you’ll likely need to integrate clear consent mechanisms for data collection, prominent user data management tools into the website’s layout, and GDPR-compliant technologies for data processing and storage.

The 5 steps of the operational planning process

Enterprises develop operational plans through five strategic steps, each essential for shaping an actionable and effective strategy. Let’s explore what this planning process looks like.

1. Set goals

Establish specific, immediate business goals that align with your strategic plan. This might include launching a redesigned website, increasing online sales by a specific percentage, or reducing digital marketing expenses.

Make these goals ambitious yet adaptable, allowing for flexible responses to unexpected challenges. This step lays the foundation for your operational strategy and aligns every subsequent action toward these well-defined objectives.

2. Allocate resources

After establishing your goals, evaluate your capacity to achieve them. Analyze your current resources and identify what additional expertise, technology, and budget you require. This step isn’t just about highlighting what’s missing — it’s about strategizing how to scale your business to accommodate these needs.

3. Define KPIs

Select KPIs that align closely with your operational goals and ensure they reflect key aspects of your strategy. These KPIs should include leading indicators, like website traffic and user engagement rates for predictive analytics, and lagging indicators, such as satisfaction scores post-launch, to evaluate past performance. Consistently apply these KPIs throughout your project to monitor progress and keep the team focused on core objectives.

Consider using digital analytic platforms like Google Analytics to track KPIs. These tools offer detailed insights into traffic and user behavior. And you can set up dashboards to visually represent these metrics to help spot trends and patterns without combing through data.

Suppose you notice rising bounce rates on a specific webpage — this might indicate user disinterest or navigational issues. In response, you might pivot to revise the page’s copy, restructure its visual hierarchy , or simplify the navigation structure to make it more engaging and user-friendly.

4. Prescribe processes

Develop clear and detailed plans for how your teams should execute tasks. This clarity guides them through each stage, reducing confusion, ensuring consistency, and enhancing productivity.

To communicate these procedures to your team, use tools like flowcharts. They simplify and clarify each operational plan phase and help ensure everyone understands their responsibilities.

For large-scale projects, consider using project management software like Asana, Trello, or Jira. These platforms offer features like task assignment, deadline tracking, and real-time communication, and they provide a centralized platform for monitoring progress and maintaining team alignment.

5. Determine milestones

Create a road map that outlines clear, measurable goals and specific objectives. This map transforms your operational plan into achievable targets, helping teams visualize where they’re headed and the benchmarks they need to hit. Host regular meetings when outlining your milestones — this consistent evaluation ensures everyone moves forward in sync, maintaining the necessary momentum to achieve the plan’s goals.

In a web development project, for example, these evaluations might reveal if certain phases, like design or development, have too few or surplus resources. Identifying these imbalances lets you efficiently reallocate resources to ensure each department has what it needs to meet its milestones effectively and on schedule.

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Operational Plan: Everything You Need To Know (2024 Guide)

The old way of planning no longer works in complex and unpredictable business environments, and companies are struggling to find their feet on shaky ground. As we’ve seen with many of our customers and strategies in Cascade, organizations can no longer count on executing three or even five-year strategic plans.

The new reality forces companies and their operations teams to adapt their operational plans more frequently and within shorter time frames if they want to reap benefits faster than their competitors. Organizations need to work on their strategic instinct and fast adaptability to enhance their operational efficiency .  

And that requires big changes—including building a flexible operational plan, supported by the right tools and systems that help you achieve real-time centralized observability and empower a strategic response to external disruptions.

Read this article to build a bulletproof operational plan that includes all the key elements necessary to overcome unpredictable business chaos. You’ll also get free templates that will help you rapidly adapt and align your teams.

✨Bonus: We’ve included pro tips from business leaders in our network to help you identify gaps in your strategy execution and build resilient business operations.

What Is An Operational Plan?

An operational plan is action and detail-oriented; it needs to focus on short-term strategy execution and outline an organization's day-to-day operations. If your operations strategy is a promise, your operational plan is the action plan for how you will deliver on it every day, week, and month.

Put simply, an operational plan helps you bridge the gap between business strategy and on-the-ground execution and ensures that the organization is on track to achieve its long-term goals.

Benefits of operational planning

• Clear definition of relationships between cross-functional teams in different departments and responsibilities for each to eliminate duplicated efforts.
• Tighter alignment between corporate or business unit strategic plans and on-the-ground execution, helping the organization meet its business targets.
• Strong operating system that enables the company to quickly adapt, deliver operations goals, and monitor performance.

Operational planning vs. strategic planning

Operational planning deals with the day-to-day details and short-term goals, while strategic planning focuses on the big picture and long-term direction of an organization.

To put it in simpler terms, operational planning is about the "how" of daily tasks, while strategic planning defines the "what" and "why" for future success.

📚Recommended reading: Strategic vs. Operational Planning

Kickstart Your Operational Planning Process: Lay The Foundation

The quality of your operational plan will depend on your input. A successful operational planning initiative will consider these aspects:

• Who will be involved? Identify and include employees, customers, and the management team in the planning process to gain valuable insights from the front lines, ensuring better strategy and execution buy-in.
• What are your internal capabilities? Assess internal capabilities by conducting an internal analysis , including resource requirements, operating budget, and talent skills. Talent management and employee engagement are just a few of the many challenges that COOs will have on their operations agenda.
• What environment are you operating in? Conduct an external analysis (e.g., PESTLE or Porter’s 5 Forces ) to inform your approach and identify optimization opportunities and risks, keeping you agile in a changing market.
• Is it aligned with your organization’s strategy? Ensure alignment of your operational plan with your organization’s strategic plan to actively support the company's long-term vision and contribute to key business metrics.

👉🏻 Once you’ve gathered this information, you can develop an operational plan to help you execute business strategies.

Key Elements Of Your Operational Plan

Enough chit-chat; it’s time to put your operational plan together. We've built this based on our proven and tested approach, used by over +45,000 Cascade users.

See how Cascade Strategy Execution Platform enhances operational efficiency by reducing duplication and aligning teams toward common goals. It effectively eliminates waste resulting from misalignment, fostering smoother operations and improved performance.

Here’s a recap of the five key elements your plan must consider:

Choose key metrics aligned with the company goals

Selecting your operational plan's key metrics isn't a mere exercise in tracking numbers; it's about laser-focused alignment with your business needs and objectives. These metrics are the tangible indicators of your organization's efficiency and performance. They serve as the compass, guiding your daily decisions and actions toward achieving concrete results.

By precisely aligning these metrics with your company's core objectives, you ensure that every initiative and action within your operational plan directly contributes to achieving tangible results.

An aligned operational plan makes it easier to:

• Communicate roles and responsibilities to all employees so they know how their efforts contribute to overall business success.
• Identify and address operational bottlenecks and inefficiencies that could derail strategy execution.
• Motivate and engage employees to work toward strategic objectives and deliver on business outcomes.

Remember that the role of operations is to close the gap between your organization's strategic goals and what is being done on a daily basis to make them happen.

👉🏻 How Cascade can help:

With Cascade’s Metrics Library , you can bring your operating and financial business-level goals together with your strategy under one single roof. This makes reporting & governance easy, accurate, and less time-consuming by connecting your business data to your key business initiatives.

Through Cascade’s integrations , you can consolidate your metrics in one place, importing your data directly from business systems, data lakes, BI tools, or even spreadsheets.

Define the focus areas of your operational plan

The focus areas of your operational plan are the key areas of the business that the plan will address.

This will depend on your business plan. Think about how the business operates and how it succeeds. Do you need to pursue short-term cost reductions while simultaneously pursuing longer-term growth and transformation initiatives? Your operational plans must be built on these strategic priorities.

For example, you can prioritize your focus areas based on the most relevant business strategies or by specific departments. Some examples of focus areas could be:

• Administration
• Human Resources

💡Tips to help define the focus areas of your operational plan:

• Identify the business's key challenges and opportunities.
• Consider the business's overall long-term strategy and key metrics and how the operational plan's focus areas can support these objectives.
• Bring other people on board to help you identify what needs to be addressed by the operations plan.

Create strategic objectives for your operational plan

Strategic objectives are specific goals aligned with the operation’s strategy and focus areas. They represent what you want to achieve in each focus area and will serve as the building blocks of your plan, ensuring that it’s focused and actionable.

Some examples of strategic objectives:

• Reduce costs by 10% within the next year by implementing more efficient processes and streamlining the supply chain over the next year.
• Launch three new products in the next fiscal year to expand your product lines and increase revenue.
• Increase customer satisfaction scores by 5% within the next six months.

💡Tips for defining strategic objectives include:

• Ensure your objectives are specific, measurable, achievable, relevant, and time-bound (SMART).
• Consistently align objectives with your operational plan's focus areas and the company's goals.
• Don’t be afraid to get input from other people about your objectives.

Identify and prioritize projects

It’s time to identify and prioritize the projects that need to be executed. Remember, projects are action plans to help you achieve your strategic objectives.

Project planning should include thinking about time frames, task assignments, and deliverables (and prioritizing).

Here are some examples of project ideas:

• Localize sourcing for critical semi-finished materials.
• Streamline the supply chain to reduce costs and improve efficiency.
• Find and develop an alternative logistics channel.
• Implement a new customer service training program to improve customer satisfaction scores.
• Implement a new technology that will enable end-to-end supply chain visibility.

💡Tips for defining and prioritizing projects:

• Identify the specific actions and activities needed to achieve each strategic objective.
• Prioritize the projects based on their importance, feasibility, and potential impact on the business.
• Involve stakeholders in defining and prioritizing the projects to ensure their needs and concerns are heard.

Identify and track key performance indicators (KPIs)

Finally, you’ll need to know if your operational plan and day-to-day activities result in outcomes.

Set KPIs for key initiatives and strategic objectives to measure success, ensure alignment, and identify performance gaps in your operational plan.

Some examples of operations KPIs are:

• Inventory costs
• Costs of goods sold
• Revenue growth
• Employee retention rate
• Customer satisfaction score

💡Tips for defining and tracking KPIs:

• Align KPIs with your strategic objectives and focus areas so that you can track the plan's progress against these specific goals.
• Add both lagging and leading indicators .
• Instead of using multiple disconnected spreadsheets and project management tools, consider live dashboards or reporting systems to track the KPIs and monitor progress over time.

👉🏻 How Cascade can help build your plan:

Cascade’s planner feature enables you to build your operational plan with structure and ease by breaking down the complexity from high-level initiatives to executable outcomes. Define your key elements (focus areas, objectives, projects, and KPIs), and share the plan with your teams. You’ll get full visibility of the plan’s progress in real-time, allowing you to identify gaps, quickly update the plan, and communicate the change with your team with a single click.

👉🏻 If you don’t want to start building the plan from scratch, use our free Operational Plan Template pre-filled with examples of focus areas, objectives, projects, and KPIs that you can customize to meet your organization’s needs.

Operational Plan Examples & Templates

Here are five operational plan examples to help you create plans for your teams. You can use one master operational plan or set up an operational plan for each department.

Master Operational Plan Example

This Operational Plan Template will help you close the gap between business goals and day-to-day operations. You'll be able to set goals and KPIs for your top priorities and work with the operations team to deliver operational excellence and business results.

HR Plan Example

This HR Operational Plan Template can be used to meet staffing requirements, manage human capital and align human resources activities with your strategy. HR managers in any industry can create a clear operational plan that can be constantly monitored, adapted, and improved.

IT Plan Example

If you’re in the IT team, try out this IT Plan Template to get your IT operational planning up and running fast. It comes prefilled with focus areas and KPIs relevant to IT operations; you can easily customize workflows and deliverables to your needs.

Marketing Plan Example

This Marketing Plan Template can help you efficiently understand and plan your digital marketing operations using best practices. Use it to quickly set up priorities and get your social media and marketing teams moving on tasks that will make an impact.

Finance Plan Example

This finance-focused template is ideal if you want to get on top of your finance operations plan. Use it to allocate and distribute financial resources across your organization and get real-time updates through your dashboard and reports—which are great tools to create a visually compelling financial summary that clearly shows your key metrics.

💡Pro Tip: To ensure successful execution, it's crucial to align not just your master operational plan with your overarching strategic plan, but also all the operational department plans.

With the Alignment Maps feature, you’ll be able to visualize how your top-level business strategy breaks down into functional and operational plans. This empowers COOs and CFOs to consolidate their operational plans in one place, creating tighter alignment between the finance and operations teams and improving cross-collaboration to build more resilient operations.

Want to dig deeper? Use the Relationships feature to see the relationships between connected objectives from your plans and understand how your different department goals contribute to the core business metrics and goals. This view will allow you to clearly map dependencies, blockers, and risks that may lie along your journey.

5 Tips For An Effective Operational Plan And Its Execution

1. don’t underestimate the power of transparent communication.

Regularly communicate the operational plan and progress to all relevant stakeholders to build the necessary buy-in and support. Your employees must know your goals and the roadmap, and team members should understand their role in its execution. This business transparency will help everyone row in the same direction.

“Clarity regarding strategy is one of the key drivers of autonomous execution. If people understand what you’re working toward and have guardrails in place, they can be empowered to make their own decisions and don’t need everything to be ‘run up the chain’ to get approved. This allows you to move fast and at scale.” — Sam Sterling , Chief Strategy Officer, Akqa

2. Keep moving forward and adopt a growth mindset

Keep the momentum going and ensure that the plan is executed effectively. Regular monitoring and reviews can help identify and address any challenges or obstacles that may arise.

Schedule regular reviews and check-ins and provide the necessary support to ensure projects are on track and moving forward.

“I think adopting a growth mindset is super important. This means having the confidence to fail fast, try something new and empower people to do that.” — Ken Miller , General Manager, Azure Intelligent Cloud at Microsoft

With the Team Updates functionality, every team member can post updates on key measures, actions, and objectives. This will give you real-time visibility into performance and help you identify possible risks before it’s too late—without having to schedule extra meetings or nag your team members for updates.

3. Make strategic moves and change fast when you need to

Your operational plan should be flexible, adaptable, and open to adjustments. This means keeping an eye on progress, making corrections if needed, and being willing to adapt the plan to changing circumstances or new opportunities. As McKinsey suggests, you can consider creating a team that will be able to collect data, link analysis with action, and offer quick responses to rapid changes.

“Traditionally, companies would have taken that piece of paper and gone out and said: we're going to execute it, start to finish. Then get into the formulation of the strategy, what we need to hit, and what the end product result will be like. But what we do know is that’s never the case. Along the way, you're going to have bumps, and inevitably, you’ll need to change from that original picture.” — Annie Lucchitti , Marketing Manager, Unilever

4. Empower your operations team and boost efficiency

Effective operational planning requires the engagement and empowerment of your team. Involve stakeholders in the planning process and provide them with the necessary resources. Give them context and an opportunity to set goals and prioritize initiatives. This will help you boost engagement and hold them accountable for progress.

“I think it just works at every single level. Are people allowed to be themselves at work? Personally, are they at peace? Are they happy? Productivity happens when people have the right skills, but also when they are engaged and happy. If one of those fails a bit, productivity will start decreasing.” — Joan Torrents , Global Sourcing Manager, TESCO.

5. If it isn’t measured, it isn’t managed

Don’t underestimate the importance of tracking and measuring progress against the operational plan's goals and objectives. Set milestones, enforce KPIs, and stay on top of progress. Doing this will help you stay on course, empower you to act quickly, and provide valuable insights into what is going wrong.

“Data is a foundational element in the strategy definition phase as well as in the strategy execution phase as it helps create a baseline, identify key priorities, set goals, and measure progress.” — Erica Santoni , Principal, Diversity Equity & Inclusion, Intuit

Use Cascade’s Dashboards to monitor your day-to-day progress on key metrics and critical business and strategic information in real-time.

Compile the information in powerful reports and executive summaries in seconds with pre-built templates. Share them with your key stakeholders —internal and external— and invite them to collaborate on your strategy together.

Execute Your Operational Plan With Cascade 🚀

What good is an operational plan if no one executes it? If your organization wants to operate at a higher level, static tools like Excel spreadsheets, PowerPoints, Google Docs, and/or project management tools aren’t the solution.

❌They aren’t designed for adaptive strategy and planning.

❌They often lead to siloing and hinder effective cross-collaboration.

❌They make it challenging to measure progress and slow down decision-making.

With Cascade as your central operating system, you can stop running business operations blindfolded and embrace rapid, coordinated, and data-driven decision-making.

Get your Operational Plan Template to get started with a dynamic plan that will lead to actual outcomes for your business and see faster results from your strategy.

Or take Cascade for a spin! Start today for free or book a 1:1 product tour with Cascade’s in-house strategy expert.

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Operational Planning: a Practical Guide for Businesses

Learn about operational planning, its best practices and how to execute it flawlessly in your business.

Every business owner dreams of success. But without a clear roadmap, even the hardest workers can get lost in the shuffle of daily tasks, losing sight of their grand ambitions.

Operational planning is that roadmap, breaking down lofty goals into actionable steps. It’s not just about working hard — it’s about working smart.

Dive into this guide as we dissect operational planning and show how it can propel your business toward its next significant milestone.

What is operational planning?

Operational planning is about making detailed plans for achieving short-term goals, usually within a year. It turns big strategies into specific tasks and steps that teams can follow.

For example, a store might have an operational plan for the holiday season that includes sales targets and staffing schedules.

This kind of planning helps everyone know what they need to do and ensures that resources are used effectively.

It’s like creating a detailed map for a journey, making sure the ship stays on course and reaches its destination smoothly.

Operational planning is essential because it directly helps an organization reach its bigger goals, even though it might seem like a small part of the process.

What’s the difference between an operational plan and a strategic plan?

An operational plan is a short-term, detailed guide for day-to-day work, aiming to reach goals within a year. It's like a specific recipe you follow to cook a meal.

On the other hand, a strategic plan sets long-term company goals for the next three to five years, giving the big picture of what you want to achieve, similar to planning a menu for a week.

The operational plan shows the steps ( how and when ), while the strategic plan shows the overall goals ( what and why ).

Understanding the difference between operational and strategic planning helps you (and your team) use time and resources wisely , keeps everyone on the same page, and ensures that every small task inches you closer to your bigger goals.

Why operational planning is so important for your business

Enhances team productivity.

Operational planning helps everyone know what to do, stay excited about their work, and focus on important tasks, making the whole team work better.

Operational planning helps achieve this by:

• Establishing clear roles: Everyone knows exactly what their job is, what their key performance indicators are, and what results they’re expected to deliver
• Motivating through clarity: Having clear goals helps everyone feel more ready and eager to work.
• Identifying levers: Everyone works on what’s most important — the “levers” that make big impacts — rather than “ putting their time in” on bootless tasks.

This way, operational planning guides every team member in contributing effectively, enhancing overall productivity .

Provides clarity and direction

A good operational plan shows the best way to use time and money and lays a clear path for the team.

It does this through:

• Smart use of resources: A solid operational plan makes sure that time and money are spent on the most important things.
• Knowing what’s important: Prioritization helps teams focus on the big tasks first.
• Removing the guesswork: Make sure everyone knows the plan and follows it.

These elements work together to guide the team towards achieving their goals efficiently.

‎Secures alignment with strategic objectives and goals

Operational planning connects everyday tasks to the company’s big organizational goals, helps check progress, and keeps everyone working together towards the same aim.

It accomplishes this by:

• Connecting daily activities to big ideas: 41% of US workers aren’t sure what their organizational purpose is. So, establishing this connection shows how every task helps achieve the main goals.
• Regular check-ins: These let the team check if they’re on the right path and make changes if needed.
• One shared goal: A unified front keeps everyone working towards the company’s primary aim.

This alignment keeps everyone moving in the same direction, ensuring all the work contributes to the business’s success.

Boosts business flexibility

A strong operational plan prepares your business for sudden changes, helps plan for possible challenges, and lets leaders make quick decisions.

Operational planning shapes this adaptability through the following:

• Preparing for surprises: “Expecting the unexpected” helps the business adjust quickly when these unexpected things happen.
• Nurturing a problem-solving mindset: By thinking about what problems threaten the business, teams nurture problem-solving skills , leading to better decision-making.
• Quick decisions: Operational planning helps leaders make fast and informed choices. Being flexible like this is key to staying strong and ready for anything in business.

Each of these elements helps your business survive in the face of uncertainty and become more resilient to unexpected threats.

Streamlines decision-making

Operational planning makes decision-making easier by using facts, clear steps, and setting priorities to guide choices.

