BSBMGT517 Manage operational plan Learner Guide P a g e | 2 Research, analyse and document resource.

BSBMGT517
Manage operational
plan
Learner Guide
P a g e | 2
Research, analyse and document resource requirements and develop an
operational plan in consultation with relevant personnel, colleagues and
specialist resource managers
What is an operational plan?
An operational plan is derived from the strategic plan of the organisation and is a detailed plan to
accomplish the objectives of the organisation.
An operational plan is essential to implement successfully. Failure to do so could lead to the failure
of the action and monitoring plans.
To ensure that the operational plan is successful, your team should:
➢ Raise funds – this requires that you are very clear
on what resources you need and have the ability
to convince your investors for a successful
completion of your project
➢ Allocate resources to fill gaps and needs
➢ Clearly identify your resource requirements and
your ability to fill the gap
➢ Have contingencies plan to minimise risk
➢ What is the length of the project and how can you
sustain it?
An Operational Plan does not usually exist alone, rather the key
components are integrated together to form the Strategic Plan.
The key components of an operational plan include:
➢ Estimate of project lifespan, sustainability and exit strategy
➢ How long will this project last, when and how will you complete the project? How
can the project be sustained?
➢ Financial resource requirements
➢ How much money is needed to fund the project, your current sources of income
and potential sources of income, what funds you need and any gaps in funding that
you identified
➢ Human resource and other capacity requirements
➢ Determine the capacity and skills of the human resources currently available to
complete a project. Consider where the sources of these resources will come from.
What other requirements are needed to implement the project
➢ Risk assessment and mitigation strategy
➢ What risks may be addressed and what are they?
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Strategic planning is the process in which an organisation defines its strategy, whereas an
operational plan defines the short term methods of achieving the strategic plans.
Strategic planning is proactive and often spans years. Conversely the operational plan is also
proactive but can change to meet the organisation’s current requirements. Operational plans last 1-
three years and are considered short term.
When you write a strategic plan, you need to ask:
➢ What do we do?
➢ Who are we doing it for?
➢ How will we be successful?
On the other hand, when you write an operational plan, you need to be able to answer:
➢ Where are we now?
➢ What do we want to be?
➢ How do we get there?
➢ What method/s can we use to measure our progress?
Operational plans will contain the following details:
➢ Organisational structure
➢ Current and future desired goals
➢ Who are the suppliers?
➢ How many staff are required?
➢ Facilities
➢ Production and manufacturing
➢ Inventory
➢ Distribution
➢ Maintenance and service including
customer service
➢ Labour
➢ Quality Assurance, such as how is performance measured?
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For an operational plan to be effective, it must:
➢ Have clear goals, procedures, objectives, schedules and budgets
➢ Performance target
➢ Timeframes
➢ Contingency plans
➢ Responsibilities
➢ Strong cohesive teams
“A leader is the organisation’s top strategist, systematically envisioning the future and specifically
mapping out how to get there.” As a part of the creative thinking process, and to take advantage of
the skills, knowledge and experience of your team, it is important to let them participate in the
decision making process. If they can see their contributions acknowledged, then they will take
ownership of the project.
Relevant personnel, colleagues and specialist resource managers may include:
➢ Employees at the same level or more senior managers
➢ Managers
➢ Occupational health and safety committee/s and other people with specialist
responsibilities
➢ Supervisors
➢ Union or employee representatives.
Ask staff and relevant parties to participate in weekly meetings presenting their ideas, feedback and
any prospects. Acknowledge their contributions and encouragement. Planning is an important part
of the process. Every staff member must come to the meeting prepared and with ideas. Make sure
your team understands the importance of meeting the goals.
Research, analyse and document resource requirements
It is essential to that all goals and objectives continue on from the strategic plan and build the
requirements to ensure that your plans are effective. In each step of the process, you must ensure
that you have the required resources to meet the required goals.
Resource requirements may include:
➢ Goods and services to be purchased and ordered
➢ Human, physical and financial resources – both current and projected
➢ Stock requirements and requisitions.
Based on your budget, teams will be allocated sufficiently to meet their goals. At times, if control is
not maintained on the allocation of resources, then team members’ ability to meet their end needs
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will be affected. To ensure that resources are correctly allocated, a detailed plan needs to be
completed so that individuals can complete their prescribed tasks in a timely manner.
When determining actions, you must be able the following questions:
To answer these questions you should question the team members and stakeholders who would be
in a place where they would know the answers to each question. In dealing with operational
concerns and the allocation of human resources, you should research any staff problems.
For example:
You may be required to demonstrate these answers on a spreadsheet.
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PROJECTED INCOME SUMMARY

