What is AOP ? AOP plan is an important factor that directly affects the development process of a business, especially in business activities. To understand the concept of AOP and the steps to build an effective AOP, let's learn with 1C Vietnam through the article below!
AOP (Annual Operating Plan) is a tool that helps orient operating goals, business plans and expected revenue and expenditure budgets for a year. An AOP table will include accurate information about the work, tasks, goals of each department and corresponding financial limits. Thanks to that, departments and teams will clearly understand the goals to be achieved in order to develop specific strategies and quickly complete assigned tasks.
The goal of AOP is to combine forecasts, budgets, and plans from different departments into a unified whole for the business. AOP helps departments and divisions unify goals and set appropriate standards for implementation together. Thereby, AOP will ensure that the business operates smoothly, in the right direction, and effectively.
The more detailed an AOP plan is, the more it ensures that management can monitor the situation and manage operations effectively. Below are the criteria that an AOP plan should have:
The AOP plan plays a very important role in the sustainable development of the enterprise. The main subjects implementing the AOP plan are usually the CEO, strategic management departments, business management, financial management and production management. At this time, leaders need to focus on market research, observing resources before setting goals based on clear directions.
Building a comprehensive AOP is a top and indispensable task in business, helping to promote business development. Specifically:
The AOP plan will be a great help for marketers and business owners to improve their planning skills, execute strategies and create an overview of a year of business operations. Thereby, helping marketers and business owners estimate financial capacity, effectively implement revenue and expenditure and ensure optimal profit.
The key to the success of an AOP plan is having a professional planning team. Therefore, allowing employees to participate and give their opinions will help leaders have an overall view of the business's operations, thereby orienting and determining the most accurate goals. In addition, businesses can use some internal or outsourced consultants to support more effective planning.
After assembling the staff, the business needs to review and evaluate the business performance from previous years, possibly through financial reports, budget reports, etc. to provide basic guidance for the process of building the AOP plan. In addition, reviewing past activities also helps the business grasp the peak periods when it is necessary to focus budget, resources and necessary activities to build the most comprehensive annual plan.
Setting specific and realistic goals is important, especially when developing an AOP plan. However, businesses need to pay attention to the following issues to avoid mistakes:
Based on the results outlined in the above step, the enterprise needs to establish indicators to measure the effectiveness and level of completion of the enterprise's set goals. From there, continue to develop KPIs and specific tasks that employees and departments need to perform, helping the entire process focus on the most core elements.
To maintain financial capacity and revenue and expenditure activities in a year, businesses can set up a monthly budget for easier management. At the same time, apply separate budgets for each case such as capital cost increase, unprofitable period or purchase of long-term assets to ensure that the general budget is not overspent.
It is essential to consider potential risks during AOP planning, including: What could prevent the business from achieving its goals? What could go wrong in every aspect of the business?
The business can then build a set of possible solutions for the annual operating plan. This way, the business will be prepared if the project fails but does not affect the overall picture.
Businesses should choose the right time to evaluate the plan, the work to be done includes: Monitoring, tracking the progress of the AOP plan, analyzing KPIs, identifying obstacles... This will help businesses confirm the success or failure of the plan to implement timely improvement solutions.
As mentioned, the AOP plan plays a guiding role for the entire business activities of the enterprise in a year. Therefore, not having a comprehensive plan like AOP would be a serious shortcoming, causing negative impacts for the enterprise. For example:
1C:ERP business management solution is a powerful tool that possesses a modern, global technology platform and the ability to deploy 2 times faster than other solutions. This is the optimal choice, helping businesses manage goals and develop appropriate AOP strategies to achieve business goals, while overcoming technological challenges in the digital age. 1C:ERP solution is always applied by many managers in business operations with the following strengths:
In addition to the knowledge surrounding what an AOP plan is , many people often wonder about some issues such as who is the subject of implementing the AOP plan?, how to distinguish AOP and budget plan?, and variations of AOP in businesses?. Below are brief answers to the above questions:
A complete AOP plan should include the business's strategic and tactical plans for the coming year. For example:
In general, both AOP and budget planning refer to the financial structure of the business. However, there are still clear differences between the two concepts, specifically: AOP planning is a document that describes specific, focused goals for each department. Meanwhile, budget planning is more based on numbers and includes revenue targets, financial assumptions, and cost forecasts.
Thus, the above article has presented in detail what AOP is and the steps to build a complete AOP plan to help businesses manage target indicators and strategies effectively. Through this, we hope that administrators have an overview of this topic, thereby effectively applying it in practice to create business performance efficiency. If you have any further questions about the 1C:ERP solution, please contact 1C Vietnam for the most detailed and fastest support.