This article relates to tactical planning and control in your business and the business decision you are making with regard to your business dealing on a daily basis whether it is the supply chain, staffing, strategical, tactical, operational and marketing related.
You are making important and relevant decisions in your business that impact the running of your business and these decisions are strategical, tactical, operational and enable you to control operation and implement systems in your business.
The three levels of managerial activities highlighted in the infographic triangle above are important in the way organisations take and understanding decisions (Antony, 1965). These are strategic planning, tactical planning and control, and operational and control.
Strategic Planning
Strategic planning deals mainly with broad issues concerning the development of a business in the long-term. The activity of planning may involve decisions on what market to move into, whether to diversify production, allocation of resources to departments within the company. It may be concerned with how to structure company finances or whether to undertake a major investment project or to accept a major contract with long-term implications. As a point of reference, the determination of objectives within a business is also considered as strategic planning.
In order to make strategic decisions, you need to be informed and gather information from external sources because strategic planning has a long-term horizon, much of the information will relate to the future of your business rather than the present.
The nature of strategic decisions requires information on the development of market forces, the pattern of expenditure and the economy as a whole. therefore, this requires external data from sources such as market surveys, trade publications, demographic data and studies of behavioural buying patterns of the consumers, government report and commissioned research from specialist suppliers of goods or services.
Strategic Planning by nature is external to your business therefore outside your control and it applies mainly to the future meaning that it is highly uncertain and will tend to be summarized rather than highly details information gathered.
As an example of strategic planning decision making Girlfridayz conducted research prior to being an accreditated supplier of services for the DWP (Department of Work and Pension) providing services to the jobcentre in South and North London. This is a long-term contract, renewable in 4 years. This is a perfect example of when a business thinks strategically to advance the company in a long-term contract which will positively impact the company future income.
Here how we approached the UK government and presented and executed our idea
We first had the idea to provide support to unemployed people wanting to start their own business in 2017 with the following service business planning using our own template and starting an online business using our website bundles offer including providing business support. This was the original idea as we added our CV service for people who want to return or start work at a later date.
The steps we took to complete our idea whereas follows:
conducted research on the government website in 2018.
Find the relevant person to contact.
Write a proposal letter with our original idea.
Wait for a reply when no reply was received we chased our contacts with a follow-up email and this resulted in a positive response including the steps to complete to further the process in 2018.
Once we received a positive reply we were given 3 steps to follow and the first step was to access the Bravo system complete the first part of the application online and submit it then download the application form, complete it and enclosed all evidence required.
We completed the application form within a year as we needed to obtain the evidence required the pattern of expenditure and income of our business for two years.
Once we gathered all the evidence we uploaded our completed application to the Basware system and submitted it with attached evidence on the 21st/10/19 on the government system as requested and waited for a response.
We were given a positive response on the 24/10/19 with a request to amend a piece of information and re-submit our application.
We amended the information requested and resubmitted the application as requested and on the 25/10/19 we received an email stating Congratulation you have successfully completed step 1 and are now an accreditated supplier of service for the DWP (Department of Work and Pension) and you can supply your services to the public sector and private sector and it is a 4 years agreement. You will need to finish your account please follow step 2 and 3.
We then needed to finalised our account on their system and download step 2 the factsheet and answered the questions on the factsheets. Once our factsheet for each service offered including our CV services factsheet where completed we proceed to complete step 3 and uploaded our factsheets with detailed service provision on the Basware system and selected our contract and the geographical jobcentre we wanted to provide our services and decided on the South and North London Jobcentre as our company is based in South London.
We were told that our account is completed and when the Jobcentre will require our services uploaded on their system they will contact us with a purchase request as we are an accreditated supplier of services to the DWP for South and North London Provision.
Once accreditated as a supplier of services we contacted via email the original contact person who accepted our proposal to inform them that we were successful in completing the three steps and are now an accredited supplier of services for the DWP South and North Provision and thanking them for accepting my original idea and the opportunity offered to my company as well as informing them that my services are available to the jobcentre they are overseeing.