YEAR 1

YEAR 2

YEAR 3

Sales Forecast

Minus Cost of Goods Sold

Equals Gross Profit Margin

Subtract Total Operating Expenses

Subtract Depreciation

Equals Net Income Before Tax

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Develop and/or implement consultation processes as an integral part of the operational planning
process
Consultation is the process where you gather information from both internal and external personnel
to ensure that you can make an informed decision. Consultation is a key principle in ensuring that
your organisation has a sound planning and decision-making process.
For consultation to be effective, you must start consulting early in the process. Consulting requires
that all parties are honest, open and committed to the project. Consulting when performed this way
will assist in enhancing relationships between all parties. If you use manipulation in the consultation
process, the process will fail.
The consultation method you use will vary depending on the goal and outcome and will range from
mere discussion through to participatory decision-making. The method that you use should be based
on the input from your key informants and stakeholders who understand how best to involve the
personnel interested in a potential decision making process.
In large organisations, the consultation process is established by management and the supervisors
are responsible for implementing the processes and employees are responsible for actively
participating in the consultative process. These processes may be more formalised than having
informal sessions between parties. This may however be sufficient in smaller organisations.
Make sure that you familiarise yourself with the processes and procedures in place in your
organisation. You may even be required to consult with stakeholders in different ways. For example,
a manager that moves around as part of their position may not be available very often. To ensure
that he obtains your message, you may need to send him/her an email. Conversely, another
manager in the same position may prefer that you call him/her so that he can consult with you on a
personal level.
An organisation may have a survey tool that is used during the consultation process to maintain a
record of feedback that can be utilised to improve processes. The tool, may be in the form of a
questionnaire or a survey that can identify problems with processes and/or procedures.
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Consultation processes may refer to:
➢ Email/intranet communications
Email and intranet may be utilised as a paper trail
as a form of quality assurance. Some
organisations may use emails to identify ways in
which to improve processes. It can also be used
to ensure that the same message reaches all staff
and staff have an opportunity to respond,
thereby contributing to the plans
➢ Newsletters
Newsletters provide staff with information about plans and may provide staff with
opportunities to respond
➢ Other processes and devices
Surveys, questionnaires and informal sessions may be used to encourage staff to
respond to the consultation process by providing specific feedback about the
operational plans
➢ Meetings
Meetings may be either formal and/or informal. Informal meetings can be at any
time at any place. Formal meetings can be in a more controlled environment where
feedback is sought
➢ Interviews
An interview is usually between two or more people. Structured interviews provide
management with answers to specific questions that can provide feedback in
relation to specific aspects on the operational plan
➢ Brainstorming sessions
Brainstorming sessions are used to generate new ideas and solutions. It should not
be used for analysis or decision making. The ideas and solutions given should be
analysed and judged to ascertain their relevance. To obtain the most out of the
feedback session, you must ensure that you take the time to acknowledge all
participants for their efforts. If you do not acknowledge them, they may not
participate so openly again.
Consultation is an ongoing process that should provide you with feedback in the shape of new
ideas and different ways of thought.
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Feedback
Feedback is the process in which part of the output of a system is returned to its input in order to
regulate more output. Once you have gathered both the formal and/or informal information, you
should review it and select any ideas of value to the planning process.
Formal feedback is usually specific so can be more rigorous, thus may have timelines that you need
to be aware of. Keep to the deadlines because they may have been developed to ensure some part
of the process is enhanced. This means that you should set goals that you should adhere to.
Once you have made a decision in regards to the feedback, it is important to make sure that it is
communicated to the appropriate stakeholders. Make sure that all and anybody who participated in
the process also receives a response. It is only when feedback flows from the source to the
stakeholders that feedback becomes effective. When your stakeholders see the positive effects of
the feedback they have offered they will probably be more prone to make contributions to quality
and service in the next meeting. However, if there is no response to their feedback they will
probably be reluctant to contribute in meetings.
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Ensure the operational plan includes key performance indicators to measure
organisational performance
Key Performance Indicators (KPIs) will assist you in the planning
process. They will provide you with quantifiable measurements that
will reflect the success factors of the organisation. To be successful,
KPIs must reflect the organisation’s goals, they must be to the
organisation’s success, and they must be quantifiable.
KPIs to reflect organisational goals
If an organisation’s goal is to “obtain a five percent increase in our
market” they will have key performance indicators to not only increase
profit, but also to increase sales and/or service. These KPIs reflect the
organisation’s performance and gives staff a target to work towards.
KPIs to be quantifiable