Operational planning supports this by:

• Helping you make choices based on facts: Operational planning ensures that decisions are based on real information, not just feelings.
• Establishing clear procedures: A clear plan defines steps for various processes so that you’re not shooting from the hip, hoping you’ll do things right.
• Fewer arguments: With clear priorities, there's less disagreement on what to do next, saving time, money, and the sanity of everyone on the team.

The bottom line is that by streamlining decision-making in this way, operational planning helps the business navigate challenges and seize opportunities effectively.

Challenges of operational planning

Operational planning is essential for a business’s success, but it’s not without challenges. Let’s break these down to understand them better.

Balancing today's work with tomorrow's goals

It’s tough to manage daily tasks while also thinking about the future. Imagine a juggler trying to keep several balls in the air at once. If they focus too much on one ball, the others might drop.

In business, concentrating only on today's work can cause us to lose sight of our long-term goals.

And deciding whether to spend our time and money now or save it for later can be tricky. It’s like being at a crossroads and needing to choose the right path that leads to growth and success.

Gathering reliable information

Today, we have more information at our fingertips than ever before. But this can be overwhelming. It’s like trying to drink water from a fire hose – too much too fast.

It's challenging to know what information is important and what isn't. For example, a business might have a lot of customer feedback, but figuring out which comments will help improve the product can be hard.

And because the business world moves so quickly, using old information can lead to mistakes. It’s like trying to hit a moving target using an outdated map.

Keeping your team aligned

Making sure everyone on a team understands and follows the plan can be like herding cats. Even with clear instructions, people might need clarification. And some might not want to change the way they work, even if it’s for the better.

It’s essential to keep everyone on the same page and moving in the same direction. Think of it as a boat crew rowing together; if everyone is in sync, the boat moves smoothly. But if not, it can be a bumpy ride.

The bottom line is that operational planning is key to a business’s growth, but it has its hurdles.

Balancing daily work with future plans, finding the correct information, and aligning the team are all “mission critical.”

Tackling these challenges head-on can lead to a smoother journey and a brighter future for the business.

How to create an operational plan

Creating your operational plan requires a systematic approach so that you cover all the bases to set your business on a path to achieve its goals.

Here’s a step-by-step guide to help you through the process.

Step 1: Review your big picture

Start by taking a step back and looking at the overarching goals of your business. What are the main objectives you want to achieve in the next year or even five years? These could range from increasing revenue and expanding market share to improving customer satisfaction.

Step 2: Identify current strengths and weaknesses

Once you have a clear understanding of your long-term goals, it’s time to assess your current situation. Conducting a SWOT analysis can be a helpful tool here. This involves identifying your business’s strengths, weaknesses, opportunities, and threats. It’s about understanding what you’re doing well, where you could improve, and what external factors might impact your business.

Step 3: Set clear, actionable objectives

With your SWOT analysis in hand, you can now set specific short-term targets that will help you achieve your long-term goals. Make sure these targets are SMART – Specific, Measurable, Achievable, Relevant, and Time-bound. For example, instead of setting a vague goal like "increase sales," a SMART goa l would be "increase sales by 10% in the next quarter."

‎Step 4: Determine resources needed

Next, list out all the resources you will need to achieve your objectives. This could include money, staff, equipment, and more. Also, plan how you will secure these resources. It might involve hiring new staff, purchasing equipment, or reallocating existing resources.

Step 5: Assign roles and tasks

Clearly define who in your team is responsible for what. Make sure every member knows their specific duties and the deadlines associated with them. This helps in ensuring accountability and that everyone is on the same page.

Step 6: Monitor progress regularly

Set up regular check-ins, whether weekly, monthly, or quarterly, to track the progress of your operational plan. Use these sessions to identify issues, address problems, and make necessary adjustments to stay on track.

Step 7: Be ready to adjust the plan

Finally, understand that no plan is perfect from the get-go. Be flexible and open to making changes based on the feedback you receive and the results you observe. The business environment is always changing, and your operational plan should be adaptable enough to change with it.

By following these steps, you create a solid foundation for your business to achieve its strategic initiatives , ensuring you are prepared for the journey ahead.

Examples of operational plans

Next, we'll go through practical examples to show you how operational plans work in real-life situations.

You'll see the steps involved and understand how these plans help businesses achieve their goals.

By looking at these examples, you'll get a clearer idea of how to apply operational planning to different scenarios.

Example 1: A gym aiming to boost membership rates

Suppose we have a local gym aiming to boost membership by introducing new fitness classes.

• Goal: Increase gym memberships by 15% by launching three new fitness classes within the next six months.
• Strength: Loyal member base and knowledge of their fitness preferences.
• Weakness: Limited space in the gym and lack of instructors for specialized classes.
• Objective: Research popular fitness trends, hire or train instructors, and set up class schedules in 5 months. Dedicate one month for promotion to attract new members.

Step 4: Determine resources needed

• Need: Equipment for the new classes, trained instructors, and promotional materials to entice new sign-ups.
• Manager to research and decide on the new classes.
• HR to recruit or train instructors.
• Marketing team (or person) to create a campaign that highlights the new classes and appeals to potential members.
• Bi-weekly meetings to check on class setup progress and track membership sign-up rates.
• If the classes aren't drawing in the expected number of new members, consider offering promotions, adjusting class times, or exploring different class types.

Example 2: A local bookstore aiming to increase sales

Suppose there’s a local bookstore that wants to increase book sales by hosting monthly themed events.

• Goal: Boost monthly sales by 20% by hosting themed events over the next six months.
• Strength: Well-curated book selection and a cozy venue that's popular for gatherings.
• Weakness : Limited marketing experience and budget constraints for organizing larger events.
• Objective: Identify and organize one themed event per month that resonates with the community, driving both event attendance and book sales.
• Need: Event materials, possible guest speakers or performers, promotional flyers, and online ads.
• Store owner to select monthly themes and potential books to highlight.
• Staff members to handle event logistics like setting up, decorating, and coordinating with guest speakers.
• A dedicated person (or outsourced help) to manage promotion, both in-store and online.
• Post-event reviews to measure attendance, book sales during the event, and gather attendee feedback for future improvements.
• If an event theme doesn't mesh with customers or fails to boost sales as expected, brainstorm new themes, adjust marketing strategies, or consider partnerships with local businesses for joint events.

How Motion helps your operational planning

Efficient operational planning is key in the fast-paced business world, and Motion is here to streamline that process.

AI-powered scheduling adapts to changes, keeping your business on track

Motion’s AI-powered scheduling plans your day, ensuring nothing is missed by rescheduling uncompleted tasks. This feature helps you focus on priority tasks adapting to real-time changes.

Project oversight keeps the team together and in the know

Motion provides a clear overview of all team tasks, reducing the need for constant check-ins and enhancing communication. Tasks are sorted by priority, deadlines, and dependencies, aligning the team towards common goals.

Unified work management keeps tasks organized in one spot, making work smoother.

Motion consolidates to-dos, calendars, and tasks in one place, streamlining your workflow. It ranks tasks by importance and alerts you to deadlines, helping you manage your time effectively.

By integrating Motion into your operational planning, your business gains a tool that promotes efficiency, clarity, and focus, transforming operational planning into a strategic advantage.

Master operational planning with Motion

Planning is key, but with Motion, it's a breeze.

Want smoother workflows and better results?

Give Motion a try.

See how it can refine your operational planning and execution, making tasks simpler and your business stronger.

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Operational Planning Guide for SaaS Companies (With Examples)

Joe Garafalo

Founder and COO

The 2024 Financial Planning Blueprint

When building plans for your SaaS company, it’s easy enough for finance to come up with strategic business goals — a revenue increase of 25%, a phased roll-out of new product features in Q3 and Q4, or a 1% reduction in customer churn each month. The hard part? Determining whether or not these company goals are realistic .

Does your org have the capacity to achieve the goals it has set? If not, will it be able to expand its capacity fast enough, all while ensuring new expenses don’t overrun revenue growth and shorten your cash runway to dangerous levels?

Answering questions like these is the purpose of operational planning and the bread and butter of your org’s short- and long-term strategy. Operational planning revolves around building financial models that track progress toward your goals, helping you create strategies that get you from A to Z in the most efficient way possible.

While efficiency and tight resource allocation are key to strategic finance , the best operational business plans leave room for flexibility, allowing the org to respond to crises or changes in the SaaS landscape while still remaining on track toward those goals.

Table of Contents

What Is Operational Planning?

Operational planning is the process of setting budgets and goals on a departmental level within your company. It transforms your annual strategic plan into a week-by-week, day-by-day roadmap for specific departments like sales, marketing, and customer success to follow.

Since operational planning works at the departmental level, it’s best to use a bottom-up approach. As opposed to a top-down approach, a bottom-up approach involves working with departmental heads, asking them questions about workflows or specific line items and how they contribute to the success of the operational plan.

This benefits the company in two ways: first, finance can optimize resource allocation based on leaders’ unique knowledge of their departmental workflows. Second, by involving everyone in the planning process, it increases buy-in and commitment. You have a collaborative game plan where team members understand how their daily activities are contributing to strategic objectives.

Operational Planning vs. Strategic Planning

The most obvious difference between operational and strategic planning is scale, with strategic planning considering the big picture, and operational planning more focused on the day-to-day.

A strategic plan includes your overarching, annual goals — they’re your long-term vision, the goals the whole company is working towards. Operational plans, on the other hand, are specifically built for individual departments. They’re the division of those long-term annual goals into smaller, achievable milestones that highlight the relevant stakeholders and detail things like resource requirements and timeframe.

So, operational and strategic planning are two sides of the same “ operational finance ” coin. The challenge is building realistic operational plans to understand what’s actually achievable within a fiscal year. When finance can build a deep understanding of departmental workflows, they can construct strategic and operational plans with the perfect rhythm, and that’s when your org really starts to see results.

Operational Planning Examples

So, what does an operational plan look like? Let’s say a SaaS company aims to increase revenue by 20% over the course of one year.

To build your operational plan, you’ll need to determine what each relevant department will have to do — and how many resources they’ll need — to achieve this. How many conversions will the sales team need to make each month? What are staffing requirements? What about marketing initiatives? Which channels will be prioritized based on the amount of new customers required?

Another example of operational planning would be to retain customer loyalty by adding new product features. How many engineers will you need?

The best way to answer business operations questions like these is with robust, data-driven financial models. To get a clear sense of why, let’s break it down and look at the key elements of a successful operational planning process.

5 Key Components of Effective Operational Planning

Key components of operational planning include:

• Defining realistic goals
• Allocating resources to those goals
• Building out an achievable timeline
• Collaboration
• Flexibility

The first three involve the construction of the plan, while inter-departmental collaboration helps secure the necessary details as well as company-wide buy-in. Flexibility, the final component, allows finance leaders to alter the plan if the assumptions it was built on change.

1. Clear, Realistic Goals

The first thing you’ll need for your operational plan is a clear, strategic, number-based goal. Common goals for SaaS companies include reducing customer churn, increasing revenue, or increasing market share.

Get an exact number and, as mentioned, use financial models to determine if it’s realistic. For example, let’s say the strategic goal your company decides on is to increase revenue by 20%. Why 20%, not 25% or 30%?

Because, using your financial model, you’ve determined that revenue won’t grow fast enough to make up for the money you’d need to pay for the increase in headcount required to hit a 25% increase in revenue. 20% is your sweet spot — your strategic goal that’ll guide your operational plans.

Get the SaaS Financial Model Template

2. proper allocation of resources.

Once you’ve decided on a goal, it’s time to build a strategic budget .

Especially in the early stages, most SaaS companies don’t have a huge amount of resources. In an environment where employees have to wear many hats, a well-designed operational plan is built with an understanding of how specific resource allocation correlates with specific results.

In other words, the best operational plans are driver-based. A driver-based plan ties your business drivers to specific key performance indicators (KPIs). For example, the key driver for revenue growth is the number of sales reps, while for customer acquisition , it’s marketing spend.

Get a head-start on driver-based planning with a sales capacity model

Keep in mind, it’s not always necessary to increase your budget from last year. Use historical data only insofar as it contributes to your strategic goals. For instance, if historical data shows a specific marketing channel, say social media, brought in 10% of new customers, you may want to increase funding on social media to bring in 5% more new customers, to match with the number of new sales reps you’re bringing on board over the next year.

3. Timeline

Next, you’ll need to think about how each component of your operational plan will be spaced out over time. This is where you divide it into short-term goals for each department.

Continuing with the revenue example, this means modeling out how long it’ll take to grow your topline by a specific percentage. How do you do that? Since the key driver for revenue is your number of sales reps, you’ll need to consider related metrics like headcount and sales capacity planning .

Plugging these values into your financial model helps your org plan out its hiring cadence and understand how fast you can realistically grow revenue. Furthermore, this information will feed back into your operating budget.

Tools like Mosaic’s Topline Planner help you get a more exact timeline as to sales rep ramp rate , so you know how long you’ll need for that driver-based KPI — revenue growth — to hit full stride when you make a hire.

According to CJ Gustafson, CFO of PartsTech, missing the sales rep ramp rate can “totally kill your plan.” Get it right from the beginning so that you don’t have to readjust your timeframe and push back your strategic goals.

When you do headcount planning using a tool like Mosaic, you can see the effects of hiring new sales reps. You can also stagger start dates to see the effects on revenue over time.

So, let’s say hypothetically, you determine you need to add 4 new heads every quarter to meet the revenue target of 20% over a year. That’s an operational goal for HR. Using your model and based on ARR , you determine that sales reps need to secure 15 new customers each month — an operational goal for the sales department.

4. Collaboration

Buy-in is crucial for your operational plans to succeed. That means everyone needs to be “speaking the same language,” understanding how their actions are contributing to the overarching, strategic goals.

A tool like Mosaic empowers finance to act as a central hub, showing departments how they’re tracking against specific KPIs in a way that’s understandable. With customizable metrics and dashboards, everybody “gets” what they need to be doing and why they’re doing it.

5. Flexibility

So you’ve ensured your operational goal is clear and attainable, have set out an exact timeline, and have ensured buy-in and collaboration across the org.

Congrats! Your operating plan is complete. But that’s just the first step. You’ll still need to refresh it month to month by reforecasting . The idea is to continuously monitor progress so that, if necessary, you can reallocate resources. This way, whatever factors pop up will be reflected in your model, and you can readjust accordingly.

Successful Operational Planning With Mosaic

Galley , a series A startup, helps food organizations prioritize purchases and inventory based on recipes. Towards the beginning of 2022, they were successful in raising over $14 million.

But sailing wasn’t always so smooth for Galley.

Granted, they did get things started right by leveraging flexible, driver-based planning and connecting short- and long-term goals to operational metrics .

The only problem? Their driver-based planning relied on spreadsheets. Things got very complicated, very quickly.

In order to keep on top of things, Galley ended up having to pay an outside firm to create and update their spreadsheets and dashboards.

Fortunately, they quickly realized paying someone to have an outsourced model was unnecessary and began searching for a new solution. When Jason Peretz, Galley’s chief business officer, saw a Mosaic demo, he thought, “That’s what we need!” Mosaic would allow Galley to build their own financial models and dashboards by integrating directly with their systems — no more outsourced, spreadsheet-based models.

After making the switch, Galley has a clear, continuously updated view of how they’re tracking against KPIs. This allows them to stay in line with their operational goals simply by logging into the platform.

Common Pitfalls of Operational Planning and How To Avoid Them

Operational planning is no simple task. Even at a small- or medium-sized org, finance leaders have to align different departments, different mindsets, and a range of resources all on one common goal. And that leaves room for plenty of pitfalls. Awareness is the first step to avoiding them.

Lack of Alignment

First things first — your operational plans won’t get you anywhere if they don’t align with your strategic plans. Seems obvious, right? But it’s not necessarily as easy as it sounds. Use financial models to test your operational plans. See if, when you model them out, your forecasts line up with your long-term plans.

Lack of alignment can also refer to a lack of buy-in from individual departments. To get them on board, it’s best to provide easy access to relevant KPIs through a tool like Mosaic. Involve departmental heads in planning, too.

Lack of Flexibility

Predicting a year out isn’t easy. While your strategic goals may remain largely the same, your pathway to those goals — that is, your operational plan — may need to change. To keep yourself from getting tied to outdated budgets, leverage agile financial planning processes such as driver-based planning and rolling forecasts so that you can shift if needed.

Lack of Transparency

Buy-in is important for the success of your operational plan. They’re bottom-up, departmentally-based plans, after all. With a tool like Mosaic, complicated metrics and KPIs that were formerly confined to finance become a guidepost for the entire company. Team members can see how their daily actions are contributing to those goals with clear, beautiful dashboards that display complex information in an easy-to-understand way.

Lack of Clear Visibility

Especially as an early-stage SaaS company, every resource counts. Disconnected spreadsheets are not going to give you a clear, real-time view. You need a platform that integrates your working capital, cash flow from operating activities , ERP, and CRM data, to name just a few, in order to get data to key stakeholders right when they need it.

Instead of relying on templates, it’s also best to build your own financial models. That’s because free templates available on Google can be hard-coded with assumptions — assumptions that don’t reflect your unique org.

Getting Too Ambitious

We get it — startups want to grow fast. But, to save yourself a lot of pain in the future, you need to make sure that growth is sustainable.

Use financial models to see what’s realistic and what isn’t. Understand headcount costs and sales rep ramp rate to achieve the right balance between your largest expense and revenue, always keeping your cash runway in view.

Use sensitivity analysis to understand which of your business levers are most critical, then model best and worst-case scenarios.

Using Tools That Can’t Scale

When your goal is to grow, it doesn’t make sense to rely on spreadsheets in Excel. As you secure more and more customers, the amount of user and transaction data will outpace spreadsheet capacity. They’re also very prone to human error, which builds flaws into your financial models.

For operational success — not to mention your own sanity — it’s better to use tools that have built-in integrations so you can automatically consolidate data from your org’s enterprise software and financial statements.

Future-Proofing Your Operational Plan With Mosaic

For SaaS companies, a year is a long time — arguably much longer than it is for other types of companies. That’s because, in the SaaS world, things move very fast, and quite a lot can change, even quarter to quarter. Sources of funding can dry up, competition can increase, or your target audience may shift. Without the ability to pivot, your best-laid annual operating plans could be laid to waste.

That’s why it’s important to build flexibility into them right from the get-go. With an agile, resilient approach to financial modeling, Mosaic was designed with SaaS companies in mind. By combining driver-based planning with rolling forecasts , you get a moving picture of the future of your business. With 150 out-of-the-box SaaS metrics, staying on track with your operational goals has never been easier.

Create accurate rolling forecasts with real-time data

Your goal is to future-proof your plan so that, even if the market shifts, your day-to-day, week-to-week action plans can still remain on target towards your long-term, strategic goals, and you can bring your startup to the next level. Request a demo to see Mosaic in action.

Operational Planning FAQs

How does operational planning differ from strategic planning for saas companies.

The difference between strategic planning and operational planning is one of scale. Strategic planning involves building high-level, long-term goals for the company. Operational plans detail the work each department will put in month-to-month, week-to-week, or even day-to-day to help make those high-level, strategic goals a reality.

What are some common challenges in operational planning for SaaS businesses?

SaaS companies often grow quickly. This can make it difficult to keep tabs on all the data and metrics required to build successful operational models, especially if you’re relying on spreadsheets.

SaaS companies are also subject to a constantly changing landscape. High levels of competition, shifting customer preferences, and unreliable access to funding can all make it difficult to determine what to prioritize in a SaaS business strategy.

How can Mosaic help in operational planning for SaaS companies?

Successful operational planning ultimately comes down to financial models. With a catalog of over 150 SaaS metrics, Mosaic helps you benchmark driver-based financial models that guide daily tasks and decision-making.

For SaaS companies, it’s critical that operational plans remain flexible. Mosaic helps you do this by simplifying driver-based planning and helping you build continuously updating rolling forecasts tied to your objectives.

Related Content

• 9 Financial Dashboard Examples for Strategic Decision Making
• How to Use AI for Business Financial Planning
• Revenue Forecasting & Planning Guide: 4 Models For Planning Your Top Line

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Overview: Operational Planning

A company needs a strategy plan, but that’s not enough. To ensure that your organization’s larger goals are achievable, you need an operational plan to manage the day-to-day tasks.

Operational plans do not have to be reserved for large companies. Individuals and small  businesses  can also benefit with operational planning.

This article will explain, what is operational planning is and how to make one without feeling overwhelmed.

What is an Operational Plan?

The operational plan guides and helps the teams to stay on the required project timeline and to make crucial decisions about the company’s long-term goals.