The example below demonstrate the strategic planning stages in making a decision originated from an idea based on past experiences which will impact positively on the future of Girlfridayz Limited.
Tactical Planning and control
Tactical planning is a managerial activity normally associated with the internal processes of a business and may involve the allocation of resources within the department of an organisation or business budgetary decisions on medium-term work scheduling and forecasting, and planning medium-term cash flows.
The control is mainly associated with the middle managerial level within a business and is the monitoring of actual production and expenditure against budget, the analysis of variances and actions taken in response.
Information for decisions at the tactical level will refer to the medium term, between now and the next few months or year. The information is mainly gathered internally within the business, although some external information may be necessary.
As an example of the latter, it could be difficult to set a budget if external raw material prices are subject to uncertainty affected by governmental changes (Brexit - deal or no deal what is the outcome we will discover this strategical decision effect on the 31st/12/20) or wages rate is set to the minimum wages in these cases both external information may be needed.
The information will usually be required in an aggregate form in this manner a request for the total sales for the month of a certain product or service, though not has consolidated as for a strategic decision meaning that its time horizon is likely to be less uncertain than information supplied for strategic decisions.
If your business keeps a good record keeping of all sales of products and services and expenses this information gathered can help you make tactical decisions in your business and control expenditure. The example below demonstrate tactical planning and control in your business.
Let say you selling toaster, iPhone, laptop computer, and insurance policy associated with these items
Monthly total sales of toaster £2345 quantity 12 sold
Monthly total sales of iPhone £10, 989 quantity 6 sold
Monthly total sales of Laptop Computer £1200 quantity 2 sold
Insurance policy sale £0
When you do your sales analysis you can see that your best selling item is the iPhone and your worst performing item is the laptop computer, however, the toaster did not do as well as you hope for. You can also see that you did not sell any insurance policy.
This when you start promoting the less performing items and maybe offer incentives to increase sales and since it is Christmas soon you can use the holiday season for your incentive and push the insurance policy associated with the item to achieve a cross-sale and also boost your most performing items to encourage more sales.
For more marketing strategies and tactics purchases our Marketing Playbook and get to know the core asset of marketing and associated strategies to increase sales. If you are interested in improving your existing marketing input and care about the output you can read a bit of our playbook for free and then decide if you want to purchase it. view what inside today and improve your marketing tomorrow
This example demonstrates the ability of your company to make decisions on internal information and implement systems based on information gathered and market testing as if you found the strategies and tactics which works best for your business you then implement the decision as a system which can be re-used on many occasions and yield the same, similar or better result.
Operational Planning and Control
Operational planning is associated with the day to day operation decisions made within your business which are design to ensure the efficiency and effective use of existing resources to achieve budget objectives.
These decisions may involve the management of the staff as an example hiring the right staff or firing non-performing staff or purchasing new business equipment such as a non-performing computer because the fan makes noises and it is a serious indication that it needs repairing. The control of the inventory and production levels decision, the aspect of credit control over customers and other forms of accounting and cash controls.
information for operational planning and control is exclusively internal within the organisation, and it is highly detailed, certain, immediate and relevant. For instance, the operation decision to renew the stock of an item if it has fallen below its recorded stock level will be based on the following information:
The number of orders made for the item, any pre-order, quantity ordered and the expected delivery date.
The expected future use of the item, including any outstanding customer commitments.
The storage and handling available
The range of suppliers of the item, their prices, and their expected delivery dates
All this information is part of your business operation supply chain and will be held within the business and once it is recognised as relevant for the decision it can be retrieved and used. The infographic above shows the characteristic of information supplied for the various levels of managerial activities.
It is important to note that these activities need not necessarily be carried out by different people and not innate to any size of business
Indeed in very small company decisions at these levels shown in the infographic triangle above may be all carried out by the same person.
In Conclusion planning for your business at every level of decision-making whether being stratigically, tactically or operationally are important because without a plan for your business you may not progress and ensure that your plan is not on the never-never but is it timebound meaning it has a deadline for execution.
If you enjoy this blog article about planning and decision-making please, by all means, share it with your associate, peers as they may enjoy the information as well.
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