Operations Plans: Definition, Importance and Differences

By Indeed Editorial Team

Published 24 November 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Businesses use productivity tools like operations plans to lay out their objectives, specify expectations and set realistic deadlines. Unlike long-term strategic plans, these plans allow companies to devise and implement successful and effective operational strategies that can prepare teams and employees for short-term projects or tasks. If you're interested in pursuing executive, leadership or project management roles, you can benefit from learning how operating plans work to help the organisation and improve team productivity. In this article, we explain what these plans are, discuss their significance, outline their differences from strategic plans and share steps to develop an operations plan.

What are operations plans?

The operations plans are a detailed document that clearly outlines the projects and activities of a company to ensure that it achieves its set goals and objectives. This plan considers the overall goals and objectives of the company, but it usually focuses on a particular department or team. An operational plan describes the priority of the department for a defined period, typically a year. These plans are essential in determining the daily and monthly tasks of the various teams in a company.

Operational plans also ensure that team members are aware of their responsibilities or they can clearly specify roles and duties for a department to follow. It can include deadlines, weekly tasks, budgeting details and steps for quality assurance and testing. Operational plans are more short-term in nature and provide information on the immediate goals and actions that the organisation can take to achieve them. Here are some areas that an operational plan covers:

  • tasks or target milestones to accomplish

  • strategies and plans for execution to complete tasks and achieve targets

  • key decision makers and the individuals assigned to each task or duty

  • project or task deadlines and expected completion time

  • budget forecast and financial costs projection for the period

Related: What Does a Planning Manager Do? (Roles, Skills and Tips)

Benefits of an operating plan

Review the following benefits of an operating plan so you can implement them effectively:

Provides clarity

Deploying operational plans allows you to have a clear outline of what's expected of the various members of a department or organisation. This means that team members often understand exactly what their responsibilities are, when the due dates for their tasks are and who to contact if they require assistance. A detailed operational plan can help you identify any bottlenecks and think of solutions to streamline the existing workflow.

Improves monitoring

These plans allow managers and teams to make minor and useful changes to everyday schedules and activities, which helps them to easily identify areas that require improvement. By recording their goals and actions in an operations plan, teams have clear expectations of their responsibilities and tasks. This allows them to accurately monitor and address any inefficiencies in the workflow.

Encourages teamwork

Operating plans and strategies can help direct teams and provide guidance on how they interact with others, collaborate on tasks and facilitate teamwork. It motivates employees to work together to complete assignments and help each other achieve their individual objectives and the team's key performance indicators. This aids in ensuring mutual accountability throughout the organisation.

Mitigates risks

An operational plan helps the organisation better manage different business scenarios and mitigate risk. It can outline emergency response or include a contingency plan with detailed roles and responsibilities in the event of challenging scenarios. An operational plan provides clear guidelines on processes, procedures and resource allocation, which improves efficiency and helps reduce unnecessary risks to business operations.

Ensures sustainability

Operational plans give an organisation better control over its finances as it can track and monitor teams and operations. This can provide critical insight into productivity and efficiency, which can help the organisation deploy underperforming assets and labour to more profitable activities. Managers can use operational plans to implement strategies that can improve overall output and spur growth, which also ensures the organisation's long-term sustainability.

Operations plan vs. strategic plan

Learning about the differences between an operations plan and strategic plan can enable you to understand how to help the organisation achieve its business goals efficiently. Here are the key differences:

Time frame

Operational plans handle current to short-term initiatives that can benefit a specific team or department but still support the broader strategic goals and objectives of the company. For instance, the marketing department might plan to achieve the operational goal of enrolling existing customers into a loyalty programme by the quarter. Operational plans can help leaders analyse important department activities, delegate responsibilities, monitor their team's progress and implement measures to help them complete their tasks successfully.

Conversely, strategic plans outline long-term goals and the company-wide strategy to achieve said goals. For example, strategic plans can account for a longer time horizon and may require management to consider the company's business goals in three to five years for example. Strategic plans can revolve around an organisation's targeted market share or completing significant projects within a certain time.

Related: A Complete Guide to Developing a Strategic Planning List

Scope

Strategic plans are broader in nature and usually encompass the entire organisation, covering multiple departments and teams. Leadership and management meet periodically to outline the broader strategic goals for the organisation and discuss the teams' and employees' progress towards achieving them. For example, a strategic plan might specify a goal to cut operating expenses by 10% over the next year. This allows management and key decision-makers to discuss and review measures that can help the organisation achieve its goal.

Operational plans are more specific in scope and often cover the duties, goals and allocation of responsibilities for a single team or department. They're more procedure-oriented and can involve improving a particular process or changing the workflow of a specific operation. For instance, it may include plans to reduce overhead costs by 15% per quarter. The organisation's property and facilities team may choose to consolidate operations to a single location and save on rent and utilities.

Flexibility

Since operations plans are usually for short-term goals, they may be subject to changes in market trends or business conditions. Department heads and managers may review their operational goals frequently to ensure they're feasible and up to date with industry demand and market preferences. For instance, a software service provider may have an operational goal to increase the cadence of application updates to a monthly release. Managers may discuss with the team if they can meet the requirements and change the operational goals if necessary.

Strategic plans reflect an organisation's mission and vision. As such, they typically remain consistent regardless of market changes. Strategic plans provide clear directions on broad organisational goals which are critical to long-term business continuity and stability. Company management and leaders may decide to modify details like the time frame of certain strategic goals, but generally refrain from making any major changes. This allows employees and teams to work confidently towards achieving their operational goals and continue to help support the organisation in accomplishing its strategic mission and plans.

Related: What Is Strategic Planning? With Benefits and Tips

Level

Since operational goals typically involve a single department or team, it's often the manager's or team leader's responsibility to develop operational plans to achieve those goals. They may delegate specific responsibilities to team members with the relevant expertise and capabilities to perform tasks accordingly. For instance, the manager of the warehousing team may set an operational goal to reduce wastage and delegate this responsibility to a waste management specialist. This individual may not be part of the company's leadership team, but works under the manager's supervision to complete this objective.

Alternatively, an organisation's leadership team or board of directors sets strategic plans. They may discuss the strategic direction and goals during regular company meetings with investors or shareholders, if applicable. This can include expanding to a new region within a time period, which may require input and collaboration from directors of the marketing and sales department.

Related: What Is Level 5 Leadership? (With Definition and Examples)

How to develop an operations plan

Follow the steps below and learn how to develop an operations plan for the organisation:

1. Outline a strategic plan

Since strategic plans are long term in nature, you can use them to help you craft your operational goals and plan. You may want to break down the wider goals into actionable task items and set relevant targets. This can make the goals more practical and allow the team to determine the best steps to accomplish their tasks.

2. Set goals and objectives

An operational plan's primary objective is to provide specific steps to achieve the department's or team's goals and objectives. It contains key milestones, project deliverables and objectives that allow you to track the team's progress. When setting operational goals, remember to describe the task, specify the people in charge and include any applicable timelines.

Related: SMART Goals: Definition, Template and Examples

3. Plan the budget and resources

Consider the supplies, equipment, funding and resources you require to achieve the goals and objectives in your business operation plan. Brief your team so that they can comply with your requirements and expectations. Then, you can plan the budget to ensure teams and employees receive support and resources to complete projects successfully. It also allows you to delegate tasks accordingly and choose accurate timelines for the team.

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