If a KPI is not quantifiable, it is useless. KPIs such as “increase sales” or “increase customer
retention” need to specify an amount. Instead of increase sales, you could have increase sales by
five percent or increase customer retention by seven percent.
Even though you set targets for the key performance indicator, it does not make them the key to the
success of the organisation. Limit the KPIs to the specific goals that will lead to the organisation’s
goals. To ensure that your focus remains on the organisation, do not have too many KPIs.
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How to write a Key Performance Indicator
The operational plan will usually contain a list of key priority areas for the coming area. Actions and
strategies will usually address these priority areas. This is where the KPIs start.
➢ Once a manager has formulated the department’s objectives in line with its vision,
mission, strategies and objectives.
➢ KPIs have four components which are the:
o Objective that tells what you aim to do.
Example: To increase sales
o Measurement is the measurement we
use. Example: Sales growth
o Target is what we want to achieve and
when. Example: increase sales growth
by 20% in 2011
o Initiatives is a set of all of the above
actions, Example: (a)To increase sale (b) growth (c) by 20% in 2011
➢ These KPIs should be passed to their appropriate subordinates
➢ The KPI is then monitored usually directly by the manager to ensure that the KPIs
have been met.
Achievement of the KPI can be rated into scales:
Example:
3 = Exceeds requirements
2 = Meets requirements
1 = Not meet requirements
0 = Unsatisfactory.
Achievement of the KPI is used by management to give rewards such as bonuses, yearly
incremental and promotion of his subordinates.
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Develop and implement contingency plans for the operational plan
Irrespective of how much you plan, something will always occur so your plans may not go as
planned. Assumptions are never precise so when you make an assumption about the market, you
may find that unforeseeable events can have an impact on their accuracy. When problems like this
occur, you need to have plans that can be used when an original plan does not work.
These plans are called contingency plans. A contingency plan is simply a secondary or alternative
plan that can be implemented when the original plan fails. These plans allow businesses and other
entities to adjust as the circumstances change and you remain in operation. Most organisations have
several contingency plans geared to fast responses in areas of operation.
Steps for creating a contingency plan
Contingency plans should be written by a subject matter expert who is the closest to the system and
who has the best knowledge of the subject and thus are suited to writing the contingency plan. The
aims of the leader are to train, to set deadlines, to mentor and promote enthusiasm.
To create a contingency plan, you need to:
➢ Identify your needs
➢ Complete an impact assessment
➢ Select suitable measures and control
➢ Develop recovery strategies
➢ Build the plan
➢ Test, train and maintain.
Identify your needs
Examine your organisation so you can make sure the plan you develop is one that is actually needed.
Use your organisation’s contingency plan policy to assist you in identifying whether or not a
contingency plan is required.
If the organisation does not have one, develop one by:
➢ Writing the objectives of the contingency plan
➢ Stating who is responsible for the development, maintenance and implementation
of the plan
➢ Asking what is the scope of the plan including which departments participate in the
execution of the plan?
➢ Asking how you will review the plan
➢ Asking what resources, testing and training is involved in the plan?
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➢ Deciding how the plan will be maintained, backed up and stored.
Before a plan can be created, it is important to know what is at stake. This means that you should
have a clear understanding of the value of the resources used; the level of risk in targeting resources
incorrectly and how you can minimise the risk. An impact assessment can assist you in establishing
the level of risk and a hierarchy that the contingency plan will address.
Impact assessment
To create an impact assessment, you should:
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Select measures and controls
Once you identify the impact that disruptions can have, you should consider preventative measures.
Prevention is better than a cure. This will end up as a cost assessment.
Develop recovery strategies
There are four avenues that you can take. They are:
1. Transfer the risk to another
party
The other party may be in a
better position to resolve the
problem
2. Avoid the risk
Identify the risk and identify
what steps you could take
that will have the least impact
to the business
3. Reduce the negative impact
of the risk
Look at ways in which you can
reduce the negative impact
and identify ways in which
you can minimise cost
4. Accept some or all of the consequences of the risk
Sometimes avoiding the risk and reducing the negative impact of the risk are not
viable. Sometimes you may need to take on some of the consequences to keep
operating.
Build the plan
Once you have identified the levels of risk, it is essential that you determine how to best service the
plan by identifying contingencies. Costs play a part of the plan so it is important to make sure that
any contingencies stay within the budget set.
Test, train and maintain
Make sure that all staff are ready for any contingency. This means that you may need to test the
contingency and to train your staff to ensure that the plan runs smoothly.
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Contingency plans may include:
➢ Contracting out or outsourcing human resources and other functions or tasks
Some organisations contract out to cut costs, to obtain a person with specific skills,
knowledge and experience, lack of space or lack of a resource. Some organisations
even outsource for when an internal function stops working
➢ Diversification of outcomes
Some outcomes rely on several departments as part of the final process. The
spreading of outcomes can increase productivity as more staff becomes a part of
