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What Is The Difference Between Strategic, Technical, and Operational Planning?

In the business environment planning is an essential activity typically performed by management to provide goals and objectives for the future. To fulfil these plans there are three schemes – strategic, technical, and operational, and for a business to thrive all three need to be implemented.

So, what is the difference between strategic, technical, and operational planning? Read on…

Strategic planning

The meaning of strategic planning is the process for achieving the vision of the business with long term planning carried out by top-level management. Defining direction and making decisions to allocate resources to pursue these strategies incorporates the whole business, rather than just an isolated unit.

Typically strategic choices are the foundational basis of the business looking at three to five years ahead, although some planning may be extended for much longer periods. Due to this time horizon, a strategic plan may be affected by uncertainties such as politics and changing economics, and will be beyond the control of management. These are known as strategic risks.

The tools used to determine factors of both the internal and external environment include analysis of strength, weakness, opportunities, and threat – known as SWOT analysis, and political, economic, social, and technological environment referred to as PEST.

Tactical planning

A tactical plan describes what organisational process will be used to achieve the ambitions outlined in the strategic plan. It’s generally a short term option and breaks down the strategic plan into more manageable pieces. Tactical plans are usually developed in areas of marketing, personnel, finance, and production with guidelines as to what individual sectors must do to be successful during the following year.

These objectives are mainly covered by moderate uncertainties, so results are closer to management control by comparison to strategic planning. Uncertainties may include increases in shipping prices and energy consumption, for example, and these are known as tactical risks.

Operational planning

Operational planning is a process of deciding in advance what needs to be done to achieve the tactical objectives of the business. It’s a short-term plan that changes each year with a narrow scope that plans the routine activities of the business and can include policy, rules, and procedures.

Middle-level management often performs the operational planning process where the organisation is classified into various departments, divisions, or units. Features of operational planning include clearly defined objectives to achieve the desired result, decisions made on activities to be performed to maintain quality standards, and performance measurement.

Operational risks may arise from personnel, systems, and processes through which a business operates. These can also potentially arise from fraud, legal, or environmental risks such as man-made or natural hazards.

Conclusive data

Despite their differences, strategic, tactical, and operational planning are all vital assets within a business organisation. A strong strategic plan will provide purpose and direction, resulting in the ability to implement tactical changes. This, in turn, will lead to a vision that enables strong daily operational plans.

Need an independent financial advisor in London?

If you don’t have the necessary experience to implement the three stages of business planning why not consider hiring a financial advisor in London? You’ll get help and advice with setting goals that will be realistic to achieve, building plans that meet financial goals, and professional assistance with running your business effectively.

Knowing the advantages of a cash flow forecast will also be covered in order to understand a clear picture of the probable future of your business under different conditions. This guide will give you knowledge of two valuable financial metrics – profits and cash flow, which will be imperative in the daily organisation of your business.

You’ll save yourself time, minimise stress, and be confident in carrying out the three main planning processes to ensure your business successfully grows.