Annual Operating Plan

Annual Operating Plan (AOP) is a detailed projection of forecasted sales revenue for the fiscal year. In other words, it is a plan to target for the upcoming fiscal year. It sets target sales revenue for all regions/territories, helps coordinate the activities to achieve the target and measure the performance by giving variance of the actual versus forecasted revenue. AOP addresses the following questions:

    How did we do last year?
    How much do we want to do this year?
    How do we meet the goals?
    Monitor and measure in real-time how you are performing against the stated goals.

NEHANET Annual Operating Plan eliminates earnings surprises. It is a planning tool that helps management to plan for the coming fiscal year by relying on data from the prior year and the trends for the upcoming year. By involving everyone in the planning process from day one, to ensuring that daily, weekly, monthly and quarterly activities drive the plan, and to showing real-time actual vs plan numbers, the AOP keeps everyone laser focused on making the plan numbers.

Three key terms to keep in mind:

    Target: This is the target revenue goal set for you by your immediate Manager.
    Plan: This is how you plan to achieve your target revenue goal by setting target revenue goals for your direct reports and/or with the Customers where you are the Account/Sales Manager.
    Commitment: This is the committed revenue for your direct reports and/or with the Customers where you are the Account/Sales Manager.

AOP is typically developed once per fiscal year. It is set in a top down approach. You as the CEO (or Management) will set targets for your direct reports, who in turn will set target for their direct reports. The leaf level employee, can click through to the key accounts in their territory and develop the AOP for those accounts. You can also click through to the Opportunities for that account and develop the Opportunities in detail. In addition, it gives you visibility to all the activities needed to meet the plan target. Plan numbers are entered quarterly for the entire fiscal year. A clear owner is also assigned for each level. Each owner is supposed to align their plan with the plan for the level above and the level below their own level. The AOP module relies on the user reporting hierarchy as configured in the user module. The interface is hierarchical and you can iterate up and down through the levels, allocating and adjusting numbers and reconciling the numbers for that level and the aggregate from all lower levels. At each level, you will have visibility to last year’s performance for that level to help plan for the current year. The plan once completed can be locked till the next fiscal year begins.

Any plan includes activities and tasks for everyone involved to meet the plan goals. These tasks can vary significantly in time and scope. Timely execution of the activities and measuring the plan actual with the target gives everyone with the visibility to what adjustments needs to be done within the organization. Account Plans are typically reviewed on an annual or quarterly basis. Opportunity Plans are typically reviewed more frequently to adjust to Customer demands. The system gives you Actual Versus Commit variance by Quarter and Year to Date for each level of the hierarchy.

Rollout Notes

  • Enable Orders/Sales History module if not already enabled. This is done in Advanced Configuration->Tabs
    Enable Permissions for this module in System Administration->Permissions.
    Once enabled, In NEHANET Only, click on Reset System View, so Orders module shows in My Module and Create Menu.
  • Enable Forecasts module if not already enabled. This is done in Advanced Configuration->Tabs
    Enable Permissions for this module in System Administration->Permissions.
    Once enabled, In NEHANET Only, click on Reset System View, so Forecasts module shows in My Module and Create Menu.
  • In NEHANET Only->Configuration-Forecasts, Set Default Duration to a minimum of 24 months.
  • In User module, set Reports To field for all users. This is used in the Annual Operating Plan to do the top down planning.
  • In NEHANET Only section, click on Refresh Permissions to enable the new “Annual Plan” field in Accounts
  • Update all Accounts and set Annual Plan to Yes
  • Enter Sales Order, Refresh Annual Plan
  • POS – make it a computed column