the final processes
➢ Finding cheaper or lower quality raw materials and consumables
A globalised market is a more competitive market. This means that when you shop
around you will find materials and consumables within the organisation’s budget
➢ Increasing sales or production
Improving sales or production may require an increase in the customer service skills
of your staff. This can be completed by training, mentoring programs. When would
the staff need to have the required skills and what skills would they require?
➢ Recycling and re-using
Consumer awareness has increased and customers have become more informed
due to the internet. As a part of this awareness customers believe that an
organisation has a corporate social responsibility to the environment. As a part of
that responsibility some customers prefer to see the recycling and re-using of the
resources. In turn, they prefer to buy from consciously aware companies
➢ Rental, hire purchase or alternative means of procurement of required materials,
equipment and stock
Rather than buying the equipment or outsourcing, organisations
rent or negotiate to save on costs
➢ Restructuring of organisation to reduce labour costs
There will be times when an organisation will downsize. The
reasons for this will vary. For example, your product and/or
service may no longer be in demand so the organisation may not
sell as many units
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➢ Risk identification, assessment and management processes
A rise in injuries due to a rise in hazards and risks that can cause accidents can end
up putting a huge dent in any organisation’s budget. If the risk assessments are not
working, clear contingencies might be needed to motivate staff to come up with
ideas to minimise the risk
➢ Seeking further funding
There may be times when the funds allocated to your department are not sufficient
to meet the future desired goals. To meet these goals, it is essential that you seek
further funding
➢ Strategies for reducing costs, wastage, stock or consumables
If you exceed your budget, you should take steps to reduce costs. This could be
done by finding a supplier who can produce your materials with lower prices
➢ Succession planning
Succession planning is the process whereby an organisation makes sure that the
employees are recruited and developed to fill key roles within the organisation.
When you write contingency plans for the above areas, make sure that your plan is measureable
and reflects the organisation’s goals.
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Ensure the development and presentation of proposals for resource
requirements is supported by a variety of information sources and seeks
specialist advice as required
Targets in the strategic plan can only be reached when organisational
activities are completed to implement the operational plan. Each task
that is performed requires the use of resources. These resources
include human resources, capital resources and financial resources. The
tasks must be performed within the budget allocated for the task.
If you identify the need for more funds, you should be prepared to raise
the funds. To raise more funds, you have to be able to demonstrate to
senior management and the stakeholders investing in the initiative that
you require the money more than another department and that they
will receive a return in investment.
Develop a business proposal
One of the defining features of a business proposal is your ability to sell it to your stakeholders. They
control the amount of budget that you need. To obtain a larger slice of the budget, you must be able
to demonstrate that your actions not only align with the strategic goals of the organisation, but also
will ensure that the actions undertaken will give the stakeholders a larger return in investment –
either monetary or through higher customer retention.
In short, you must be able to justify why you should be allocated a larger slice of the budget. To
develop a business proposal, you must never lose sight of what your client needs. If you concentrate
solely on what you believe the client needs, rather than what they actually need, say goodbye to
your budget and maybe your ability to meet your organisational goals.
To write a winning business proposal, you need to make sure that you:
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Identify strategic goals
Focus on your client’s needs and then determine the best solution
for it. At this stage you should provide your stakeholders with
detailed costing and statement on resources to show your
requirements. Make sure that these details refer back to the
strategic plan. Stakeholders must see a connection between your
resource requirements and the organisation’s strategic goals.
Alternative strategies should also be addressed in the proposal. Your
stakeholder must see that you have considered different
contingencies in the case that your original plans need to be varied
due to either internal or external pressures.
Once you have the examined the strategic goals and the alternatives, you must look at them from
four different angles. With each angle, you must identify how you can influence the stakeholders to
allocate the funds to you. This can be done by:
➢ Using a marketing strategy to increase the organisation’s market share, reduce
overheads and marketing of the product line. In turn, these actions will increase the
productivity of the organisation
➢ Using a human resource strategy to improve staff skills
➢ Using a management strategy whereby staff morale is increased through enhancing
the morale of the employee. A happy employee will increase turnover and change
consumer attitudes on a brand
➢ Using a technological strategy to increase productivity.
Prioritise strategic goals
Prioritise the strategic goals and place them in a realistic timeline. They should have all of the
activities required to complete the goal listed, including staffing level required and costs, both
internal and external. Gain confidence from the assessment panel which usually comprises of Senior
Management by demonstrating that you have researched the proposal by putting together
contingency and risk management plans to demonstrate that you have considered what options you