Who should develop an Operational Plan?

An operational plan is necessary to capture who is doing what and when. An operational plan should be smaller than your  strategic plan  in terms of scope and timeline. 

Instead of creating an operational plan for the entire company, you can create one for each department or team. You could create an operational plan for one initiative in a larger company. This is similar to a detailed plan.

To illustrate, you might create an operational plan that outlines the daily tasks your IT department must perform to support the company. 

The operational plan for your IT department might include details such as how often IT team members will check the IT request project inbox and budget details. It also may detail how IT team members will onboard new employees and how they will equip them.

An operational plan should be created at three levels:

• Scope:- Your operational plan will detail the who, what, and when for each activity. This plan should be focused on one team or initiative.
• Timeline:-  Depending on the speed of your organization’s movements, your operational plan should be spread over a quarter, six months, or a full fiscal year.
• The stakeholder:-  Make sure that the people involved with operational planning are near the work so they can accurately project the work and predict the work to be included in it.

Types of Operational Planning

There are basically two types of operational plans: Standing or single-use.

• A single-use plan  is operational planning that relates to one project. It is discarded after the project is completed. This is useful if the project doesn’t align with another project or won’t be used again in the future. It can be customized to suit each project.
• A standing program  is operational planning that’s repeated. This plan is used by a department for tasks or projects that arise frequently. These plans will save you the hassle of having to reinvent the wheel every time. However, you will lose some flexibility.

5 Steps For Operational Planning

You are not expected to create new plans or set new goals during the operational planning process. To create an operational plan, you should assess the work of your team and what you need to do daily or weekly to reach your strategic goals.  Here’s how:

1. Get started with a strategy plan

Create a strategic plan if you don’t have one. Before you can begin to break down the details, you need a long-term vision.

A strategic plan can be created in four steps:

• Identify your position
• Develop your strategy
• Your strategic plan should be created
• Manage, share, and monitor your strategic plan

2. Reduce your scope

To create an operational plan that is detailed-oriented, it is important to limit the scope of your project to a specific team, department, or focus area. Your company’s size will determine the scope of your operational plans.

Imagine, for example , that you are breaking down your strategic plans into action plans for different company departments. 

Marketing teams can include design, product marketing, and social media. You should develop an operational plan for each of the smaller teams to capture daily functions.

3. Identify key stakeholders

Before you create an operational plan, determine who will be involved in it. The members of the team responsible for creating the operational plan should have a good understanding of the actions described in the plan.

Depending on the size of your team, the head of the design group and the team leaders should create the operational plan for the design team. After creating their operational plan, they should share it with the head of marketing to finalize approval.

Your operational plan describes the actions that your team will take to reach your goals within a given timeframe. 

You can outline an operational plan here:

• The goals of your team
• The deliverables will be realized by the operational plan
• Any desired outcome or quality standards
• Your operating budget, as well as your staffing and resource needs
• How to monitor progress and make reports

These are the questions to ask yourself if you have difficulty figuring out the details of your operational plan.

• What are we supposed to do? This information should be derived from your strategic plan or yearly goals.
• What are the daily tasks we must complete to reach our goals? These could be your daily tasks or new work you need to do.
• Who is responsible for these tasks? Each task should have a single owner to ensure that there is no confusion as to who to contact for updates or questions.
• What are the metrics that will help us achieve our goals? If you don’t have SMART, create it.

5. Update and share your operational plan

Once you have created your plan, share it with  key stakeholders  to make sure they know the team’s main goals and the daily tasks required to achieve them. You can manage your plan and update it on a shared platform that tracks real-time progress.

Things will change, just like any other element of project planning. You must monitor the progress of your operational plan, and provide updates to key stakeholders and team members about how you are tracking towards your goals. Written status updates provide a monthly progress report.

What are the things should be included in Operational Planning?

The things should be included in Operational planning are:

Operational Budget: An operational budget is a forecast of projected running expenditures and income for a specific time period. The operational budget, like other types of budgets, outlines the amount of money available to buy raw materials, equipment, or anything else required for corporate operations. It is critical to keep your expenditure under your operating budget; otherwise, your firm will run out of resources to carry out its routine operations.

Operational Objectives: It is critical to link your operational goals with your strategic goals. For example, if one of your strategic goals is to boost sales by 25% over the next three years, one alternative operational goal is to hire more salespeople. Always take your strategic plan objectives and transform them into one or more action items.

Operational Timeline:  It is critical to create a timetable for your operating plan. Most of the time, your operational plan will be the same length as your strategic plan, but in other circumstances, you may need to produce numerous operational plans for different goals. Because not all operational plans are created equal, the length of your operational timetable will be determined by the length of your projects, workflows, and procedures.

Quality Assurance and Control:  Most businesses have quality assurance and control methods in place for a number of reasons, including consumer safety and regulatory compliance. Furthermore, quality assurance concerns may cost your company millions of dollars, thus creating quality management practices is an important stage in operational planning.

Executive Summary:  An executive summary is a short document that highlights the content of longer papers such as business plans, strategic plans, or operational plans. Their primary goal is to offer a short summary for time-pressed stakeholders.

Key Performance Indicators:  Establishing key performance indicators (KPIs) to monitor the productivity of your business operations is critical. You may create as many KPIs as you need for each of your business operations. You may, for example, set KPIs for marketing, sales, product development, and other critical departments in your organization. Product launch dates, the number of manufactured items, the number of customer care cases closed, the number of 5-star reviews received, the number of clients acquired, revenue increased by a specific percentage, and so on are examples of this.

Advantages of Operational Planning

Clarifies your organizational goals

Managers and department heads can use an operational plan to define their daily tasks, activities, and responsibilities.

This also shows how each team member contributes to the overall goals of the company or department. Managers and employees cannot measure the success of their daily tasks against predetermined outcomes if they don’t have a plan.

Team productivity is increased

Businesses are always on the lookout for ways to improve productivity. This in turn leads to higher profits. An operational plan is one of the most influential and simple ways to increase efficiency.

Employees who know their daily responsibilities and objectives are more productive. If they aren’t clear on what is expected of them, their productivity could suffer.

This vital information is provided to employees across the company and in every department by an operational plan.

Boost your organization’s profitability

A plan can help keep teams and projects on track.  Teams can increase their revenue and create new products when they are well managed.  Innovation pays off. According to a BCG survey, 60% of innovation-focused companies report steady increases in revenues year after year. Teams can innovate faster and better when they have an operating plan.

Increases Competitive Advantage Components and multiple levels are combined to get competitive advantages.

Your workflows will run more smoothly if you coordinate the various parts using an operational plan. This will allow you to deliver high-quality deliverables on time, providing a great customer experience and helping you stay ahead of your competitors.

Operational Planning Disadvantages

Human error possible

Human error is a problem in manufacturing. It can happen when a product goes from production to sales.

Operations management teams must coordinate with cross-functional teams like finance, engineering, and  Human Resources . Each team will be able to clearly understand the department’s end goals.

Interdependency amongst parts

Implementing an operations planning process can be a problem because it depends on the coordination between parts.

One component failing can cause a plan to fail, which can have a negative impact on the next. One process disruption can lead to a breakdown in the whole process and render the operational plan useless.

Operational planning vs. Strategic planning

Although they are related, these planning strategies have a different focus.

Operational planning refers to the daily work involved in executing your strategy. This ensures that you have the right resources and people to do your work efficiently.

Strategic planning, on the other hand, is about planning for the future and identifying the pipelines that will be needed.

The U.S. Bureau of Labor estimates that nearly 7 million Americans are self-employed, while another 10 million are employed by small businesses.

Chances are that your company has a form of strategic planning if you work for a large corporation. If you are one of the millions working remotely, however, success will depend on your operational planning.

Read More:   Operational planning vs. Strategic planning

An operational plan isn’t rocket science. But you have to do the work. An operational plan that is well-designed will include detailed information about manpower, resources, and the steps to be taken.

Although it may seem like a lot of work, the result will be worth it when your department completes a highly-rated project on schedule and within budget.

However, to get the help in managing/creating your operation plan, we are OnDemand International , here we are to help you out in each & every step of yours.

Once the company’s goal is established, the team will create a strategic plan that includes three components: sales, marketing, and operations.

A solid plan is essential for any operation. There are five main components that you should focus on: Preparation (marketing), logistics, human resources (HR), financial limits, and preparation.

The most common difference between the two types are ongoing and single-use plans

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Blog Business 10+ Operational Planning Examples to Fulfill your Strategic Goals

10+ Operational Planning Examples to Fulfill your Strategic Goals

Written by: Danesh Ramuthi Oct 25, 2023

An operational plan is a comprehensive, action-driven document that maps out how daily activities within an organization fuel the journey towards achieving strategic objectives.

Essentially acting as the nexus between high-level strategy and practical execution, this plan ensures that every department, from human resources to specific departments, operates in synchrony, aligning their day-to-day activities with the broader strategic goals.

By streamlining processes, it fosters cohesive efforts amongst diverse cross-functional teams, ensuring that both individual team members and entire departments work together harmoniously towards the company goals.

Ready to sculpt your organization’s future? Start your journey with venngage business plan maker and leverage their expertly crafted operational plan templates . 

Click to jump ahead: 

Why is an operational plan important?

10 operational plan examples, what should an operational plan include, how to write an operational plan.

• Strategic plan vs operational plan: What is the difference? 

In summary 

An operational plan is crucial because it serves as a bridge between a company’s high-level strategic planning and its day-to-day activities, ensuring that the business operations align with the strategic goals. 

While a strategic plan provides a long-term vision, outlining the company’s objectives and goals to gain competitive advantages in the business environment, the operational plan outlines the specific actions, key elements and resource allocation required to achieve those objectives. 

For example, while the strategic plan might set a goal for revenue growth over the fiscal year, the operational plan provides a detailed roadmap, breaking down major projects, assigning responsibilities to individual team members or specific departments and setting key performance indicators to monitor progress and ensure the entire organization works together effectively.

Operational planning, in essence, transforms the strategic objectives into actionable plans, ensuring that the entire team, from department heads to diverse cross-functional teams, is aligned and works in tandem to support revenue growth, increase productivity, and achieve the desired outcomes. 

Operational plans, through a well-structured operational planning process, also provide a clear understanding of the day-to-day activities, allowing team members to know their roles, leading to better collaboration and synergy. 

Moreover, by having clear operational plan examples or templates, businesses can ensure realistic expectations, manage their operating budget effectively and track progress through key performance metrics, thus ensuring that the company stays on course to realize its long-term vision.

Operational plans play a pivotal role in the business landscape, bridging the gap between strategic vision and tangible actions. They translate the overarching goals of an organization into detailed procedures, ensuring that daily operations are in line with the desired strategic outcomes. 

In the section below, I will explore a few operational plan examples, shedding light on their structure and importance.

Business operational plan example

A business operational plan is a comprehensive document that elucidates the specific day-to-day activities of a company. It presents a detailed overview of the company’s organizational structure, management team, products or services and the underlying marketing and sales strategies. 

For businesses, irrespective of their size, an operational plan can prove invaluable. By laying down the business goals and objectives, it acts as a blueprint, guiding entrepreneurs through the creation and implementation of strategies and action plans. The planning process also incorporates mechanisms to track progress and performance. 

Additionally, for startups or companies looking to scale, a meticulously crafted operational plan can be pivotal in securing funds from potential investors and lenders.

Layered on this are details about the company’s organizational structure, its products or services and its marketing and sales strategies. 

The document also delineates the roles and responsibilities of each team member, especially the management and key personnel. Given the dynamic nature of the business environment, it is imperative to revisit and update the operational plan regularly.

Related: 15+ Business Plan Templates for Strategic Planning

Simple operational plan example

A simple operational plan, often used by startups or smaller enterprises, emphasizes the basics, ensuring that the fundamental aspects of the business operations are captured succinctly. While it might not delve into the intricacies of every operation, it provides an overview of day-to-day activities, highlighting the goals and objectives the business aims to achieve in the short term.

In essence, this plan revolves around core elements like the company’s main objectives for the fiscal year, key responsibilities assigned to individual team members and basic resource allocation. A straightforward market analysis might also be included, offering insights into customer needs and competitive advantages the business hopes to leverage.

Though simple, this operational plan example remains pivotal for the organization. It provides a roadmap, guiding team members through their daily responsibilities while ensuring that everyone is working together towards shared goals. It becomes especially essential for diverse cross-functional teams, where clarity of roles can lead to increased productivity.

Modern operational plan example

In today’s fast-paced business environment, the emphasis on efficiency and innovative processes is paramount. The modern operational plan example caters precisely to this demand. Ideal for organizations aiming to streamline processes and highlight workflow, this type of operational plan emphasizes a more dynamic approach to planning. 

It not only reflects the evolving nature of business operations but also provides a modern backdrop for content, ensuring that the presentation resonates with the current trends and technological advancements. The use of modern tools and platforms within this plan enables diverse cross-functional teams to work together seamlessly, ensuring that day-to-day activities are synchronized with the company’s long-term vision.

Furthermore, such an operational plan helps the entire organization stay agile, adapting rapidly to changes in the business environment and ensuring alignment with strategic goals.

Minimalist operational plan example

The minimalist operational plan example champions simplicity and clarity. By focusing on clear and concise business strategies, it eliminates any potential ambiguity, ensuring that team members and stakeholders have an unclouded understanding of the company’s objectives and goals. 

The minimalist design not only promotes easy comprehension but also aligns with the modern trend of decluttering, ensuring that only the most vital components of the operational planning process are highlighted. 

This approach leaves no room for confusion, streamlining the planning process and making sure that individual team members and departments are aligned with the business’s key objectives. 

Moreover, the flexibility offered by a minimalist design allows businesses to craft an operational plan template that is not only functional but also accurately reflects their brand image and core values, ensuring cohesion across all aspects of the business strategy.

Clean operational plan example

The clean operational plan example stands as a testament to this principle. Ideal for businesses that prioritize clarity and directness, this format seeks to convey goals and strategies without overwhelming stakeholders. 

While maintaining a neat and organized layout, it ensures that tasks are managed effectively, helping team members grasp their roles and responsibilities without getting lost in excessive details.

One of the primary advantages of a clean operational plan is its ability to eliminate distractions and focus solely on the critical aspects of operational planning. 

Such a design aids in making sure that diverse cross-functional teams can work together harmoniously ensuring that day-to-day activities align seamlessly with the company’s long-term vision. 

The simplicity of the clean operational plan not only supports revenue growth by ensuring efficiency but also reinforces the company’s strategic goals, making it an excellent tool in the arsenal of businesses that believe in clear communication and precise execution.  

An effective operational plan acts as a roadmap, directing how resources should be allocated and tasks should be performed to meet the company’s objectives. Here’s what a comprehensive operational plan should encompass:

• Goals and objectives : Whether short-term or long-term, the operational plan should define clear goals and objectives that align with the company’s strategic plan. This gives direction to the entire organization, ensuring everyone is working towards a common aim.
• Clear responsibilities for team members : It’s essential that team members understand their roles within the operational plan. By outlining who is responsible for what, the plan ensures that there are no overlaps or gaps in duties and that everyone has clarity on their day-to-day activities.
• Assigned tasks: Alongside responsibilities, specific tasks need to be allocated to individual team members or specific departments. This granularity in assignment ensures that every aspect of the operational plan is covered.
• Timeline: This provides a clear schedule for when each task or objective should start and finish. A well-defined timeline assists in monitoring progress and ensures that the plan stays on track.
• Budget and resources : Every operational plan needs to factor in the budget and resources available. This includes everything from the operating budget to human resources, ensuring that the business has everything it needs to execute the plan effectively.

Read Also: 6 Steps to Create a Strategic HR Plan [With Templates]

As businesses evolve, it’s essential to have a comprehensive and adaptive operational plan in place to navigate the complexities of the business environment. Here’s a step-by-step guide to help you craft an effective operational plan:

Step 1: Define your goals and objectives

Begin with a clear understanding of your strategic goals and objectives. This will act as a foundation for your operational plan. Ensure that these goals are in alignment with your company’s strategic plan and provide both short-term and long-term visions for the business.

Step 2: Determine roles and responsibilities

Identify the key stakeholders, department heads and team members who will play pivotal roles in executing the plan. Assign responsibilities to ensure that everyone knows their part in the planning process and day-to-day activities.

Step 3: Develop a timeline and milestones

Establish a clear timeline that breaks down the operational planning process. Include key milestones to track progress and ensure the plan remains on target.

Step 4: Allocate budget and resources

Determine the resources required to achieve your goals and objectives. This includes estimating the operating budget, identifying human resources needs and other resource allocations, ensuring you have everything in place to support revenue growth and other business needs.

Step 5: Outline day-to-day operations

Detail the day activities that are integral to the business operations. This will provide clarity on how different tasks and functions work together, ensuring efficiency across diverse cross-functional teams.

Step 6: Monitor and measure performance

Integrate key performance metrics and indicators to regularly monitor progress. Using both leading and lagging indicators will provide a comprehensive view of how well the operational plan is being executed and where improvements can be made.

Step 7: Review and adjust regularly

The business environment is dynamic and as such, your operational plan should be adaptable. Regularly review the plan, comparing actual outcomes with desired outcomes and adjust as necessary to account for changes in the business environment or company goals.

Step 8: Document and communicate

Create an operational plan document, potentially using operational plan examples or an operational plan template for guidance. Ensure that the entire team, from individual team members to the entire organization, is informed and aligned with the plan.

Related: 7 Best Business Plan Software for 2023

Strategic plan vs operational plan: What is the difference?

When running an organization, both strategic and operational planning play pivotal roles in ensuring success. However, each has a distinct purpose, time horizon and scope. Here’s a breakdown of the differences between these two essential business plans:

• Strategic plan : This plan sets the course for the organization’s future. It embodies the long-term vision and mission, detailing the objectives necessary to achieve it. The essence is how everyone, from C-suite executives to individual team members, collaborates towards realizing this vision.
• Operational plan : This is the roadmap for the day-to-day activities of the organization. While the strategic plan looks at the bigger picture, the operational plan hones in on the tactics and execution. It is crafted to support organizational goals with a focus on short-term activities specific to departments or functions.

Time horizon :

• Strategic plan : Long-term in nature, usually spanning three to five years.
• Operational plan : Concentrates on the short-term, with plans laid out yearly, quarterly, or even monthly.

Modification and updates :

• Strategic plan : This evolves over longer intervals, typically three to five years. There might be minor adjustments year over year based on changing business needs and the external business environment.
• Operational plan : Due to its short-term focus, it requires frequent assessments. Plans might be adjusted yearly, quarterly or even monthly to ensure alignment with the strategic objectives and current business environment.

Created by :

• Strategic plan : Crafted by the upper echelons of management – think CEO, CFO and other C-suite members.
• Operational plan : These plans come to life through mid-level management and department heads, ensuring alignment with the broader strategic vision while catering to specific departmental needs.
• Strategic plan : Broad in its outlook, it takes into account external factors like market trends, competition, customer needs and technological innovations.
• Operational plan : This narrows down the focus to the internal workings of the organization. It revolves around technology in use, key performance indicators, budgeting, projects, tasks and the allocation of responsibilities among team members.

As we’ve traversed through the importance of operational planning to various operational plan examples, it becomes evident that having a detailed and efficient operational plan is pivotal. 

From the business-centric to the minimalist approach, every operational plan serves as the backbone, guiding team members and ensuring that day-to-day activities align with the long-term vision and strategic goals.

By knowing what should be included in these plans and how to craft them, businesses can navigate the complexities of their operational environment with greater confidence.

For those looking to refine their planning process or start from scratch, the world of digital tools has made it significantly easier. Venngage offers business plan maker and operational plan templates designed to simplify the process. 

Whether you need to create an operational plan or draft a business strategy, their intuitive platform can guide you every step of the way.

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Business Plan Operational Plan - Everything You Need to Know

Welcome to our comprehensive guide on the business plan operational plan. A fundamental component of any effective business plan and a key component of growth  As a business owner, executive, or manager, you understand that a well-articulated strategy is crucial for the success and growth of your venture. But have you ever stopped to ponder how this strategy is executed on a day-to-day basis? How do we transform those lofty goals into tangible, everyday actions? This is where an operational plan comes into play. An operational plan outlines the practical details of how your business will operate and deliver on its strategic goals. It describes the inner workings of your business, detailing everything from your daily operations and production processes to your team's roles and responsibilities.  In this guide we will delve into the purpose and scope of an operational plan, its essential elements, and how to develop one effectively. We'll also share valuable tips, best practices, and common pitfalls to avoid. 

