It is important for any company to understand the differences between operational planning and strategic planning, as the two terms often get confused for one another. While both types of planning are important for a business, they serve different purposes and require different approaches. Operational planning is concerned with ensuring the day-to-day activities of the organization are efficiently managed and resources are allocated to the right tasks. Strategic planning on the other hand, is focused on looking at the big picture, setting goals, and developing strategies to help the business to reach those goals. In this blog post, we will discuss the differences between operational planning and strategic planning, and why each type of planning is important for businesses. We will also explore the best practices for planning your business activities, and the steps you can take to ensure your business is successful.
What is strategic planning?
Strategic planning is the process of deciding what your long-term business goals are and figuring out how to get there. This entails assessing the current state of your company, estimating its potential for success, and deciding which particular projects you can complete to meet your objectives. Your operational plans for each year are influenced by the aspirations you decide to pursue during strategic planning. Depending on how accurate your research was, you might come up with a five-year strategic plan.
What is operational planning?
Making a thorough, short-term plan for your department’s business operations is the process of operational planning. Your business needs will determine how far in advance you plan your operations, but many managers opt to do so a year in advance. These plans can be used to determine the tasks your department completes each week, the project leaders, and the resources you’ll need to finish your projects.
Because it enables each employee to comprehend their specific responsibilities, how much time they have to complete their tasks, and how their actions contribute to the long-term goals of the company, developing an operational plan is frequently essential for business success.
Operational planning vs. strategic planning
Both operational planning and strategic planning can be used to direct the objectives and activities of a business, but each technique serves a different function. Here is a list of the differences between each strategy to help you understand what situations are best for each one:
Their purposes are distinct
A strategic plan can be used to determine how you want your company to stand out from rivals. This requires thinking about how to set your objectives, values, and visions apart from those of other companies in your industry. Operational planning’s goal is to increase the effectiveness and productivity of business operations at all levels.
Theyre created by different people
Strategic plans must be developed by you and the other high-level executive team members of your organization. When your strategic plans are finished, you might work with managers from your production team and human resources department so that they can distribute the plans to other employees. Managers from every division of the company decide how to enhance operations within their own division to create operational plans. Managers may consult with other department heads after developing operational plans to assess how the operations of one team impact other teams.
Their budgets are measured differently
Processes and guidelines for budget planning differ between operational and strategic plans. Your operational and strategic plan budgets are kept separate, and you may set up a new category of spending to make sure that you set aside money specifically for projects related to strategic planning. The budget for your operational plans is measured by analyzing the specific financial requirements of each department. Consider comparing each department’s operations to the objectives of your strategic plan if you need to reduce the amount of money a particular department spends. Then, keep the projects that will help you reach those objectives.
They plan for different amounts of time
You plan for different amounts of time when developing your strategic plans because they focus on more variables than operational ones. You can create strategic plans that categorize your company’s objectives for the next three to five years, depending on how in-depth your market research is. Your operational plans cover a shorter period of time, such as a single year or a segment of a sales cycle.
Their goals have different scopes
To ensure an organization succeeds, you might develop both types of plans, but your strategic plans have a much wider scope than your operational ones. You can use strategic plans to work toward company-wide objectives and determine which departmental projects could aid the company in achieving those objectives. Operational plans are more focused on the specifics that each department prioritizes while working on particular projects, which limits their scope. Thus, operational plans frequently focus on how to improve the organization, while strategic plans frequently highlight what you can do to do so.
They have different methods for reporting progress
After putting each plan into action, you can report on its progress, but each plan requires a different reporting process. Every three months or once a year, you could work with the executive team to assess how your strategic plans are impacting business performance. Team leaders and employees typically get together each month to discuss operational plans, recent changes, and potential areas for improvement. Due to the fact that departments frequently have operational plans for various project types, there may be several brief meetings where project participants can report their experiences and concerns.
They need to be revised at different rates
Every time you have a meeting to report progress, you might revise each plan. Every year, after analyzing the internal and external factors that affect your company’s success, you can update your strategic plans. Consider revising your operational plans more frequently, perhaps once a month. This is so that operational plans can be altered when unanticipated changes arise. Operational plans concentrate on numerous smaller projects with lots of details.
Operational plan example
Phillis is developing an operational strategy for Computer Inc.’s development division. She first chooses significant objectives she wants the department to accomplish and lists the projects that each team must complete in order to achieve those objectives. The people involved in each project, the deadline for each project, and the resources required to complete each task are all listed by Phillis along with the key performance indicators she uses to assess project performance. The first version of her operational plan might resemble this when she’s finished:
Strategic plan example
Phillip starts Computer Inc. by determining the organization’s vision, which consists of long-term objectives and aspirations for the company, before creating a strategic plan. Then he drafts the strategies he wants to prioritize over the subsequent three to five years, which might include work on issues like raising sales or enhancing quality. He then lists the annual goals for each department along with action items that staff members can concentrate on while finishing projects. The first version of Phillip’s strategic plan might resemble this once it is finished:
Differences between Strategic Planning and Operational Planning.
FAQ
What is the difference between operational and strategic?
Strategic planning focuses on achieving the long-term goals of business. On the other hand, operational planning is done to meet the company’s immediate goals. These are used to prioritize tasks and allocate resources in a way that advances the achievement of business objectives.
What are operations strategic planning?
Today, “operational” refers to something that makes things run more smoothly and necessitates constant monitoring, “Strategic” is a term used by top managers to describe longer-term, frequently less tangible, but still very important, plans.