would need to take in the case some aspect of the plan went wrong.
Conclusion
One of the biggest mistakes that a proposal writer can make is to concentrate solely on the end
product. Make a clear connection on why your proposal is better than any other department/ team/
section. If you want to have a larger slice of the budget that has been allocated, you must make the
connection between your strategic goals, the benefits to the organisation and what the organisation
will get out of it.
To further enhance your standing, make the effort to seek specialist advice. Do not constrain your
proposal to historical evidence. What worked last year, does not necessarily mean it will work this
year.
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For example:
Last year the economy was slow, spending was down so in effect sales were down. To increase sales,
your department may have trained staff to increase the level of customer service. This year, spend
has increased as the economy starts to move. Retraining staff in the same way is a waste of
resources. Instead provide them with mentors or coaches to increase performance. Reward them
and acknowledge their performance. It would save money and demonstrate that you are being
responsive to the market.
Specialist advice can come from many sources such as:
➢ Managers
➢ Financial consultants
➢ Marketing experts
➢ Accountants
➢ Suppliers
➢ Internal and external customers
➢ The sales team.
Internal and external customers have opinions. If your goals relate to the product then consider their
feedback. They are the ones that will buy the product and/or service and benefit from it.
Presenting the proposal
As a part of obtaining approval for a proposal you may have to present it to the relevant parties
which usually include stakeholders and senior management, committees or individuals. These
people are very busy so when you present the information to them, choose your method carefully.
You may only have a few minutes to explain and demonstrate what your proposal is about. The
information you provide can garner their interest or break it.
Make sure that during the presentation that you also provide them with a copy of the proposal. This
provides them with the opportunity to read your proposal and will assist in the final decision in
regards to the allocation of funds.
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To present the information you could use:
➢ A power point presentation with all of the key points of the proposal
➢ The use of graphs to demonstrate costs and savings
from previous years
➢ Contingency plans and risk management plans and
when they would be used and their impact on the
proposal
➢ Strategies you considered and why you did not present
them – these can also be operational plans to support
the strategic plans
➢ Conclusions with the use of facts from your research.
In each step of your presentation, reinforce the organisations strategic goals, and the benefit of
the proposal to the organisation.
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Obtain approval for the plan from relevant parties and explain the plan to
relevant work teams
We have already established that the relevant parties to acceptance/ rejection or re-allocation of
the budget funds from the organisation usually vests with the stakeholders and senior management,
committees or individuals. The size and scope of the proposal will vary according to where you are
trying to obtain the budget from and the importance of your proposal. Once you have presented the
proposal, you must await approval.
Approval for the presentation where you are applying
for funds from your Head of Department may require
a mere nod from senior management for example or
in larger organisations, you may need to wait for the
parties to review the plan before recommending it to
the governing body who may then approve or reject
it.
Once you have gained approval for the proposal, you
should stay as close to the timeline as possible within
the approved budget. To get your team members and
work colleagues to work as a unit, you need to work
in consultation with them. Previous studies have
demonstrated that individuals will take ownership of
their activities if they are contributing to them. This is
giving the team empowerment by increasing their
confidence in their own capabilities.
In the book ‘Empowerment Takes More than a Minute’, Blanchard, Carlos and Randolph state that
there are three keys that organisations can use to effectively open the knowledge, experience and
motivation of team. They are to:
Share information
By sharing information, you are opening the doors towards feedback. In sharing information, you are
giving them a clear picture of the organisation and its current situation. By building trust, you are
building a foundation for your teams.
Create autonomy through boundaries
Individuals know their jobs. So who better to consult with than the people that do the job. This does
not mean that you should not consult through different avenues, such as talking to an engineer
about changing systems to improve product quality at the suggestion of a team member.
To keep the doors to sharing information open, make sure that you provide the team member with
feedback. If the suggestion is not viable, let them know. It demonstrates that you are listening to
them and taking their suggestions into consideration. This in turn builds their confidence.
Create self-managed teams
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A team is a group of people linked in a common purpose. In self-managed teams, as a Manager you
should use your proposal to define the goals, methods and functioning of a team. Once you have
provided the team with the information, you delegate the responsibility and decision-making
authority to the team itself, with the hope that the group will make better decisions than the
individual. Decisions must be made by consensus to be successful. Consensus not only seeks the
agreement of most of the participants in the team, it resolves any objections that may arise.
In your position of manager, it is important that you are aware of all aspects of the team’s decisions.
You can do this in consultation with the team. For example, they may have an unresolved issue. They
come