Table of Contents

• Operational Plan - The Purpose
• The Essential Elements
• Description of Operations
• Steps for Creating Operational Plan
• Tips & Best Practices

Real-Life Case Study

• Common Pitfalls
• Final Thoughts

Business Plan Operational Plan - The Purpose

The role of an operational plan in a business cannot be overstated. This fundamental document is a strategic guide that outlines the direction, timelines, and resources necessary to achieve specific objectives within an organisation. An operational plan is the driving force behind the execution of your business strategy. It allows you to map out clear and attainable operational goals that align with your overall strategic objectives, breaking them down into manageable, actionable steps.  Whilst acting as a map for your business you can also use to track performance via measurable objectives.

Scope of an Operational Plan in Day-to-Day Operations

The business plan operational plan should detail key elements such as the operational processes, resource allocation, tasks, and timelines. From personnel and location to inventory, suppliers, and operating hours - the operational plan touches every aspect of your business. It's a living document, evolving and changing as your business grows and adapts to market dynamics and industry trends.

Remember, the opening of your Executive Summary sets the tone for the entire document. Make it memorable and compelling to encourage the reader to continue exploring.

Business Plan Operational Plan - The Essential Elements

Creating an operational plan requires thoughtful consideration of several vital components that collectively represent the full breadth of your company's operations. Each one plays a crucial role in defining the day-to-day activities that will lead to the fulfilment of your strategic objectives.

Description of the Business Operations

Every operational plan starts with a comprehensive description of the business operations. This includes outlining your production process, operations workflow, and supply chain management. Defining these processes in clear terms provides a concrete vision of how products or services will be created and delivered, identifying the necessary resources and potential bottlenecks along the way.

People are the lifeblood of your business, and it's essential to define their roles and responsibilities within the operational plan. This involves outlining the team's structure, detailing who is responsible for what, and defining key performance indicators (KPIs) for each role. By assigning clear responsibilities, you ensure the efficient use of human resources and promote accountability.

Your business location and the physical resources at your disposal play a crucial role in your operational plan. Detail the premises your business will operate from, the equipment required, and any associated costs. Whether you're operating from a single office, managing multiple retail outlets, or running a home-based online business, defining your operational space is crucial.

Effective inventory management is crucial for maintaining smooth operations, particularly for businesses dealing with physical products. Your operational plan should outline how you will manage your supplies, including how often you'll restock, which vendors you'll use, and how you'll handle storage and distribution. Remember, balancing supply with demand is key to avoiding unnecessary costs or stockouts.

Your operational plan needs to address your suppliers - who they are, what terms and agreements you have with them, and how you will manage these relationships. The reliability and quality of your suppliers can greatly affect your operations, making this a critical consideration in your planning process.

When constructed effectively, these elements come together to form an operational plan that is clear, comprehensive, and actionable. In the next section, we'll explore the steps to develop such a plan, and later, we'll offer some tips and best practices for bringing your operational plan to life. Stay tuned! Looking an industry specific guide to business plans, then check out our business plan guides homepage .

Steps for Developing an Operational Plan

Creating a comprehensive and effective operational plan involves careful planning, clear communication, and continuous monitoring and evaluation. Let's explore these steps in detail:

• 1. Setting Clear Operational Goals and Objectives: The first step towards developing an operational plan is defining what you want to achieve operationally within a given period. These goals should align with your strategic business objectives and be specific, measurable, attainable, relevant, and time-bound (SMART).For instance, if your strategic goal is to increase market share, your operational objective might be to ramp up production by a certain percentage within the next quarter. Or, if you aim to improve customer satisfaction, you might focus on improving the quality and durability of the product.
• Regular Monitoring and Evaluation: With your operational goals in place, the next step is to monitor progress and evaluate performance regularly. Key Performance Indicators (KPIs) and metrics should be set for each operational goal. These could range from production volumes and delivery times to quality measures and cost efficiency.Consistently monitoring these metrics allows you to measure progress, identify any potential issues or bottlenecks early on, and adjust your operational plan as necessary.
• Communication: This is a crucial when implementing your operational plan. Ensure all stakeholders, including team members, suppliers, and partners, are aware of the plan and understand their roles within it.Hold regular meetings to update everyone on progress and address any challenges or changes in the plan. Remember, your operational plan should be a living document, flexible enough to adapt to changes and updates as required.

Business Plan Operational Plan - Tips and Best Practices

Creating an operational plan that works requires more than just defining goals and setting performance metrics. There are nuances and best practices that can significantly enhance the effectiveness of your operational plan. Here are a few tips to guide you:

• Involve Your Team : The people responsible for executing the operational plan should also contribute to its creation. Encourage your team to share their ideas, challenges, and insights. Their first-hand experience can lead to more practical, achievable operational plans. Besides, team involvement promotes ownership and commitment to the plan's execution.
• Keep It Flexible : Operational plans need to be adaptable to accommodate changes in the business environment, such as market dynamics, customer preferences, or new regulations. Regularly review and update your plan to ensure it remains relevant and effective. Remember, the operational plan is a guide, not a set-in-stone document.
• Be Specific : Avoid ambiguity in your operational plan. Use clear, concise language and provide detailed action plans, including what needs to be done, by whom, when, and with what resources. This clarity reduces misunderstanding and keeps everyone on the same page.
• Use Technology : Leverage the power of technology to enhance your operational efficiency. There are numerous tools and software available that can help with project management, process automation, data analysis, and more. Use these tools to streamline your operations, track performance, and improve communication.
• Consistency with the Business Plan : Ensure your operational plan aligns with your broader business strategy. This alignment ensures that your day-to-day operations contribute effectively to achieving your long-term business objectives.

By applying these tips and best practices, you can create an operational plan that's not only effective but also fosters a culture of continuous improvement and strategic alignment in your organisation.

To further illustrate the importance of a well-executed operational plan, let's look at a real-life case study - the global tech giant, Apple Inc. Apple's operational plan is a testament to the company's relentless focus on precision, quality, and groundbreaking innovation. One key operational strategy that Apple uses is its tight control over its supply chain.

• Description of Business Operations: Apple's business operations are highly integrated and efficient. They manufacture and market a variety of products, including iPhones, iPads, Macs, and services like iCloud and Apple Music. Their production process is complex, involving design, prototyping, manufacturing, and distribution, often happening across different continents.
• Personnel: Apple's workforce is highly specialised. Each team and department has clearly defined roles and responsibilities, whether it's designing new products, managing supplier relationships, or ensuring quality control. Employees at Apple are encouraged to think differently, fostering a culture of innovation.
•  Location: Apple operates in multiple locations worldwide, including its iconic headquarters, Apple Park, in Cupertino, California. The company also has a network of retail stores across the globe and contracts with manufacturing facilities, primarily in Asia.
•  Inventory: Apple's inventory management is legendary for its efficiency. Through just-in-time inventory practices, Apple reduces storage costs and minimises the risk of stock obsolescence, contributing to its streamlined operations and impressive profit margins.
• Suppliers: Apple has a vast network of suppliers from around the world. It maintains strong relationships with these suppliers and holds them to strict standards of quality and ethical business practices, ensuring the integrity and excellence of its products.

Apple's operational plan aligns seamlessly with its business strategy, focusing on innovation, quality, and customer experience. This has allowed the company to maintain its status as a market leader and pioneer in the tech industry. This case study illustrates how an effective operational plan can turn a strategic vision into a successful reality. In the next section, we'll delve into common pitfalls to avoid when creating your operational plan.

Common Pitfalls to Avoid

As you embark on developing an operational plan for your business, it's crucial to be aware of some common pitfalls that can hinder your plan's effectiveness. Here, we outline these potential obstacles and provide advice on how to avoid them.

• Lack of Alignment with Strategic Goals: One of the most common mistakes is a disconnect between the operational plan and the company's strategic goals. Your operational plan should directly support and drive towards achieving these objectives. Ensure all operational goals, processes, and tasks align with your overarching business vision.
• Overly Complex or Unrealistic Plans: While an operational plan needs to be comprehensive, it also needs to be practical and achievable. Avoid creating overly complex plans that your team cannot implement or that require resources beyond your means. Strike a balance between thoroughness and simplicity for a more manageable plan.
• Neglecting to Involve the Team: Your team members are the ones who will execute the operational plan, and neglecting to involve them in its creation can lead to resistance or confusion. Make sure your team is part of the planning process, understands the plan, and is committed to its implementation.
• Ignoring Market Changes: A business doesn't operate in a vacuum. Failing to consider external factors such as market trends, customer behaviour, and economic conditions can derail your operational plan. Ensure your plan is flexible and adaptable to respond to changing circumstances.
• Insufficient Monitoring and Evaluation: An operational plan is not a set-and-forget document. Regular monitoring and evaluation are critical to assess progress, identify bottlenecks, and make necessary adjustments. Make sure you set measurable KPIs and allocate resources to track and review them.Avoiding these common pitfalls will significantly enhance the effectiveness of your business plan operational plan. With a solid operational plan in place, your business is well-positioned to achieve its strategic objectives, driving growth, and success.

Wrapping It All Up

Operational planning plays a vital role in any business, acting as a roadmap to direct daily operations and align them with the strategic goals of the company. As we have seen in this blog post, creating an operational plan involves several important components and steps, from defining clear goals to continuous monitoring and evaluation. Remember, the key to an effective operational plan is to keep it flexible, involve your team and maintain alignment with your business plan. If you implement those principles and regularly review and update you will have set a solid foundation for future business growth. We wish you all the best on your operational planning journey, and remember - every step you take towards detailed and thoughtful planning is a step towards long-term success and growth for your business. If you require any further help on other sections of your business plan, visit our Learning Zone for several in-depth guides.

Business Plan Operational Plan - Frequently Asked Questions (FAQs)

To wrap up this guide, let's address some frequently asked questions about operational plans in business.

• What is the difference between a strategic plan and an operational plan? A strategic plan outlines a company's long-term vision, objectives, and strategies for achieving those objectives. It's a high-level roadmap for the direction the company intends to go. On the other hand, an operational plan details the day-to-day activities and resources necessary to achieve the strategic goals. It's the 'action plan' that brings the strategic plan to life.
• How often should an operational plan be reviewed? The frequency of review may vary depending on your business size, type, and industry, but generally, it is a good idea to review your operational plan at least quarterly. The regular review ensures that the plan is still relevant and effective, allowing for adjustments as business conditions change.
• How long should an operational plan be? There is no set length for an operational plan, as it will depend on the complexity of the operations. It needs to be comprehensive enough to cover all operational aspects of the business but concise enough to be understandable and manageable.
• Who is responsible for creating an operational plan? While the business owner or top management usually leads the creation of an operational plan, it should involve input from all levels of the organisation. Each department or team can provide valuable insights into their operations, challenges, and opportunities, leading to a more realistic and effective plan.
• How can I measure the success of my operational plan? The success of an operational plan is measured by how effectively it helps achieve the strategic objectives. Regular monitoring of Key Performance Indicators (KPIs) related to your operational goals will provide a clear indication of your plan's success. If these KPIs are consistently met, your operational plan is likely successful. If not, adjustments may be needed.

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Operational Planning: How to Make an Operational Plan

June 6, 2022 - 10 min read

Having a strategic plan is essential to any company, but it’s not enough. To ensure that the broader organizational goals are within reach, you need an operational plan for day-to-day work. 

Using templates to manage your operation plan can help simplify your complex processes and save you time. You know how a shopping list helps you remember what to buy at the store? Templates are like that for your work. And Wrike has many templates ready to go for different kinds of jobs. 

For example, you can use the retail trade template to see what step comes next when adding something new for customers to buy. Then there’s the business operations template , which helps you and your team keep track of your business plan without getting wires crossed. And when you need to manage bills, you can use the invoice tracking template . All these templates are great tools for keeping an operational plan ticking over.

In this blog post, we’ll explain what an operational plan is, show you how to create one without feeling overwhelmed, and provide you with an example of an operational plan. We’ll also share our prebuilt templates to get you up and running quickly.

What is an operational plan?

An operational plan is a document that outlines the key objectives and goals of an organization and how to reach them.

The document includes short-term or long-term goals in a clear way so that team members know their responsibilities and have a clear understanding of what needs to be done.

Crafting an operational plan keeps teams on track while guiding them in making crucial decisions about the company's long-term strategy.

Operational planning vs strategic planning

Though related to each other, these two planning strategies differ in their focus.

Operational planning is the process of the day-to-day work to execute your strategy. It ensures you have all the resources and staff necessary to get work done efficiently.

On the other hand, strategic planning is about looking ahead into the future, identifying the upcoming pipeline, and figuring out how you can prepare for it.

According to the U.S. Bureau of Labor, nearly 7 million Americans are self-employed, with an additional 10 million employed by small businesses. 

If you're working at a large corporation, chances are your company will have some form of strategic goals in place. However, if you're one of the millions who work remotely and independently, your success will rely on operational planning instead.

What are the key elements of an operational plan?

The success of operational planning largely depends on setting realistic expectations for all teams.

Here are the key elements of a functional operational plan:

• Clearly define the ultimate vision or objective for the plan
• Review and break down the smaller goals for the operating budget, team, and resources required to put the plan into action
• Assign budgets, team members, key stakeholders, and resources
• Monitor progress with consistent reports
• Refine the operational plan and be ready to pivot if needed

Ensure all teams understand the parameters of success. Doing this shows how their work contributes to wider company goals and ensures better decision-making for the business operation.

How to create an operational planning process

Think of an operational plan as a key component in a team puzzle. It provides employees with a manual on how to operate the company.

It should be created in tandem with other foundational documents like an organizational mission statement, vision document, or business strategy. Daily, it can help answer questions such as:

• Who should be working on what?
• How can we mitigate those risks?
• How will resources be assigned for different tasks?
• Are there any internal and external risks facing the business?

To create a successful operational plan, it's important to define goals clearly. Here are several steps that will help you develop a functional operating plan:

Start with the strategic plan

Before defining an operational goal, make sure your strategic objectives are in place and relevant.

Prioritize the most critical activities first

Once these goals have been decided on, prioritize the most critical activities required to achieve these aims.

Stop diluting team efforts and let them focus on the most important goals first. Doing this means everyone works on a smaller set of tasks, instead of spreading themselves thin in multiple areas. It also helps in optimizing available resources.

Use predictive indicators

For a robust operational plan, consider using key performance metrics or indicators that can help you determine project progress and lend visibility to team activities. 

While lagging indicators look backward, leading indicators look to the future. Think of the plan as a car — the rear-view mirror would be a lagging indicator, while the windshield would be the leading indicator.

A leading indicator could be a new product, higher customer satisfaction levels, or new markets. Examples of lagging indicators include the number of people who attended an event or the monthly operating expenses for specific departments. 

Instead of lagging indicators, use leading indicators. Lagging metrics will show that your efforts are falling short only after you execute the operations.

Leading KPIs include predictive measures that allow early identification of problems before they become critical and impact business performance negatively.

Get team buy-in

The key to defining appropriate KPIs is involving the whole team in the process. Meet to discuss the business goals and figure out what measurements are right for the team instead of working independently or outsourcing them.

Ensure consistent communication

Communication is key. By understanding your company's metrics and what they mean, you'll be able to work together more effectively with colleagues to reach common goals.

Operational plan example

Let’s say that a company plans to increase production volume by 50% at the end of a fiscal year.

When the company goal is clear, the team will make a strategic plan with three main components: marketing, sales, and operations.

This can be further broken down into an operational plan, which will assign resources, teams, budgets, and timelines for different departments such as manufacturing, sourcing, accounts, finance, and logistics to achieve the increase in production. Such a plan should include a financial summary and financial projections as well.

Operational plan template

Think about the example above. The goals and parties involved are clear as part of the operational plan. At the same time, to remain on track, the plan requires continuous analysis and reviews. An operational plan template can be extremely helpful to achieve that.

An operational template can be a simple document that is reused for different plans by the same organization. However, it is also possible and extremely helpful to make use of project management software tools to create one.

For instance, Gantt charts can serve exactly that purpose. Using a Gantt chart as an operational plan template, it is possible to create and manage plans, track changes and edit project-related activities in real time. The chart allows clear visibility for timelines, tasks, responsibilities, and team members.

Operational planning advantages and disadvantages

Most businesses utilize an operational plan to keep track of their daily tasks. 

The plan outlines the day-to-day activities for running the organization — teams, managers, and employees are then able to visualize their contribution, which is crucial for reaching company goals.

But every process has two sides. Let’s review the operational planning advantages and disadvantages in more detail.

Operational planning advantages

Clarifies organizational goals.

An operational plan helps managers and department heads define their daily tasks, responsibilities, and activities in detail.

It also illustrates how individual team members contribute to the overall company or department goals. Without a clearly defined plan, managers and employees have no way to measure their daily tasks against predefined outcomes.

Boosts team productivity

Business owners are always looking for ways to increase productivity, which in turn translates into higher profits. One of the best and easiest ways to boost efficiency is through an operational plan.

Employees are more productive when they know their daily objectives and responsibilities. Conversely, if they're unsure of what is required of them, chances are their productivity will suffer. 

An operational plan provides this vital information to employees in each department and across the company as a whole.

Enhance organizational profitability

Having a plan helps in keeping projects and teams on track.

When operations are managed properly, teams are able to consistently increase revenue and develop new products.

Innovation pays off. A BCG survey points out that 60% of companies that are committed to innovation report steadily increasing revenues year after year. With an operational plan in place, teams are able to innovate better and faster.

Improves competitive advantages

Competitive advantages are made up of multiple levels and components.

Coordinating the different parts with an operational plan will make your workflows run more smoothly. This allows you to deliver high-quality deliverables on time, creating an outstanding customer experience and keeping you ahead of the competition.

Operational planning disadvantages

Possibility of human error.

Human error is a common problem in manufacturing that can often occur when transitioning from production to sale.

Operations management teams will need to coordinate effectively with diverse cross-functional teams such as finance, accounting, engineering, and human resources. In doing so, each team will have a clear understanding of the end goals of each department.

Interdependency amongst parts

One of the main disadvantages of implementing an operations planning process is that its success depends on coordination across parts.

Plans end up failing due to one part not working, which can have an adverse impact on the subsequent process. Disruptions in one process can end up affecting the entire process, making the entire operational plan useless.

Using Wrike for operational planning

Boost your organization’s efficiency by ensuring every project starts off on the right foot. Wrike’s award-winning project management tools can help you create and execute operational plans with various prebuilt templates . 

Establish your plan, monitor progress, and be prepared to pivot if necessary. With Wrike, you can share real-time data, making all milestones crystal clear for your team and helping them stay updated and on track.

These templates keep processes running smoothly so you can focus on doing your work well. Want to try them out? They’re just a click away.  

Choose the most suitable template and start a free two-week trial of Wrike today!

Yuvika Iyer

Yuvika is a freelance writer who specializes in recruitment and resume writing.

