Question

Hi, with reference to Operational Plan Preparation, what documentation would you need to help? I was thinking about Financial, Administrative & HR Policies as well as Admin and Financial Procedures.

Could you comment please and make suggestions.

Also, with one of those documents could you demonstrate improvements you wish to achieve, strategy to achieve improvements and KPI's. eg With the administrative policy I would have one of my objectives to increase market penetration everyy quarter and the Financial policy an objective would be to lower the cost of service delivery by 1% quarterly.

Many thanks

Answer 1

While preparing for Operational Plan, the objective should be clear.

For example here in this assignment;

# the Administrative Policy "Objective" is to increase market penetration (every Quarter) and

# Financial Policy "Objective" is to lower the cost of service delivery by 1% (Quarterly).

The objectives can be achieved separately using Linear Programming methods (in Excel - Solver, SAS or other LP Tools) by defining the Objective function, Changing the Variables and setting constrains.

Once the objectives achieved, a trade off can help in setting the final goal.

Alternate solution can be little bit complex through Multi Objective Optimization.

Once objectives are achieved mathematically, the documentation can be drafted around the same.

Some dynamic parameters and scenarios can further be introduced to substantiate the outcome of Objective function.

As we are setting the Operation Plan and the strategy to achieve and improve the KPIs; while assigning the ownership of the KPI, it is must to review that only those parameters should be included in metric KPI of Incharge Person which can be controlled by him. A regular review and improvement of individual KPI and help achieve the organizational goal.

Now again coming to the objective functions.

# the Administrative Policy "Objective" is to increase market penetration (every Quarter) and

The objective here is maximizing Market Penetration. So Cost variables can be Product (plus markup) Cost, Channel Cost, Manpower Cost etc. Constrains can be Market Size, Channel Partner's Financial condition (to invest in our product), Our Overhead (that can be borne by us).

Similarly;

# Financial Policy "Objective" is to lower the cost of service delivery by 1% (Quarterly).

Here objective is Delivery Cost minimization, variables are Manpower Cost, Service (as Product) Cost, Overhead Cost. Constrains can be Man Hour, Project Timeline (Milestones) etc.

Based on the same, we can equate the solution and achieve to the goal.

Thanks!!!