The Value of Detailed Operational Planning
By Kevin Hsu - Nov 11, 2016
Creating a comprehensive operational plan can be a rather daunting task for business owners who are already spending a lot of precious time and energy focusing on the final profit and loss (P&L), balance sheet, and cash flow statement. When thinking about budgeting and planning, these things tend to receive more attention, while operational planning can seem like just another thing lingering at the bottom of one’s to-do list. However, understanding the operational side of your business is essential in ensuring that all areas of your business are being targeted in a constructive way.
The purpose of operational planning is to outline, in detail, your business’s operation and future growth projections in order to achieve tactical objectives. Let’s think of your operational plan like an orienteering map — something that helps your team easily navigate its way to success, while also steering you through any obstacles or unexpected hurdles that may come your way.
Elements of Operational Planning
When working with operational metrics to drive your business, it usually varies by industry. An example of this can be drawn from manufacturing companies whose metrics are directly driven by production output, commodity prices, and customer channels…just to name a few.
When the efforts around incorporating operational data into a budgeting and planning process resides primarily in spreadsheets, the process itself becomes exceptionally difficult. The level of detail inherent in the operating data (i.e. daily, weekly, location, customer) can often translate to a nightmare in the spreadsheet world. Many customers I speak with face this challenge and spend much of their days and weeks trying to consolidate and process data together into a single plan. This tiring work results in spreadsheets that can easily grow to be 100’s of MB. Furthermore, the inability to modify these mega spreadsheets in the moment — without risking breaking all the links or data feeds — can limit how quickly and efficiently your business can adapt.
Solutions for Operational Planning
Companies today are seeking solutions that not only provide planning capabilities for the financial side of their business, but also that tie across to their operational plans as well. Business owners who understand the importance of this type of planning are utilizing a number of forms of operational management.
For many years, Kepion has prioritized providing our customers with a collaborative real-time solution to accelerate your business’s S&OP process maturity and align your supply and demand decisions into a single unified process. Our Sales and Operations Planning software takes the spreadsheet difficulty away, and allows your business’s operational plan to immediately balance supply and demand in real-time at the aggregate or detailed levels and run transparent business rules that directly show impact on the full P&L. Our Sales and Operations Planning software provides the capabilities of conducting “what-if” scenarios in response to unexpected or unplanned events and then determines the best course of action.
In addition, our Sales and Operations Planning software provides a closed-loop process for integrating plans across Finance, Sales and Marketing, allowing you to collaborate with trade partners like suppliers, distributors and customers in one place. For the smart business owner, it is the most effective way to take control of their operational management.
Kepion + Power BI
Conduct What-if Analysis & Planning with Power BI & Kepion.