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Work Skills You Need on Your Resume in 2021

Navigating the highly competitive job market can be brutal. In a recent Jobvite survey, nearly three in four respondents said they believe finding a job has become much harder following the pandemic.  It’s clearer now more than ever how important it is for your resume to stand out. In fact, nearly 24% of hiring managers spend 30 seconds or less reviewing a resume to determine whether a candidate is qualified for a position or not. You quite literally have seconds to catch their attention before your resume ends up in the recycling bin with the rest of the candidates that didn’t make the cut. So, how exactly do you set yourself apart and stand out from the crowd? Highlighting your work skills on your resume is the best place to start. We did some digging and pulled together some work skills examples in various categories to inspire you to revitalize your resume.  Important social work skills for the workplace What are social work skills? Social skills, otherwise known as interpersonal skills, are essential in helping us communicate with one another in the workplace. These skills allow us to build relationships, interact, and communicate with those around us in a meaningful and effective way. This includes verbal and nonverbal cues.  Social work skills are essential in every job. Whether you work on a team, are in a client-facing role, or are an individual contributor reporting to a direct manager, solid social skills will help you succeed in your position.  Let’s take a look at some of the most important social work skills for the workplace:  1. Empathy One of the best ways to interact well with others is to put yourself in their shoes and understand how they feel. Empathetic people can understand how others are feeling and can identify with those feelings in some way.  Having empathy is a vital trait, especially for those who hold leadership positions. Being empathetic isn’t something you can force, and it doesn’t happen overnight if it doesn’t come naturally to you. This skill takes a conscious effort to build and will help you forge and maintain stronger workplace relationships. 2. Active listening Have you ever been in the middle of a conversation with a colleague and felt like they weren’t paying attention to a single word you were saying? Or have you ever been chatting with a coworker and felt like they heard you and gave you their utmost attention? The latter is known as active listening.  Active listening involves giving someone your full, undivided attention and it allows you to build trust and strong relationships with your colleagues and clients. Active listening requires practice, but it is a skill that can be acquired with proper training and effort. 3. Emotional intelligence At a high level, emotional intelligence refers to recognizing and being aware of the emotions of both yourself and other people. Those with high emotional intelligence are known for being self-aware and can practice self-regulation, particularly in stressful and potentially overwhelming situations at work. Emotional intelligence is critical in the workplace because it contributes to strong, long-term relationships and can help you manage and appropriately tailor your reactions.  4. Conflict resolution According to recent research, 65% of workers experienced conflict with another coworker. Conflict is inevitable in the workplace, which means developing a solid set of conflict resolution skills can help you manage and navigate these situations efficiently.  Conflict resolution is the ability to address the root cause of disagreements and devise a solution that works for all parties involved. You can use various techniques to help resolve conflicts, so it’s essential to learn and understand how to address different disputes. 5. Written communication Social skills refer to how we communicate with one another, which means written skills are a must. Some forms of written communication include emails, instant messages, documents, reports, slide decks, and your resume. Using appropriate grammar, proper spelling, and following formatting guidelines will allow you to communicate effectively with others. 6. Nonverbal communication When it comes to communication, it’s easy to think about what we are saying, but we don’t always focus on how we are saying it. Nonverbal skills can dramatically impact the way your message is received.  Your body language, eye contact, facial expressions, and tone can completely change the message you are trying to deliver to your coworkers. It’s important to be aware of these subtle cues so that you can make sure your message isn’t misconstrued or misinterpreted.  Work-related skills for virtual environments You might not be working with your colleagues side-by-side in the same office. In addition to the skills we discussed above, remote work requires some different skills and disciplines.  Below are a few competencies that you’ll definitely want to have when collaborating in virtual work environments:  Self-motivation: There’s a big difference between in-person office environments and virtual workplace settings. At the office, your manager can simply stop by your desk or quickly check in to see how things are going. While your supervisor can technically do the same via email or instant message, you ultimately don’t have anyone looking over your shoulder 24/7 at your home office (unless you have pets, children, or spouses nearby!). That means self-motivation and knowing how to hold yourself accountable to get your work done are vital to helping you thrive in a virtual role. Adaptability: Adaptability is beneficial in any setting, but it’s a particularly beneficial skill in virtual environments. Whether you’re working with a distributed team and constantly trying to navigate time zones or your presentation gets interrupted due to an unreliable internet connection, adaptability is an important skill to help you navigate the unexpected and ever-changing conditions you may find yourself running up against. Digital and technical knowledge: In virtual environments, employees work remotely and generally rely on several tools to collaborate and tackle their to-do lists. Between project management software, instant messaging, video conferencing, document sharing, and email, there are many different technologies to navigate daily. If you’re working in a virtual environment, it’s essential to feel comfortable using these platforms if you want to keep up with the pace of your work. It’s also worth mentioning that, while you still may be able to reach the IT help desk, you may not receive assistance as quickly as you would in an office setting. That means you might have to do some troubleshooting and problem-solving on your own. What teamwork skills are important for 2021? Teamwork makes the dream work, right?  Teamwork skills are a subset of skills that enable us to work well with groups of people (meaning, our teams) to achieve a shared goal or outcome. In 2021 and beyond, as we see a shift toward hybrid work models, honing in on your teamwork skills can help you land your dream gig. Here are the teamwork skills that are important to develop for 2021 and beyond: 1. Reliability Being reliable is arguably the most crucial teamwork skill. Those who are reliable can be depended on and trusted to do their part time and time again. They show a certain level of commitment to their work and colleagues, meet deadlines (or even get work in early), and follow through on any action or task they say they will do.  You want to be a reliable teammate so your colleagues and your employer will have faith in you. And the more trustworthy you are, the more responsibility you will be trusted with over time, which may boost your career growth in the long run. It’s even more important to showcase your reliability in a virtual workplace environment through clear and frequent communication. 2. Accountability Accountability goes hand-in-hand with reliability. But beyond being reliable, accountability is all about taking responsibility for one’s work — even when that includes mistakes or failures.  There’s no room for the blame game or pointing fingers on teams that work well with one another, which means you have to hold yourself accountable and take fault when necessary. Your teammates will likely think more of you if you’re willing to admit you’re wrong, as opposed to constantly shifting blame or pointing fingers when issues arise. 3. Respectfulness A little bit of respect goes a long way, especially at work. According to Indeed, respectfulness in the workplace reduces stress, increases productivity and collaboration, improves employee satisfaction, and creates a fair environment. You need to respect your team members, manager, and clients to do your best work together.  Acts of respect include acknowledging others and calling them by name, encouraging and exchanging opinions and ideas without judgment, giving credit where it’s due, and listening to and understanding your teammates. 4. Collaboration There is no successful teamwork without collaboration. Collaboration is working together with one or more people on a project or toward a shared goal.  When employees can work together and collaborate successfully, they can share ideas and come up with practical solutions to complex problems. Brainstorming, open discussions, workshops, and knowledge sharing sessions are all examples of collaboration that lead to great teamwork.  5. Persuasion Have you ever worked with a teammate who insists on working their way, even if the rest of the team agrees to pursue another route? How do you keep making progress on your project or goal if one team member isn’t on the same page? That’s where your skills of persuasion come in handy.  Sometimes you might have to persuade a team member to see another point of view and change their mind to benefit the rest of the group. But persuasive skills are more than just getting someone to change their mind and see your perspective — it’s about doing so in an empathetic and respectful way in order to maintain a healthy working relationship. 6. Constructive feedback for improvement You should be able to offer your teammate constructive feedback to help them improve and vice versa. Exchanging feedback not only benefits individuals and the team as a whole but also adds value to your organization by creating an opportunity for constant growth.  Giving feedback requires offering suggestions for improvement in a positive way, while receiving feedback requires listening with an open mind and a willingness to change.  Work skills that work on any resume Sure, there are specialized skills for different roles and industries. Engineers add their programming skills to their resume, project managers add project management certifications and relevant skills, and HR professionals add the performance management and HRIS systems they’ve previously used. While there are specialized skills you’ll want to emphasize on your resume based on your industry and role (and trust us, those are important), there are also some work skills that are relevant on any resume. These include:  Creativity: Creativity is an essential component of innovation and complex problem-solving. In its most basic form, creativity requires thinking about a problem or task differently and using your imagination to form and test new ideas. Problem-solving: All employers value problem-solving abilities because they want to hire people who can break down problems and develop effective solutions. To showcase your problem-solving skills, you might possess a range of qualities such as analysis, evaluation, decision-making, and communication. Time management: No employer wants to hire someone who doesn’t make good use of their time and will have a hard time getting their work done. Your future employer wants to know that you’ll be able to meet deadlines, effectively use your workday to get tasks accomplished, and handle your workload without a lot of babysitting. Examples of specific time management responsibilities include goal setting, prioritizing tasks, meeting deadlines, and minimizing or eliminating distractions for optimal focus. Leadership: Showcasing how you’ve demonstrated leadership in your previous roles can demonstrate to your future potential employer what type of employee you are. Being an effective leader can increase your advancement opportunities within your organization. Use specific examples of successful leadership on your resume for the most significant impact.  So how do you showcase these skills on your resume? Now that you know what work skills for resumes employers want to see, you’re bound to have this question: Where do you put them? Keep in mind that the goal of your resume is to prove that you’re a qualified, no-brainer fit for the role you’re applying for. That’s why your smartest move is to tailor your resume to a specific job. Take a fine-tooth comb to the job description and identify words or skills that are repeated or emphasized. Those are traits that you should be incorporating in your own resume (provided you honestly possess them, of course). The most important skills should go as close to the top of your document as possible, because remember, hiring managers are only skimming for a few seconds. As for where you can work these skills in, you have a number of options, including:  Your professional summary at the top of your document A dedicated key skills section where you can bullet out your most relevant abilities Your past positions, where you can demonstrate how you applied your skills in previous jobs Finally, remember that many of your work skills and social work skills — from communication and time management to problem-solving and active listening — will be on display throughout the hiring process and your interviews.  So, it should go without saying, but show up on time, respond to messages promptly and respectfully, and treat everybody respectfully. After all, when it comes to your work skills, employers want you to show — and not just tell.

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Operations Management: Processes & Best Practices

Operations management influences every part of how you run a company. That includes how you produce a product or service, how you track and improve your efficiency and how you contribute to the bottom line. Simply put, operations management drives efficient workforces, processes and supply chains.

This guide explores the types of operations management and how they bring value to a business. Explore the ins and outs of operations management strategy and learn the best practices to achieve success.

Inside this article:

• Types of operations management

Operations and Supply Chain Management (OSCM)

• Operations management process
• Best practices for operations management

What Is Operations Management?

Operations management is the practice of handling day-to-day business functions in a manner that is efficient and that maximizes profitability. This discipline focuses on formulating strategies and taking actions to optimize production and supply chain performance.

Key Takeaways

• Operations management focuses on multiple aspects of an organization’s day-to-day operations, not just resolving the inevitable one-off problems that arise.
• Without operations management, critical business functions like R&D, client service delivery, information technology and inventory control are prone to mismanagement and underfunding.
• Behind most successful supply chains is solid operations management because it provides managers the means to direct resources toward desired results.

What Is the Purpose of Operations Management?

The purpose of operations management is to promote and support efficient business processes. The practice focuses on the staff, processes and physical resources required to operate a business.

Operations management also refers to how an organization coordinates and oversees the flow of information among its departments; how successful it is at complying with business and regulatory requirements; how well it ensures customer satisfaction; and how efficiently it manages daily operations, not just resolving problems that occasionally arise.

Goals of Operation Management

The goals of operations management are about maximizing the organization’s efforts, mainly around producing goods and/or services and managing the supply chain and infrastructure. The focus is on controlling costs, maximizing profitability and properly allocating resources.

Operations managers seek to reduce operating costs by coordinating business tasks, ensuring qualified people are in the right positions and continuously monitoring performance metrics.

Importance of Operations Management

An effective operations management practice makes a business more competitive and prevents it from wasting time and money on activities that don’t forward the company’s strategic vision. An effective operations manager ensures the organization meets business goals.

Operations management is necessary for companies to stay competitive in any industry, but healthcare, technology and manufacturing firms often have a particular focus. Without efficient operations management, critical business functions like research, client service delivery, IT and inventory control may fall prey to mismanagement.

Types of Operations Management

The three main types of operations management focus on the objective , the task or the individual employee . Which you use depends on your company’s needs and goals, and a manager might use different types based on the situation.

Objectives management:

Setting priorities, making operational decisions based on business goals and aligning operations to support overall company objectives.

Task management:

Managing daily operations based on work in progress and linear workflows to assign tasks before moving to the next phase.

Individual supervision:

Using real-time information from managers and employees on the ground performing the work to optimize operations.

Some facets of operations management may require additional functions. For example, tasks may consist of planning and researching; creating operational budgets; and managing physical inventory, supply chains and vendors.

In addition to the types of business functions, there are three categories of modern operations management environments:

Centralized:

Shops with centralized operations management typically use one central control system to manage essential supply chain functions and oversee multiple employees who work in one location.

Decentralized:

Decentralized operations management uses multiple systems, including advanced infrastructure and technology like web applications and cloud databases, to coordinate work across global supply chains and multiple locations.

A hybrid operations management environment leverages the advantages of centralized and decentralized operations. For example, you might have a centralized production center with unified manufacturing and warehousing capabilities and equipped with an automated infrastructure connected to cloud-based networks for real-time monitoring.

Operations Management Eco-System

Strategic vs. Tactical Operations Management Decisions

Strategic operations management focuses on long-term success, while tactical operations decisions are about reacting and adjusting in the short term. Use a combination of these approaches for the best results.

Strategic operations decisions involve estimates, predictions, goals and comparative analyses. This approach concentrates on the future to meet long-term objectives and ensure lasting success. One key aspect is using operational data to analyze results and adjust long-term strategic plans where necessary.

Tactical operations decisions, on the other hand, involve how the company responds to changing operational conditions. For example, an organization might need to adjust production schedules or workforce planning as the marketplace fluctuates.

Operations management is vital for any company that relies on logistics management and the supply chain. The practice protects supply chain operations, boosts productivity and reduces costs.

Operations management is critical in companies that have complex supply chains because it provides a framework for process-specific technology, tools and activities to support a steady flow of materials and finished goods and gives managers the means to efficiently direct resources toward reaching goals. Operations managers rely on strong logistics management and supply chain management .

A mature operations management practice helps create processes and systems to manage and measure supply chain activities. For example, when customers cancel orders or return goods to the warehouse, the operations management team is responsible for having procedures in place to reduce administrative overhead, adjust production levels and/or maximize the resale value of the items.

Effective operations management touches all aspects of essential work, including supply chain, and ensures the company is meeting key performance indicators (KPIs) . Managers use operations management KPIs to make informed decisions and coordinate efforts across the supply chain and organization as a whole.

What Are the Main Functions of Operations Management?

The main functions of operations management are developing effective processes, ensuring production is efficient and determining the most cost-effective way to achieve goals. Operations managers help organize resources using sound HR concepts, the right technology and up-to-date best practices.

Functions often are cross-departmental and include:

• Process analysis
• Financial oversight
• Risk management
• Data privacy and security
• Quality assurance
• Preparing and disseminating reports
• Scheduling staff
• Providing technical support
• Managing equipment and supplies
• Controlling inventory
• Overseeing external vendors

Operations Management Process

The operations management process is about making a company’s daily actions as sharp and effective as possible. The process involves smart use of resources and data to reach goals while keeping costs down.

Operations management also refers to the processes, tools and resources necessary to support an organization’s full workflow. It requires communication with clients, stakeholders and business units.

Three categories of operations management processes, based on desired business outcome, include:

Implementation:

Designing and engineering infrastructure and systems so your business operations function efficiently.

Optimization:

Ensuring that your staff and infrastructure serve the business’s goals as effectively and efficiently as possible.

Improvement:

Introducing operational methods that previously did not apply — for example, remote work — and maximizing the efficiency and effectiveness of existing processes.

The ideal operations management process for a given company varies by industry, company size and other factors. Generally, it captures the process of managing the daily flow of tasks and information to ensure consistent and effective performance across projects. This process can include variables such as finance, human resources, information technology, facilities management, inventory management and more.

Role of Operations Management

The role of operations management boils down to driving optimal results while reducing costs. An effective operations manager allocates a company’s resources to achieve goals and meet standards.

Most companies have an operations department for this reason, although the specific role may vary from company to company and industry to industry. The responsibilities of an operations manager include the overall direction of company operations, financial planning and resource allocation for specific projects and service offerings.

In general, ops managers direct their companies’ day-to-day business activities. They ensure that the workforce conducts daily operations following company policies and standards and relevant laws and regulations. Their key responsibilities include overseeing daily business activities, studying processes and preparing operational and financial reports.

In addition, these managers measure the impact of business operations by collecting, processing and communicating operational KPIs .

Effective operations management requires a holistic view of the business, including resource allocation, documentation review, quality control, coordination of efforts, sharing information across departments and initiating appropriate actions when needed. Typically, operations managers have a cross-departmental view, carry out duties assigned by leaders, ensure the efficient use of resources and help plan and prepare to achieve future goals. Day-to-day operational management tasks include record-keeping and operational reporting .

Depending on company size and scope, ops managers may take on business development or marketing roles. For example, ops management teams may include financial analysts, sales leaders, software developers and IT support. The practice typically includes cross-functional coordination among department heads and units.

Operations Management Example

To understand operations management, consider these examples. The first is a manager who oversees a company’s production, workflow, inventory, equipment and people. Another one in is a manager overseeing a service, such as IT.

The field has evolved to include service-related tasks involved in making efficient, value-driven operational decisions. For example, IT operations management includes maintaining the hardware and software to enable IT strategy, planning, decision-making, research and technical support.

Operations workflows in IT ops management include the techniques that support the organization’s efficient and safe use of technology resources and deal with the design, implementation, administration, monitoring and performance of security measures in information systems. Those tasks protect the integrity, confidentiality and availability of data. This role requires a comprehensive knowledge of IT security policies and operational awareness combined with proactive thinking and problem-solving skills.

Best Practices for Operations Management

Operations management best practices start with modern methods that allow employees to do their jobs efficiently and deliver a desirable product or service to customers. However, best practices may vary by company and need to evolve in tandem with changing priorities.

While there is no single path to efficient operations, organizations and individuals have found effective ways to improve modern operations management. These include:

Use technology to gain efficiency.

As workforce automation eliminates more and more routine business processes, modern operations managers optimize operational capabilities using data-led design and engineering.

Turn to data for decision-making.

Modern ops management strategies focus on making sound business decisions based on data-driven analysis rather than relying solely on past results, employee and customer behavior and personal biases.

Use operations management for business processes.

Use operations management methods for business process redesign (BPR) and business process automation (BPA) projects.

BPR for ops management refers to overhauling your critical business processes using information and data gleaned from operations management performance metrics. BPR can improve return on investment, reduce operational costs, increase production capacity and enhance service capabilities.

BPA for ops management refers to using technology to assist with or replace manual tasks and processes. BPA can increase efficiency, save time and money, reduce errors and increase transparency. Automating ops management is most effective when replacing tasks that involve inefficient use of time and resources.

Challenges in Operations Management

Operation management challenges include decision-making, resource allocation and time management; the goal is to ensure objectives are met on time and within budget.

Common operation management challenges include:

Business dynamics:

Operations managers juggle multiple business functions and make decisions that touch other departments in areas such as product development, customer support and finance.

Global ops:

Global supply chains challenge operations management to stay current with global market trends and find operational efficiencies across international operating environments.

Advanced technology:

Advances in technology continue to increase the technical complexity of this discipline. Today, ops managers require significant technical proficiency and information management expertise.

Time management:

Operations management problems arise from many places, but the most frequent challenge is inefficient time allocation caused by factors such as labor shortages.

Sustainability:

Evolving regulations and resource shortages challenge operations managers to find sustainable business practice efficiencies that account for future operating environments.

Operations management is partly responsible for shaping the organizational policies and practices essential for safe, efficient and secure departmental functions. It involves planning, controlling, supervising and controlling the work of assigned employees necessary to accomplish set goals and objectives.

An operations manager has two primary purposes: Manage operational resources and meet the organization’s goals and objectives. Understanding common operations issues allow ops managers to prevent or eliminate operational inefficiencies that affect an organization's ability to perform its core functions efficiently.

Human Behavior and Operations Management

The field of behavioral operations management examines the decision-making role. This is key because human beings don’t always base their decisions on logic and factual information.

Many organizations are undergoing a transformation — from being purpose-built for one market to being massively complex with dozens of functions. As a result, operations management techniques must become more agile and cross-functional. Unfortunately, small to midsize businesses may lack cross-functional leadership and accountability in operations management. When leadership is lacking, inefficiencies and behavioral issues can grow and spread throughout an organization.

Research in this field from the Journal of Operations Management focuses on understanding human behavior to improve operations management and realize its benefits. For example, risk aversion is a behavioral issue that research shows can hinder ops management. This issue manifests in many forms and can also harm performance.

An Example of How Technology Fuels Operations Management

The family-owned, online furniture company casalife needed an integrated business solution to become more efficient to stay competitive with larger online retailers. The small retailer couldn’t afford the high up-front IT investment and maintenance costs associated with typical on-premises solutions.

With NetSuite’s SuiteCommerce solution, casalife was able to meet the demands of its ecommerce operations and become more agile and able to take on growth opportunities. The result was an estimated savings of $120,000 a year in personnel and other costs using NetSuite for purchasing, operations management and CRM compared to the competing solution.

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Redefine your operations workflows and more effectively monitor manufacturing processes by integrating industrial monitoring devices and software with NetSuite’s Advanced Manufacturing solution . NetSuite eliminates the gap between operational intelligence and business outcomes with real-time visibility and reporting and customizable operations dashboards that bring clarity and context to ops management.

Gain a more cohesive picture of your manufacturing operations and empower quicker response times to ensure optimal production. The system’s built-in business intelligence toolkit helps you create more informed strategic decisions through real-time analysis of supply chain data that drives system improvement. Empower your ops managers, put ops data into action, and get products to market faster and more efficiently with unified global manufacturing management (opens in new tab) in the cloud.

Operations Management FAQs

What does operations management do?

Operations management oversees daily business activities to ensure efficiency and profitability. It focuses on optimizing production, improving processes, and managing supply chains.

What is the role of operations manager?

An operations manager directs daily business activities, allocates resources, ensures compliance with policies, and strives to achieve organizational goals efficiently.

Operational Reporting: Types, Examples and Best Practices

Learn how leaders use operational reports to gather, process, and share data to make fast daily decisions. Plus, examples and best practices.…

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Methods & Techniques Used in Operational Management

by Emily Hunsaker

Published on 10 Dec 2018

Operational management refers to the ways in which a business manages the resources responsible for creating goods or services including materials, machines, people and technology. The discipline is rooted in the planning and creating processes that make the business run more efficiently by focusing on factors such as cost control, quality assurance and profitability. In the field of operational management, managers and business owners must continually improve these processes to remain competitive.

While the principles discussed in the field of operational management typically refer to large corporations, small business owners can also benefit from creating operational structures. Operational management techniques can give small business owners the chance to decrease costs, increase customer satisfaction, boost revenue and improve the overall operation of the company by putting processes in place for future production.

Designing Processes

The foundation of operational management revolves around putting a set of processes in place to ultimately improve your business’s bottom line. A process is an automatic system that a business uses to address a specific problem. Processes offer small businesses a host of benefits including saving time, eliminating problems and improving productivity.

While some processes are instinctively created, others require more planning to implement. To develop processes in your business, you must first identify issues that happen regularly and take up a lot of your employees’ time or issues that frustrate you. Then, create a well-defined plan to alleviate the issue at hand. Finally, execute your plan over and over again until it becomes routine.

Project Management

Successful operational management includes the use of project management techniques. Business owners must continually make decisions regarding scheduling, work assignments and sequencing of various projects or processes in the short-and-long-term confines of the business. Small businesses can make use of a variety of project management tools or software to simplify the task of managing projects.

When managing various projects within your business, there are four factors to consider: schedule, financing, controls and evaluation. Each project completed in a business must be finished in a limited time frame. Effective project management means ensuring that each individual component of the project is completed in a timely manner so the project as a whole remains on schedule. Additionally, a project’s manager must also track project costs using cost functions or a traditional budget. To ensure your project stays on track and on-budget, controls are a necessity. Consider controls that place a limit on spending among individual team members or setting milestones as deadlines for each component of the project. And as the project wraps up, it is important to evaluate the project as a whole and the controls within it to determine what aspects were a success and areas where the team can improve.

Continuous Improvement

The best organizational managers are never satisfied with their results. Instead, they always seek to improve upon what they have done. The concept of continuous improvement is based on a Japanese philosophy called Kaizen, which involves identifying benchmarks and allowing your employees to take ownership of their improvements. A business’s processes can always be improved upon, whether you seek to save additional time or increase revenue.

Long-term planning requires that you build upon the improvements achieved through your operational management strategies. To create an environment of continuous improvement in your business, instill a sense of employee involvement in all business processes, emphasize the importance of teamwork throughout each process and encourage employees to develop a sense of ownership of the business’s processes.

Operational Planning: Meaning, Examples And Benefits

Adil holds a managerial position at an organization that manufactures railway wagons and is looking to increase production and revenue…

Adil holds a managerial position at an organization that manufactures railway wagons and is looking to increase production and revenue by 50% over the next five years. Adil and his team are tasked with creating a plan that includes marketing, sales and operations goals. He understands that the operations section of the plan will involve several components, including manufacturing, procurement, warehousing and transportation.

Adil has a clear strategy for the operational planning segment. He entrusts Shalini with opening up two more production lines at the company’s Chennai facility to increase production. He puts Harsh on building a new factory at Ranipet, Tamil Nadu, with a total capacity of making 50 passenger cars every month to support production increases over the next five years. Saba is given the responsibility of diversifying the supply chain to ensure all materials are procured from no less than three vendors. Roshan is tasked with increasing warehouse space to accommodate supplies and product output from the new production lines. Finally, Heena is entrusted with expanding transportation partnerships to fulfill the goal of increasing shipping volumes.

Owing to Adil’s meticulous operational planning and his team’s efficient execution, the firm is able to increase its production and revenue according to its goals significantly.

What Is Operational Planning?

Examples of operational planning in management, benefits of operational planning.

Before we delve any deeper into the subject, it’s important to understand the meaning of operational planning and what it involves.  Operational planning is a method a department or team uses to take the company’s strategic plan and turn it into a detailed map broken up into various components. This map, called the operational plan, documents the team’s exact steps within specified time periods to reach each goal. Such a plan is made with a focus on the future to outline budget allocations, departmental activities and targets for the next year to three years. The operational planning meaning becomes clearer when we understand that the operations segment is but one component of a larger strategic plan. Adil was well aware of this as he has years’ worth of experience in operational planning in management .

In operational planning , it’s essential to record each team member’s responsibilities for the fiscal year in detail. How detailed the plan is will depend upon the projected timeline for goal completion and how fast the team works. For businesses that need to hit their targets quickly, the plan should be designed for a six-month timeline. For long-term goals, operational planning should be done for the whole fiscal year.

Now that we’ve covered the meaning of operational planning , let’s look at some examples of operational planning in management and what they entail.

Organizations can’t function without operations. Let’s explore some examples of operational planning which many companies are incorporating into their business models.

Production Planning

This type of operational planning in management is geared towards mapping a business’s output. Here the focus is primarily on using labor and capital intelligently to make products that can be sold profitably. Take, for instance, a frozen yogurt manufacturer that creates 10 different flavors within just one facility. Operational planning here will involve organizing supplies and streamlining production lines, work shifts and warehouse space to maintain manageable overhead costs.

Capability Planning

Operational planning is required to identify the purpose of a business and then create a roadmap for building on its capabilities. For example, a private taxi company evaluating its own business capabilities will devise a plan to maintain its fleet better and upgrade operations to enhance the safety of women passengers.

Sales Planning

Operational planning is crucial for matching sales targets with production capabilities. For instance, if a makeup brand wants to run a promotional campaign that could grow sales by 150%, only tight operational planning will be able to determine whether the company’s factories can boost production to such a degree.

Going over a few key examples of operational planning in management would be helpful to examine how the process actually helps. Let’s look at a few benefits of operational planning .

Without operational planning in management , businesses would run inefficiently and incur losses. Planned operations are a company’s lifeblood. Here are some key benefits of operational planning .

Provides Clarity

Among other things, operational planning ensures everyone on the team has a clear idea about the work to be done on a monthly, weekly and even daily basis. This helps maintain focus and increase efficiency.

Provides A Roadmap

Achieving long-term goals becomes much easier with operational planning . Productivity increases when team members have a detailed plan to follow; this also helps maintain accountability.

Reduces Delay

With a clearly charted-out path, employees know how much ground they have to cover by the end of each day. This helps them manage their time better and stay on schedule, thereby producing quality and timely work.

Good operational planning benefits organizations greatly. Harappa’s Rise In An Organization program is designed to help ambitious professionals become ace planners of operations. Under the guidance of a stellar faculty that takes you through 17 in-depth lessons, you’ll learn to inspire trust, lead with influence and become a reliable team player who gets things done. With the help of frameworks such as The Trust Equation and The Flywheel Effect, you’ll develop skills that equip you to manage projects expertly, adapt to situations instinctively and foster trust.

The Rise In An Organization pathway is the ticket to masterfully influencing decisions and outcomes and facing challenges head-on!

10 min read

Improving a business is about more than just increasing efficiencies or maximizing ROI. Today’s global economy also requires the flexibility to adjust to changing markets, conditions and technologies. Operational excellence is a way for organizations to create a roadmap toward continuous improvement in a complex business environment.

Its goal is to give companies a competitive advantage. If done right, operational excellence helps business leaders make better decisions and employees show continuous improvement. Companies that are better at problem-solving and process improvement, the theory goes, will ultimately exceed their competition in profitability.

Here, we’ll explore the core principles of operational excellence and how companies are using technology to implement these methodologies.

Operational excellence (OpEx) is an approach to business management that emphasizes continuous improvement across all aspects of the business and within all business processes by creating a culture where management and employees are invested in business outcomes and empowered to implement change. When implemented well, every member of an organization sees the flow of value to the customer and, if problems arise, finds a solution before any disruptions occur.

Operational excellence begins with a culture shift, where all leaders and employees are dedicated to creating not only a quality product but also providing great customer experiences. Businesses that use operational excellence methodologies clearly define leadership and workforce roles and how they work together to improve operations. At all levels, employees can initiate change and drive toward efficiency, effectiveness and agility.

The definition of operational excellence has its roots in the Shingo Model, an approach to business that emphasizes quality at the source, value to the customers, a zero-inventory  supply chain  and an understanding of the workplace at all levels. It was created by Dr. Shigeo Shingo, a business leader who published 18 books on his philosophy and closely collaborated with Toyota executives to apply his principles in their manufacturing operations.

Shingo is also the inspiration for the Shingo Prize, awarded annually by the Shingo Institute for Operational Excellence at Utah State University. This prize defines the 10 Shingo Guiding Principles, often referred to as the core principles of operational excellence:

• Respect every individual:  When people feel respected and valued by an organization, they are more likely to give more. Respect seeks to draw the best from individual contributors.
• Lead with humility:  When decisions are made unilaterally, frontline employees are less likely to respect the decisions being made. To lead with humility, companies must implement a management system where leaders seek input and buy-in from stakeholders at all levels.
• Seek perfection:  This principle is similar to the adage, “You have to believe it to achieve it.” By seeking ways to continuously improve, you can open the door to new ways of thinking and innovation.
• Embrace scientific thinking:  This principle is not just about being data-driven. Creating a culture where employees are able to “experiment” and test new ideas based on observations and data fosters innovation.
• Focus on process:  If something goes wrong, instead of blaming people (which can be counterproductive), look for ways the process can be improved.
• Assure quality at the source:  Much like good food is made with good ingredients, assuring quality in business relies on doing work right the first time, using the right people and the right components.
• Improve flow and pull:  Providing value to the customer means having the products that they demand when they need them and nothing more, which is exemplified in lean supply chains.
• Think systemically:  Instead of focusing on individual players or departments for improvement, think of ways to improve the entire system.
• Create constancy of purpose:  Communication of goals, purpose, commitment to the customer and the “why” behind the company are key to operational excellence.
• Create value for the customer:  Ultimately, all businesses are all about the customer, so operations should reflect the value customers hold and should be provided.

As the Shingo Model gained popularity within the business world, others developed methodologies based on this approach and the core principles of operational excellence. These include:

• Lean manufacturing:  Lean manufacturing is a systematic method designed to minimize waste while keeping productivity constant.
• Six Sigma:  Six Sigma is a set of methodologies, tools and techniques used to improve processes and minimize defects. It’s sometimes combined with lean manufacturing principles and then known as “lean Six Sigma.”
• Kaizen:  Focused on continuous improvement, Kaizen emphasizes teamwork and proactively taking responsibility for designated areas within the organization to make incremental improvements.

When implementing operational excellence within an organization, it can be helpful to view the process as an ongoing journey rather than a final destination. Because the focus is on continuous improvement, business leaders and employees should always strive for ways to get better at what they do.

That being said, organizations need to establish goals and define metrics to understand if and how they are improving. These metrics include key performance indicators (KPIs), such as sales increases, health and safety performance and workforce retention rates.

Here are the types of goals that are often included in operational excellence-based processes:

• Operational goals:  How the company operates, including efficiency and safety. For example, an organization might seek to accelerate order to cash, solve problems with the supply chain or improve the delivery of services.
• Financial goals:  Metrics related to sales and losses. These goals could be to lower churn, efficiently enter new markets or improve the marketing-to-sales pipeline.
• Culture and workforce goals:  These include measuring worker satisfaction, offering professional development and investing in worker retention. This could entail initiatives to create a more inclusive culture, creating a more equitable compensation package or incentivizing professional development.

Value flow to customers

Operational excellence goals are typically focused on delivering value to the customer. What is value? Essentially, it’s what the customer demands and is willing to pay for.

Within the operational excellence methodology, companies provide this value by creating value streams. A value stream refers to the processes and initiatives that an organization creates to deliver the products and services the customers’ need in the time it takes to meet that demand.

For example, a  data center  that can keep up with customer demand and has the compute, storage and networking resources needed to service online transactions without overprovisioning is seen as a value stream that is running smoothly.

Communicating operational excellence

Communication is another key element for reaching operational excellence goals. If employees aren’t aware of company goals, have no idea how to deliver value to the customer or feel leadership is not invested in their professional success, it makes it difficult to achieve goals and continuously improve.

Implementation often includes a plan for communicating all aspects of the program, such as the mission, goals and those impacted to all employees. Companies that excel in operational excellence often have a well-designed internal communication system, as well as a forum for receiving and addressing feedback.

Operational excellence requires organizations to look critically at their operations and how they manage employees. In some cases, they must be willing to shift their culture. Being open to continuous change helps companies better implement methodologies and reach these benefits:

• Optimized workflows:  Part of creating an unhindered flow of value to the customer is being able to see and address roadblocks, supply chain issues and misaligned priorities. When using business management tools, companies can gain visibility into  workflows  and business processes to make them more efficient. For example, with better workflow modeling, they can get to the root cause of bottlenecks and redundancies and eliminate overproduction or waste.
• Lower operational risk:  Reducing risk is a primary goal of any business strategy, and a primary benefit of operational excellence. With the efficiencies that it brings, companies can also lower operating costs and increase revenues, especially when compared to competitors.
• Standardized work and outcomes:  Having standards of how work should be done and what the end product looks like improves efficiency and overall business outcomes.
• Accountability:  Defining roles and providing performance evaluations at all levels ensures that people have clear expectations.
• Employee empowerment:  Instead of a “top-down” culture where the CEO has a hand in business decisions throughout all departments, operational excellence strives to create a model where leadership makes strategic decisions and empowers frontline employees with the resources and decision-making abilities they need to succeed.

Operational excellence can benefit just about every industry and business model, however, there are some industries where operational excellence has become a standard in operations: 

• Manufacturing:  Companies like Motorola and BAE Systems have employed operational excellence methodologies to enhance productivity, decrease downtime and cut out waste.
• IT:  Using the core principles of operational excellence gives IT teams a way to minimize development rework and improve workflow efficiency in a fast-paced environment.
• Healthcare:  With a focus on customer experience, operational excellence helps healthcare providers reduce wait times, improve patient portals and better track patient outcomes.
• Construction:  Using operational excellence helps construction companies ensure worker safety, efficient workforce management and cost-effective sourcing of materials.

Automation, process analysis, observability and data and business management tools can help companies more quickly implement—and stick with—continuous improvement.

Business automation

Companies have been looking to automation for decades to create efficiencies and harness the power of digital technology. This could include automating hands-on tasks on the assembly line with machinery or  automating back-office tasks  like accounting and billing with software solutions.

There are many tasks that require creative thinking, intuition and strategy planning that only people can perform. However, automation tools can be used to perform the repetitive and mundane tasks, such as prepopulating invoices with account information and transferring data to multiple back-end systems that can save people time:

• Business process management software:  The business process management approach is iterative; you don’t implement it once, never to be touched again. Instead, you design, model, create, simulate, monitor and optimize your processes on a regular basis.  Business process management tools  help companies maintain this iterative process to create, analyze and improve business processes for continuous improvement.
• Process modeling:  A key concept in operational excellence is identifying abnormal flow—where the process has broken down—and figure out how to fix it.  Process modeling  gives a visual representation of business processes or workflows that companies can use to identify opportunities for efficiencies and better workflow. If a company wants to know what’s happening at every step of their supply chain process, it would use data modeling.
• Process mapping:  Organizations  gather information  from employees to create a visualized model of the workflows. If a company wants to clarify which departments own each part of the procurement process, it would use  data mapping .
• Decision management:  Companies recognize that streamlined, automated decision-making is key to being able to respond quickly to market pressures and pivot without losing momentum. When policies and business logic are embedded directly into application code, it can take weeks or even months for IT to recode.  Decision management  software allows business users to model and manage operational decisions that are repeatable, automated and in compliance with business guidelines and regulations.
• Robotic process automation:   Robotic process automation , also known as software robotics, uses automation technologies to mimic back-office tasks of human workers, such as extracting data, filling in forms, moving files, et cetera. It combines  APIs  and user interface (UI) interactions to integrate and perform repetitive tasks between enterprise and productivity applications. By deploying scripts which emulate human processes, RPA tools complete autonomous execution of various activities and transactions across unrelated software systems.

IT automation

In today’s digital-first age, customer satisfaction depends on the performance and availability of business-critical applications and infrastructure. As such,  IT operations (ITOps)  teams are under immense pressure to deliver operational excellence and must move at the pace of increasing business demands.  AIOps  drives efficiency and optimization in a modern, dynamic IT environment to accelerate necessary digital transformation.

Using software to create processes that reduce or replace manual interaction with IT systems, AIOps brings real-time insights to IT environments so that IT operations teams can assure proactive, continuous application performance that enables exceptional customer experiences, while increasing compliance and safely reducing cost across high variability of demand:

• Full-stack enterprise observability:  Modern applications, services and environments are continuously becoming more complex, and traditional monitoring tools lack the visibility that’s required to achieve the operational excellence needed in these new environments. Enterprise  observability  platforms, powered by automated APM, deliver full visibility by automatically ingesting observability metrics, tracing every request and profiling all processes across  microservice  platforms and the  CI/CD pipeline . Enterprise observability enables ITOps teams to discover, map and monitor the full application stack, including all interdependencies, providing immediate feedback after any change.
• Application resource management (ARM) and optimization:  Businesses often face the challenge of balancing the right number of resources for business applications while limiting as much overallocation as possible. When organizations come to terms with overallocating any of their applications, it is often unsustainable and costly. Modern applications are separated by multiple layers of abstraction, making it difficult to understand which underlying physical server, storage and networking resources are supporting which applications. Application resource management drives OpEx by automatically assuring applications get the resources they need to perform, no matter where they run or how they are built. ARM eliminates resource congestion at every level of the application stack, from the business application to the underlying hybrid and multicloud environment.
• Proactive incident resolution, remediation and avoidance:  A few seconds of application downtime can cost millions in lost revenue, reputational damage or regulatory penalties. To avoid these pitfalls, enterprises want to better predict IT outages and resolve them more quickly. With proactive incident resolution and remediation, ITOps teams gather new insights faster and with context, transforming user experiences and improving business outcomes. Proactive incident management platforms use explainable  AI  to help CIOs and ITOps teams detect and diagnose complex issues by connecting the dots between  structured and unstructured data  in real-time to give users a holistic understanding of IT incidents, enabling businesses to drive toward operational excellence within their IT estate.

Integration

As transformation efforts quicken across the globe, they also introduce a serious side effect—pushing data out into silos and impeding access to information that business teams need to be successful. Organizations that can quickly and securely connect applications and systems will outperform those that don’t. Without the right integration tools, data stays locked away, hampering your ability to make informed business decisions and implement scalable automations that uncover new efficiencies:

• API management:  APIs are in use everywhere. They connect your systems and applications so you can access and expose your data in a secure way. Having a strong  API management  strategy and toolset is critical to being able to create, manage, secure and socialize APIs with internal and external consumers.
• Application integration:  To make effective business decisions, you need to ensure you can trust your data. With  application integration , you can move and transform data between applications and systems—no matter where it resides—so existing and newly deployed applications are seamlessly integrated throughout your organization.
• Event streaming:  To optimize value flow to customers, businesses need to gain insights from real-time data to make informed choices that improve operations and act quickly in response to shifting customer needs.  Event streaming  allows you to capture and integrate streaming event data from your applications so you can automate customer-facing and backend actions based on defined triggers.
• Enterprise messaging:  With an explosion in the number and types of systems within a typical enterprise, cost-effective, scalable system-to-system integration has become a challenge. Enterprise messaging is a proven technology that connects systems and their data in the most flexible, highly available and secure way. Critical data, like a financial transaction, is sent between systems in the form of messages and held in a queue if it can’t be delivered immediately (like in the case of a system outage) to ensure it’s sent successfully, never lost and never sent more than once.
• High-speed file transfer:  Companies that need to transfer very large files over long distances under varying network conditions are challenged by the Internet’s underlying transfer technology, Transmission Control Protocol (TCP). Fast, Adaptive and Secure Protocol (FASP) takes a different approach to file transfer, allowing businesses to achieve transfer speeds of 100x faster than traditional methods.

Seven ways IBM can help companies achieve operational excellence using intelligent automation:

• Completely understand your processes before you automate with process mining.
• Put automation in the hands of your employees with digital workers.
• Improve productivity and reduce errors with RPA.
• Assure application performance with smarter resource management.
• Improve application performance monitoring with observability.
• Connect your apps and data to automate your business.
• Manage your API lifecycle with API management.

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• The Workstream
• Project management
• Process Flow Chart

Process flow chart: what it is & how to create one

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Keeping your business organized can be a tall order — especially as it grows. Process flow charts are one way to organize business processes by visualizing the steps of a process or workflow . As you dive deeper into the individual steps of a process, you can discover opportunities to improve teamwork and productivity.

Visualizing processes with a flowchart can help you organize important details and improve your operations. As you develop your process flow chart, you can discover non-value-added processes and optimize your workflow.

In this guide, we’ll discuss what a process flow chart is and how you can create one for your business. Keep reading to learn more.

What is a process flow chart?

Process flow charts are a way of visually organizing your workflow. They use different shapes connected by lines, each representing an individual step.

A process flow chart aids in project management by helping you outline and visualize your workflows. An example could be a chart showing how you process and fulfill customer orders from the moment an order is placed to delivery.

Importance of process flow charts

Visualizing your workflow allows you to understand your project scope better so you can plan your project based on your goals and deadlines.

Having a clear visual representation of your processes helps improve teamwork and keep everyone on the same page. This way, everyone can understand your business processes from start to finish and the role they play in those processes.

Creating a flow process chart can improve productivity by weeding out non-value-added activities. You have ample room to grow and improve if you’re not wasting precious time on unnecessary steps.

Types of flow charts

There are several types of flow charts, each serving a different purpose. You can learn more about some of the different flow charts below:

• Basic flow chart: Simple flow charts are ideal for visualizing basic steps without many complexities or details.
• System flow chart: System flow charts show how every part of a system interacts with the other parts.
• Workflow diagram: Workflow diagrams visualize steps or processes required to complete a project, which can help you minimize waste.
• Data flow chart: Data flow charts show how data moves throughout your system and other connected systems.
• Decision flow chart: These flow charts play a vital role in the decision-making process , answering simple questions to arrive at a final decision.
• Swimlane flow chart: Swimlane flow charts allow you to visualize who’s responsible for each part of a process or project, whether that’s an individual or a group.

Components of a process flow chart

Process flow charts have a few key symbols used to contextualize the information in the chart. Different symbols are used for different steps within a process flow chart with connecting lines in between.

Different shapes and symbols—including diamonds and rectangles—are used for each process or step, with lines connecting the symbols. Different types of lines denote the beginning and end of the flow chart, and directional arrows indicate the flow direction of the chart.

Visualizing information with flow charts can play a crucial role in project planning , and it’s easy once you understand what the symbols represent.

Steps to create a process flow chart

Creating a process flow chart isn’t rocket science, but there are some basic guidelines you need to follow. Below is a step-by-step guide to help you create your next process flow chart.

Identify the process

Start by clearly defining the process or workflow you’re going to outline. Choosing which projects to visualize and optimize is critical to strategic planning . Once you have a good idea of what you want your flow chart to represent, you can start building it out.

Define boundaries

When it comes to process flow charts for businesses, you can always add more details or break a process down further by adding more steps. However, when creating a flow chart, you only want to include the necessary details.

Figure out the scope and boundaries of your flow chart before you start fleshing it out. That way, you’ll avoid wasting time adding information that complicates the main objective. Details are good, but you don’t want to go overboard.

Gather information

This is where knowledge sharing comes into play. Now, it’s time to collect detailed information about the steps, inputs, and outputs contributing to the process. Ensure you track the process from start to finish to avoid missing crucial steps.

Identify the sequence of steps

Now that you know the steps involved in the process you’re outlining, you can put them in the correct sequence to start organizing your flow chart. Your flow chart should move in one consistent direction from beginning to end, with each step bringing you closer to completing the process.

Draw the flow chart

With process flow charts, the individual steps only tell part of the story—you need to connect them to tell the whole story. Complete your flow chart by using symbols and connectors to connect individual steps and create an accurate visual representation of the process from start to finish.

Review and revise

Once you’ve organized and drawn everything out, review your flow chart to ensure it’s accurate, complete, and clear. If there are any issues, you can revise your flow chart.

Reviewing and revising is a never-ending battle. Even after completing a flow chart, you must review and update it regularly to ensure accuracy. Make sure to reflect any changes in your flow charts as they occur.

Uses of process flow charts

A good process flow chart can provide several benefits for businesses. Here are some of the common uses of process flow charts:

• Process improvement: Visualizing processes helps you understand how to optimize them, saving you time and money.
• Training and onboarding: When you clearly understand your training and onboarding process, you can streamline it and ensure everyone receives the same training.
• Communication: Flow charts can help you identify communication gaps in different project stages to keep everyone on the same page.
• Documentation: Using visuals helps everyone follow documentation best practices — from project documentation to team documentation.
• Compliance and quality assurance: Creating a step-by-step visual representation of a process helps you identify potential compliance or quality assurance issues before it’s too late.

Best practices for creating effective process flow charts

An effective flow chart can help you optimize business processes and improve productivity and project collaboration . Here are some guidelines to follow to ensure you’re doing it right.

Keep your process flow chart simple. Focus on adding key steps and information only.

Using consistent symbols and connecting lines adds clarity to your process flow charts, making it easier to collaborate with your team and boost productivity. You can even involve stakeholders in the process.

Once your flow chart is complete, there’s still work to do. Updating and maintaining flow charts helps you keep a constant visualization of the processes that your business relies on.

Create process flow charts with Confluence Whiteboards

Process flow charts can offer several benefits for businesses, improving productivity and teamwork while eliminating unnecessary steps. With Confluence Whiteboards, you can visualize and turn ideas into tasks.

Confluence brings everyone together in a connected workspace to move projects forward. Teams can create, edit, and share project plans in a connected workspace so everyone is on the same page.

Confluence flow chart templates make it easy to create effective flow charts quickly, plus you can convert stickies into Jira issues with a few clicks.

Use Confluence Whiteboards to visualize your workflow and optimize your business with process flow charts.

Process flow chart: Frequently Asked Questions

What is an example of a process flow chart.

A great process flow chart example is product delivery. You can use a process flow chart to visualize the delivery of a product from the moment the customer contacts you to the moment you finish the job. The first step may be the customer contacting you (or vice versa), eventually leading to the point where you fulfill the order, and the customer receives an email letting them know their order arrived.

You can use process flow charts for almost anything, including manufacturing, service delivery, product delivery, and project management processes.

What tools can you use to create process flow charts?

Confluence allows you to create process flow charts that visualize your business processes accurately. Confluence is easy to use, and you can start with a flow chart template so you don’t have to do all the work. Once you’ve chosen a template, you can add individual steps and symbols to clarify the chart. Confluence also integrates seamlessly with Jira and various third-party tools.

How often should process flow charts be updated?

If you modify a workflow or process outlined in a flow chart, update the chart accordingly. Flow charts don’t provide much value if they’re inaccurate, and you probably add or remove steps from various processes and workflows more than you think. You should regularly review and update your process flow charts to ensure they continuously add value to your business.

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How AI process automation revolutionizes operations management

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The 1990s sold us the idea of "business processes reengineering." But it fell short of its promise to make organizations significantly more efficient, effective, and competitive.

So, automated business process management had to wait for technology to catch up...

...Now, in 2024, AI has ushered in a new era of digital innovation.

Through advancements in computer science, deep learning, and big data analysis, artificial intelligence is starting to make flexible business automation a reliable solution.

Smart, automated business processes enhance human capabilities and are becoming a reality for many organizations. In this blog post, we'll show you how others benefit from automation powered by artificial intelligence and, hopefully, inspire you to do the same.

What is business process automation?

Business process automation (BPA), closely integrated with enterprise resource planning (ERP) systems, uses technology to save time, improve efficiency, and execute repetitive tasks within businesses . This automatic business process management replaces human intervention with efficiency-boosting solutions.

Tasks that used to require human intelligence and input are now performed automatically and without the previous human errors, leading to:

• Improved accuracy, fewer errors, and consistency
• Streamlined operation and reduced costs
• Increased employee focus on strategic work

Robotic process automation (RPA) and workflow automation tools can now use software robots for rule-based tasks. That means advanced AI technologies like machine learning and big data analysis are key players in this transformation. 

Check out some software solutions in this space to see BPA in action. Low-code automation software options include Kissflow and Appian , but more powerful options like open-source Bonitasoft are also great if you need a flexible solution that's easy to integrate.

How does AI help automate business processes?

Artificial intelligence is making automatic business processes smarter and more flexible. Previously, business process management automation was great at simple, repetitive, time-consuming tasks but not so good at anything that needed learning or adapting. It followed strict rules and couldn't handle changes or new challenges on its own.

These days, AI can learn from both structured and unstructured data. Process mining further improves over time and effectively processes decision-making and language-understanding decisions. Here's the thing, though: artificial intelligence in business automation is still pretty new technology. 

Software companies are working on incorporating AI, but it's early days. Developing these features takes a long time, and while we're starting to see some exciting updates, there's a lot more to come. 

So, as artificial intelligence grows, we can expect huge changes and future improvements in business process automation.

Automated processes with gen AI have exploded by 500% in 2023 alone.

AI for operations management (OM)

AI in operations management enhances enterprise resource planning systems by evaluating extensive process data and running predictive analytics. This helps reduce costs and enables businesses to make better-informed decisions that respond to both customer's and internal needs.

Popular BPA software with built-in AI operations management includes SAP IBP (integrated business planning for the supply chain), Oracle NetSuite (for inventory and financial management automation), and IBM Maximo (for predictive maintenance).

OM assures a smooth production process , and AI in operations can improve processes from organizing the supply chain to ensuring the top quality of products. It analyzes data to spot where things could be more efficient, saving time and resources.

AI-powered automation helps maintain production efficiency, anticipate machine maintenance to avoid delays, and use patterns to manage precise inventory levels. It can also quickly check products for defects, ensuring only the best-quality items reach customers.

AI in supply chain management and logistics

Supply chain and logistics involve managing the flow of goods from suppliers to customers. AI can contribute to and optimize the entire process of business management, creating streamlined processes from transportation and warehousing to delivering products efficiently and on time.

An excellent example of AI's impact in this sector comes from Amazon, a company that delivers billions of packages annually in the U.S. alone:

This fun animation explains how Amazon uses artificial intelligence for process optimization and how it:

• Analyzes data from millions of customer orders and deliveries
• Creates predictive models to foresee what products customers will want next
• Develops intelligent systems for choosing the best suppliers
• Automatically reorders products based on forecasts
• Decides on the best locations for its next warehouses 
• Handles in-warehouse operations 

All these AI applications streamline Amazon's process management and translate into accurate delivery promises to customers worldwide.

AI in regulatory compliance & risk management

It costs companies 2.7 times more not to meet compliance standards than to meet them. Still, compliance is hard due to the complexity and constant evolution of legal requirements. AI can automate compliance process management by monitoring regulatory changes and alerting companies when relevant laws are updated.

For example, Thomson Reuters Regulatory Intelligence (TRRI) is an AI-powered solution that does just that.

AI also enables risk assessments by analyzing large volumes of data. It identifies potential threats and vulnerabilities, allowing the IT team to implement proactive risk management strategies.

Equally important, AI can streamline reporting by automatically generating compliance documents based on the latest data.

How AI automation makes departments more efficient

AI automation occurs in industries and departments across the board, streamlining workflows by reducing reliance on manual tasks. Workato's 2024 Work Automation and AI Index Report shows that 50% of automated processes are in at least 4 departments. Plus, the number of automated processes across at least 5 departments has doubled in the past year.

Companies work faster and smoother by enhancing business process management with intelligent systems in sectors like:

• Customer service: Chatbots and automated support systems enhance customer interaction, provide 24/7 support, and personalize customer experiences.
• Marketing automation: An AI tool creates content, personalizes marketing campaigns, and analyzes consumer behavior to improve efficiency, engagement, and conversion rates.
• Human resources: AI screens resumes and schedules interviews, and it helps in employee onboarding and training .
• Finance and accounting: Algorithms automate financial operations such as invoicing, payroll, fraud detection, and economic forecasting.

Read this blog post about AI applications to discover what industries can benefit the most from AI and how this new technology applies to various departments - L&D, sales, marketing, customer support, HR, IT operations, operational efficiency, and operational excellence.

How AI automates video production

A particular case of AI automation involves video production . Consumers spend about 18 hours a week watching all kinds of videos (not just entertainment), and thanks to generative AI, companies can keep up with the demand.

Platforms like Synthesia let you turn text into video with AI avatars (digital double of real actors), translate it into multiple languages, and change its content to personalize or localize it as needed. Enterprise clients can also create an AI avatar of someone at their company and even clone their voice to show their audiences a trainer they know.

Here's a four-minute video on how creating AI videos can be done in minutes with Synthesia's natural language processing and Gen AI capabilities.

AI video production tools save employees 34% of their time and 45 hours/month, helping them create videos for marketing, training, sales enablement , customer service, and internal communications.

In short, generative artificial intelligence can automate processes in video production, allowing companies to make their own videos with minimal budgets. It solves the problem of traditional video production being resource-intensive and challenging to scale.

Modern Canada used AI for business processes and scaled its video production. The company created over 100 videos in six months, reducing the process from weeks to hours (by 90%) and saving over $6,000 per video. Marc Gélineau, Director of Operational Excellence, summarizes the efficiency of this process: "If you really put your energy into it, within 2 hours, you could have something that's very decent to present to someone."

Scale your AI video production in-house

When it comes to business process automation, AI can be a game changer if used in the most impactful sectors.

83% of employees seem to believe that video is one of those sectors, claiming that video communication would improve their overall work experience. Want to scale your video production but are unsure how it will fit your budget?

Synthesia can help. Used by over 50% of the Fortune 100, our AI text-to-video solution will enable you to produce videos in-house with minimal resources.

Book a demo here and find out how to create better videos at scale for your organization.

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Amid intensifying market disruptions and escalating business volatility, there’s more pressure on Chief Financial Officers (CFOs) and Chief Risk Officers (CROs) to balance multiple interconnected transformations while sustaining company performance, profitability and safety.

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A data-driven operating model can reduce time forming insights by up to 30% and deliver real-time business performance analysis.

Improve liquidity management

Additionally, it can increase cash collection by up to 30%, improve cash and capital forecasting by 85-95% and raise cash in bank by up to 95%.

Increase operational efficiency

See a 50-60% increase in operational efficiency, a 45-50% reduction in operating costs and 30-40% savings from an improved reporting system.

Mitigate risk and improve compliance

Touchless processing can help drive a 50-60% increase in efficiency, while an improved reporting system can help deliver up to 40% in savings.

Create an agile operating model

Increase cross-worldwide business unit collaboration, while simplifying processes and harmonizing service.

Leveraging “out-of-the-box" cloud capabilities can increase automation and integrate data and ERP on the cloud for powerful analytics.

Provide a single “source of truth”

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Simplify the technology landscape

The simpler the landscape and greater the use of “out-of-the-box" capabilities, the greater the opportunity to grow your business at a lower cost. For example, reducing the number of applications frees up resources to focus on innovation activities.

Build a foundation that enables evolution

A solid ERP foundation can enable future initiatives, such as advanced reporting and analytics, intelligent automation and an insight-driven culture.

Activate new ways of working

Use the power of humans and data science to transform decision-making and ways of working across the organization.

Today’s decision support capabilities require new technology and collaboration tools. An end-to-end modeling capability that emphasizes scenario planning and aligns to company metrics is key.

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Effective regulatory compliance and remediation

Achieve a 95-98% quality rating across deliveries by implementing a quality control framework. Through AI-driven remediation, deliver 50-70% in cost savings.

Optimize risk-adjusted business performance

This can lead to a 20% improvement in revenue and risk adjustment performance management, unlocking new capital efficiency use cases. See a fast and efficient flow of risk insight to business divisions, along with an enhanced ability to identify and mitigate control issues and risk appetite breaches.

Safeguard business growth and expansion

Begin with establishing controls for financial product innovation (e.g., payments) and regulatory advisory for market expansion. In addition, proactively identify risks and opportunities in the interconnected business model.

The time has come to devote the same resources and attention given to financials to ESG measurement. It all starts with blending financial and nonfinancial goals via a data-led performance management capability.

Risk mitigation and cost avoidance

Preventing fines and penalties (e.g., climate taxes) and avoiding the loss of business due to the impact of your ESG metrics are just two of the benefits of implementing a data-driven approach to sustainability measurement, analytics and performance reporting.

Compliance and control

Meet consistent compliance with regulatory standards, and draw on data which is more reliable for reporting and decision-making.

Optimization of financing

Improved sustainability ratings can reduce the cost of debt. What’s more, you can gain access to beneficial lending rates, subsidies and tax breaks. And lastly, improve your chances of being included in a large ESG fund.

Cost reduction and operational efficiency

When you reduce water, energy and fuel usage—along with raw materials and waste—you can see increased efficiency and less maintenance and transportation costs.

Revenue growth and pricing power

Eco-friendly products can improve customer loyalty. They can also offer entry to new customer segments, new geographical markets and create the opportunity to leverage premium pricing models for innovative products.

What’s trending in finance and risk management

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Risk is everywhere and companies need to create a new risk mindset and capabilities across the enterprise. This pivot is critical for turning hyper-disruption into opportunities for business resilience and growth.

Accenture explains how CFO's role has evolved & how CFO leadership & strategic decision making can drive enterprise growth & reinvention.

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• 7 functions of operations management (p ...

7 functions of operations management (plus the skills you need to master them)

Companies have operations departments to keep everyday functions on track. The operations department focuses on maintaining the efficiency of the production process and helps teams make smart decisions. In this piece, you’ll learn the seven functions of operations management. These functions outline the essential duties of the operations team.

Operations management keeps processes running smoothly within organizations. Think of your company as an airport. Each team is an airplane taking off in different directions with their projects and ideas. As an operations manager, you’re the air traffic controller keeping everyone and everything on track. 

Operational planning

Product design

Quality control

Forecasting

Supply chain management

Operations is involved in almost every aspect of an organization. For example, if a project manager wants to hire a new team member, the operations team will first perform a cost-benefit analysis . When the production team wants to create a new product, the operations team starts by assessing customer demand. 

You may spend more time managing some functions than others. For example, if your company doesn't provide a physical product, you likely won't focus much on supply chain management. But understanding every operational function is the best way to prepare to work in any industry. 

1. Operational planning

Operational planning is the foundational function of operations management. Your duties within this function may include:

Monitoring daily production of goods

Managing and controlling your inventory

Keeping tabs on team member performance and well being

Production planning

The role of operations management is to uphold operational efficiency . Always be on the lookout for new advancements to remove bottlenecks and improve your operations strategy.

Skill needed: Resourcefulness

When you’re resourceful, you’ll have an easier time maintaining business processes. As an operations manager, you’ll have to manage your team and keep the company’s wellbeing front of mind. To handle these changes, you need to be fast on your feet. In situations when you don’t have the tools you need at your disposal, it’s critical to think quickly and use what you have to come up with solutions. 

Finance is an essential—and universal—function of operations management because every company strives to reduce costs and increase profits. As an operations manager, you’ll ensure company leaders keep the budget in consideration when they make important decisions. Some of your tasks may include:

Creating budgets to meet production goals

Finding investment opportunities

Allocating budgets and managing resources

You may wonder how the financial duties of the operations team differ from those of the finance department. The finance department will handle everything from revenue to salaries. Meanwhile, you should limit your financial participation to things relevant to the production process.

Skill needed: Financial planning

Financial planning happens when you determine if your business has the budget to achieve strategic objectives and goals. To push your company leaders toward financial success, you’ll need to plan ahead.

Keep production costs low by finding high-quality vendors with low prices. You want to create a top-notch product that stays within your customer’s budget.

3. Product design

Product designers may be the creatives of the team, but the operations team is the eyes and ears that gathers information from the market. Once you identify customer needs and marketing trends , you'll relay what you've learned back to the designers so they can make a strong product. 

Specific tasks your team may handle in this function include:

Consolidating market research into digestible results

Communicating results to a product design team

Offering design direction to help designers devise a product

Without the operations team, the product design team would have trouble knowing what to create. The market is always changing, and creating a successful finished product requires extensive research.

Skill needed: Data interpretation

The ability to interpret data is a key skill for this function of operations management. As the operations manager, you must turn data into understandable directions. Your goal should be to clearly communicate how you want your product to match or exceed other products on the market. 

Once you have a plan in place, streamline communication across teams by using one platform or tool. Create a central project plan to track action items, information, and feedback. Then, share it in a project management tool so everyone can access it and view changes in real time.

4. Quality control

Quality control goes hand in hand with product design. After the production team creates a product, the operations team will ensure it meets quality standards. You’ll need to test the product to guarantee there are no defects before releasing it to the public. Your tasks for quality control may include:

Performing risk analysis to identify potential problems

Inspecting products to make sure they meet quality standards

Creating tests to control your product quality

Documenting any defects or deficiencies of products

The level and standards of quality control vary by industry—one of the first things your team should do during the quality control process is to perform market research to determine what quality standards should be in your industry. Once you’ve outlined a set of quality standards, use them as a benchmark for quality management moving forward.

Skill needed: Conflict management

Not every product will be top quality after one round through the production process. It may take many rounds of design and a few trips back to the drawing board to create a quality product up to standards. 

This type of feedback will ultimately make your product the best version of itself, but it can be hard to hear in the moment. In order to excel at this function of operation management, build strong conflict management strategies . That way, you can weather these times of uncertainty and create products that wow customers.

5. Forecasting

Forecasting isn't just a term for the weather—operations teams also use forecasting to predict the demand for a product. Your team can master forecasting by trying to answer hypothetical questions like:

What will the demand for this product be in the future?

What marketing and promotions should we plan for this product?

What sales initiatives should we plan for this product?

Can we estimate the storage costs we’ll need for inventory?

Can we determine the cost of sourcing and raw materials?

Skill needed: Data driven decision making

Data driven decision making will serve you well in many functions of operations management. The only way to make accurate predictions is to base your predictions on facts. Start by forecasting product demand by analyzing past trends. Then, communicate forecast results to department leaders so they can adjust future plans accordingly.

6. Strategy

Strategy is a broad function of operations management that can involve operational planning , monitoring, and analysis. The goal of strategic management is to make sure production decisions align with business goals. Your company’s business objectives may include: 

Prioritizing customer satisfaction

Improving the production system 

Controlling costs while maintaining a competitive edge

Your job as operations manager is to find ways to meet the business objectives of your company. Some strategies you could use for the examples above include:

Analyzing your inventory: To prioritize customer satisfaction, start by analyzing your inventory. This can increase customer satisfaction by ensuring you’re always able to meet customer demand. 

Collaborating among teams: More collaboration among teams will improve the production system because communication will increase, resulting in less room for error.

Prioritizing green processes: Switching to more environmentally friendly processes can save money in the long run and keep customers invested in your brand.

Skill needed: Critical thinking

Critical thinking is important for the strategic function of operations management because it’s how you create thoughtful ideas and tie them back to fundamental points. When you logically think through concepts, you’re able to develop strong strategies. You can use research and data to support your ideas and then use what you’ve learned to make well-supported decisions for your team. 

7. Supply chain management

If your company produces products or services, your company will need supply chain management for sourcing, producing, and shipping. You may have a separate department for the supply chain, but supply chain issues related to internal production will be yours to handle. The supply chain should flow in a cyclical fashion as follows:

Raw materials

Production/manufacturer

Distributer

The supply chain is cyclical because once you analyze consumer demand, you'll source more raw materials and go down the chain again. 

You don’t necessarily have to follow each of these steps. For example, if you work at a small company, you may send products or services directly to consumers. This cuts out distribution and retail costs, but you’ll still need to keep the supply chain intact. If there’s a bottleneck in one stage of the supply chain, it can wreak havoc on every other stage.

Skill needed: Problem-solving

As an operations manager, you'll need to organize, plan, and delegate . But to take your skills a step further, you must be a good problem-solver as well. There are many problem-solving strategies you can study and keep in your toolbox—and your team members will appreciate your quick solutions when things get tough. 

The importance of operations management

The functions of operations management are critical for every business—whether you’re in the manufacturing or tech industry. While tech companies may find finance and strategy more important and manufacturing companies may focus more on the supply chain, these seven functions draw a full picture of how to run any internal team.

Companies make many decisions through the production process, and the operations team often serves as a voice of reason between departments. Without operations management, departments may have trouble aligning decisions with company goals, avoiding conflict, and keeping operations running smoothly. In particular, operations management:

Motivates team members: The operations team motivates team members by keeping the workplace organized and improving workplace conditions. Team members are more excited to work when they have a functioning work environment.

Utilizes resources: Another part of your job as operations manager is to build a budget that uses the company's resources wisely. Try to reduce costs whenever possible, stretch resources to fit project needs, and keep resources from going to waste.

Enhances collaboration: You can enhance team collaboration within your organization by improving decision making. When you make good decisions, you establish trust among teams, which results in the delivery of top-quality products to customers. 

Helps achieve objectives: You'll help achieve business objectives by serving as a checkpoint for big decisions. When department leaders consider changes or initiatives, you’ll assess whether their ideas align with company goals.

Improves productivity: Increase productivity by making the product’s delivery process more efficient. Team members in your organization may complete their work faster when you make improvements to production.

Understanding the operations team in relation to other departments

An operations department can take on different roles depending on company size and the product. If you’re a small company, the human resources team may share some duties with the operations team, like financial planning. But larger manufacturing companies often have clear lines between operations and human relations. In this setting, you’ll likely work hand-in-hand with a supply chain management team.

You may wonder why supply chain management is one of the main functions of operations management if it’s also a separate department. Even though these two processes are typically closely tied together, the teams focus on slightly different priorities.  Traditionally, operations management involves the internal part of production, while supply chain management involves the external part. 

Guide teams toward efficiency with Asana

The goal of operations management is to make your decisions smarter and your production leaner. Whether you’re keeping daily projects on track, monitoring product quality, or developing business strategies, Asana can give you the high-level perspective you need to do it all. 

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For our fourth annual Work Trend Index, out today, we partnered with LinkedIn for the first time on a joint report so we could provide a comprehensive view of how AI is not only reshaping work, but the labor market more broadly.

2024 release wave 1 kicks off with hundreds of AI-powered capabilities for Microsoft Dynamics 365 and Microsoft Power Platform  

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Early adopters of Microsoft Copilot in Dynamics 365 Guides recognize the potential for productivity gains  

The integration of Microsoft Copilot into Dynamic 365 Guides brings generative AI to this mixed reality solution. Copilot for Dynamics 365 Guides transforms frontline operations, putting AI in the flow of work, giving skilled and knowledge workers access to relevant information where and when they need it.

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In this extraordinary age of AI, we find ourselves on the brink of a profound revolution. Companies are looking for generative AI to solve longstanding problems around customer connection, loyalty, and seller productivity.

Microsoft unveils AI features for manufacturers at Hannover Messe 2024  

At Hannover Messe, the world’s leading industrial trade fair, organizations across engineering, digital technologies, energy, and more will gather to demonstrate solutions for high-performance, sustainable industries. Microsoft is honored to attend this year’s event to showcase how Microsoft Dynamics 365 helps manufacturers.

Introducing new Microsoft Copilot capabilities to optimize Dynamics 365 Field Service operations    

Delivering exceptional service is key for building customer preference and loyalty. Today, we’re introducing new capabilities for Microsoft Copilot in Dynamics 365 Field Service that help service managers and technicians efficiently find the information they need to resolve issues right the first time while keeping customers updated at every step of the process.

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AI-powered innovations enhance customer service with 2024 release wave 1  

We’re excited to announce the general availability of new and enhanced experiences in Microsoft Dynamics 365 Customer Service as part of our 2024 release wave 1 cadence. This release focuses on extending Microsoft Copilot capabilities by infusing generative AI into customer, agent, and supervisor experiences.

New pricing for Microsoft Dynamics 365 effective October 2024  

Today, we’re announcing the first pricing update for Microsoft Dynamics 365 in more than five years. Since our last pricing update, Dynamics 365 has transformed customer relationship management (CRM) and enterprise resource planning (ERP) with connected applications for every line of business—across marketing, sales, customer service and field service, finance, operations, and supply chain—and each year, we release hundreds of new features and enhancements designed to help people work smarter, reclaim time, and collaborate seamlessly.

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New Microsoft Dynamics 365 and Microsoft Copilot innovations for supply chain, sales, and service join the 2024 release wave 1  

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Forrester TEI study shows 315% ROI when modernizing customer service with Microsoft Dynamics 365 Customer Service  

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Final approach: How airports can prepare for advanced air mobility

With the COVID-19 pandemic wreaking havoc in global aviation over the past year and a half, the airport industry has been hit hard. The number of scheduled passengers boarded onto planes dropped from about 9.1 billion to 3.6 billion from 2019 to 2020—a decrease of 61 percent—and airport revenues were $129 billion lower than the pre-COVID-19 forecast of $199 billion, representing a reduction of about 65 percent. 1 Airports Council International, "The impact of COVID-19 on the airport business and the path to recovery,” July 14, 2021, aci.aero. The year 2021 is set to look only slightly better, with an estimated reduction of about $110 billion in revenues compared with the pre-COVID-19 forecast. 2 Airports Council International, "The impact of COVID-19 on the airport business and the path to recovery,” July 14, 2021, aci.aero. Simultaneously, airport operators have had to implement stringent safety protocols to protect passengers and employees. Amidst this disruption, they have had little time to focus on the future.

While the industry’s short-term difficulties are not yet over, passenger traffic volumes have started to increase in most regions and should ultimately recover. As they do, airport operators face another transformative challenge: the need to integrate a new range of manned and unmanned aerial vehicles into their operations and infrastructure, including battery- or hydrogen-powered conventional aircraft; drones for tasks such as cargo movement, aerial surveillance, or even firefighting; and passenger advanced air mobility (AAM), leveraging electric vertical takeoff and landing (eVTOL) aircraft.

All these aircraft are poised to disrupt the aviation industry significantly. Many of the most significant changes will come from the growth of passenger AAM, which involves smaller aircraft (typically two to seven seats) and a regional range varying from a few dozen to a few hundred miles. Passenger AAM aircraft, which can take off and land vertically without the need for a traditional runway, will initially require pilots. In the future, however, autonomous flights may be possible. These aircraft provide a faster and sustainable option for travelers, since they are powered by electricity or hydrogen, but they also will require new infrastructure and will change long-standing passenger flows.

It is likely only a matter of years before AAM innovations truly take off. McKinsey’s AAM database lists more than 250 active AAM projects across the globe with more than $11 billion in disclosed investment over the past five years and more than 5,000 employees globally as of August 2021. Investors, including venture capital funds, special-purpose acquisition companies (SPACs), high-net-worth individuals, and global leaders in the aerospace and automotive industries, are backing specialist start-ups, and several full-scale prototypes are already undergoing flight tests. Around the globe, work is underway to adapt regulatory frameworks and to gain public acceptance. The front-runners are publicly committed to launch commercial operations by the mid-2020s.

The speed and scope of these developments make integrating AAM an issue of high relevance for airports. Owners and operators must begin planning for this emerging transport mode today, given the long timelines for building infrastructure and for making other necessary changes. This article makes the case for action by airport owners and operators to seize this opportunity and examines the key industry developments they should have on their radar. While some operators might be hesitant to move forward now, the experience with another recent innovation offers a cautionary tale. At airports, the unanticipated arrival of ridesharing created confusion at airport curbsides, and many facilities missed revenue opportunities. Because these disruptive new services were not accounted for in the master plans, airports had to resort to patch-up solutions that often irritated travelers, such as busing them to rideshare areas. In addition, airports were not prepared for the loss of parking revenues that occurred as travelers switched from their own cars to ride hailing. As AAM takes off, airports will want to avoid similar challenges.

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Airports are uniquely positioned to benefit from early aam growth.

Airports are likely to be at the center of the AAM revolution, at least in the beginning. Their prominence will result partly from the fact that more than two-thirds of the 25 largest AAM companies have stated that airports are among their initial target markets. There are good reasons for this focus. First, the economics are attractive because of high, bundled demand for last-mile connections—the vital and currently congested links between airports and the urban areas they serve. Second, some of the basic infrastructure is already in place, both on the ground and in the air, and airport operators have the relevant skills and experience needed to manage facilities. Third, there are obvious customer benefits. AAM flights could save 40 to 60 percent of the time spent traveling to airports on ground transportation within and beyond the city limits. Business passengers would be natural early adopters.

The main use cases for AAM flights involve transport between a hub airport and vertiports in city centers or the broader catchment area, or between a hub airport and AAM landing sites at smaller regional airports. The ease of implementing these use cases will vary. For instance, an AAM connection linking an airport to a city vertiport may be difficult to achieve because of the time, complexity, and cost of developing the downtown infrastructure. Flights to vertiports in a broader suburban and rural catchment area, though less in demand, might be easier to establish and could decrease travel times.

All three use cases will require airports to integrate AAM connections into their infrastructure, investment, and business planning. And each use case will involve distinct challenges, making a “one size fits all” approach impossible.

We project that large and densely populated urban areas, such as London, Los Angeles, and Mumbai, will eventually require networks of up to 30 vertiports or AAM landing sites at small airports. Even medium-size urban areas, such as Atlanta and Düsseldorf, could need as many as 20. These facilities must offer a range of services similar to those found in today’s airports, such as passenger processing facilities, waiting areas, and aircraft-handling and -maintenance areas. Such “satellite” airports could further reduce door-to-door travel time and enhance the traveler’s experience.

Vertiports could be managed by a diverse group of players, including those in rail, public transport, real-estate, and aviation ground handling. Regardless of who is in charge, AAM vertiports could serve as physical extensions of existing airports, providing a gateway to flights originating in city centers. Airport operators might be well positioned to manage vertiports, since they already have most of the required capabilities and can capture many synergies with their traditional operations.

Even a modest AAM offering at airports could generate new revenues. Some business will come from existing passengers who prefer AAM over other types of short-haul transportation, especially if it reduces door-to-door time. Some passengers may even make extra trips because of the greater convenience.

Airports could charge landing fees to AAM operators in the same way that they charge fees to airlines. They could also provide additional services for a fee, such as charging infrastructure or ground servicing. Additionally, the new passenger traffic would increase nonaeronautical revenues from retail or food and beverage. Revenues from ride hailing, taxi fees, parking, and car rentals would slightly decrease, but the overall balance would remain largely positive. We estimate that in a hypothetical airport that serves 45 million passengers per year, AAM may generate incremental revenues of about 5 percent and increase passenger numbers by around 1 percent (Exhibit 1).

The promise of boosting passenger traffic might sound far-fetched, but experience with other novel modes of transportation suggests that it is achievable. For example, in Italy, the opening of the Milan–Bologna and Florence–Bologna high-speed-rail connections, in 2008 and 2009, contributed to the Bologna airport’s annual passenger-traffic growth rate of 7.0 percent—almost double the average of 3.7 percent in the country. The Bologna airport also significantly increased its market share among air passengers within its 200-kilometer-radius (about 125 miles) catchment area. With similar numbers, AAM vehicles could present an attractive opportunity for airports concerned about revenue growth.

Up in the air: How do consumers view advanced air mobility?

Airports need to integrate the aam opportunity into their planning.

Airport terminals and landside expansion projects are complex, multibillion-dollar undertakings. They require alignment among multiple stakeholders, as well as intense environmental assessments, feasibility studies, and many years of planning, assessment, and consultation before construction even starts. With first commercial AAM routes expected by the middle of the decade and scale-up anticipated near the end of the decade, airports must integrate these routes into their medium-term plans to make them future proof (Exhibit 2).

The challenges of doing so cannot be underestimated. Consider airspace needs. AAM vehicles, analogous to helicopters and drones, likely will require specific air-traffic-control (ATC) pathways and procedures that are independent from standard runway operations. Airports that don’t have sufficient capacity could reject AAM traffic altogether. Developing these procedures will take time, especially since there are still multiple uncertainties. For example, the performance characteristics of AAM are not yet sufficiently clear to produce specifications for airspace planning, and in the worst case could differ massively (for example, between aircraft using vectored thrust and multicopters).

On the ground, airport owners and operators must plan the location of AAM landing sites early, since they will require one to three acres of land. As noted earlier, these facilities will ideally be integrated into terminals if they are built at existing airports. If airports decide to create satellite vertiports to extend their reach, airports must plan where and when to develop them.

Finally, airports need to develop the infrastructure required to enable ultrafast high-power electric charging and hydrogen refueling. Many airports around the world are working toward electrifying ground-service equipment, such as pushback tractors, aircraft-fueling trucks, and baggage loaders.

An AAM agenda for airport CEOs

While several airports have recently announced partnerships in the AAM space, barely any of the top 50 major airports currently undertaking significant terminal and airfield expansions have explicitly stated that they are factoring in infrastructure for passenger AAM use cases. Although designing for an uncertain future is difficult, airports that hesitate to take action now could put themselves at a competitive disadvantage—and they might eventually have to spend more on infrastructure and other changes or risk losing opportunities. To stay ahead of the competition, airports should consider taking the following steps.

Consider the AAM opportunity now, defining how to integrate AAM flights into operations

Airports may hesitate to dedicate money to AAM, but experience shows that winners embrace innovation. Wellington Airport in New Zealand, for example, avoided most of the chaos experienced by airports in other countries when ridesharing became popular because its leaders specified in 2017 that the airport would create dedicated pickup and set-down space for ridesharing in exchange for a $3 fee for every ride. Similarly, some airports reached early agreements with governments and rail operators about the development of airport stations, which allowed them to decrease congestion and increase market share in their catchment areas. London’s Heathrow Airport, for example, operates the Heathrow Express as a subsidiary. The rail service transports more than 6 million passengers a year and achieves an annual revenue of around £120 million.

In addition to exploring passenger AAM now, airports should investigate cargo opportunities, since use cases in this area may gain traction earlier. Cargo AAM may also have many synergies with passenger AAM.

Weigh different business-model options

Airport operators should define their approach to AAM and create a business model based on one of the following options:

• Light touch. This model focuses on repurposing existing assets, such as business aviation terminals, and adding electric charging, hydrogen infrastructure, or both to accommodate AAM flights. Airports would invest in larger assets only when demand grows.
• Dedicated investment. Under this model, airports would set aside land and provide electric charging, hydrogen infrastructure, or both at terminals for AAM. They would also develop plans to integrate AAM travelers into the passenger flow through airports’ facilities.
• Betting on AAM. In addition to making dedicated investments in existing facilities, this model requires airports to codevelop and/ or operate vertiports in their catchment area, either as an owned business or as a service to third parties.

Set up a planning process based on codevelopment

To manage the AAM journey, airports can undertake a cooperative, staged approach. The first step would involve earmarking locations now and creating concept designs for AAM landing sites at their facilities. As AAM certification efforts continue, airport operators will have access to more robust performance data, as well as greater insight into operational concepts, both of which will allow them to create more detailed designs and specifications.

Airports could also band together to orchestrate discussions with OEMs and regulators on the future performance and infrastructure requirements of AAM vehicles. This collaboration will help them understand whether they can create standard infrastructure elements that will meet the needs of all operators or whether vehicle specifications are so different that customized facilities are needed. If the latter scenario appears likely, airports could strategize and plan for the challenge of developing an AAM landing site that could accommodate AAM providers with different vehicle dimensions, concepts of ground operations, and battery-charging or -swapping requirements.

Finally, airports need to get ATC authorities on board as early as possible. AAM promises to rewrite the rules concerning airspace around airports. For the past 50 years or so, airports have benefited from operating within restricted control zones. That might change as AAM grows, but current ATC rules do not offer a ready-to-use solution, such as the reservation of specific air corridors for AAM vehicles.

No time like the present

AAM vehicles are already well on their way out of science fiction books and toward commercial service. For airport operators and owners, with their need to plan two or three decades in advance, these vehicles are practically already here. Within the next two years or so, airport operators will inevitably find themselves in discussions on how to integrate new urban aircraft into their facilities, and indeed whether to turn AAM into an important new pillar of their business. The time to consider these challenges and embrace the potential opportunity is now.

Florian Brummer is an alumnus of McKinsey’s Munich office, Olivier Chéret is an associate partner in the Montreal office, Moira Goulmy is a senior expert in the Amsterdam office, and Robin Riedel is a partner in the San Francisco office.

The authors wish to thank Axel Esque, Benedikt Kloss, and Tore Johnston for their contributions to this article.

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