Dear Friend,
An operational risk is a risk arising from execution of a company's business functions. As such, it is a very broad concept including e.g. fraud risks, legal risks, physical or environmental risks, etc. The term operational risk is most commonly found in risk management programs of financial institutions that must organize their risk management program according to Basel II. In Basel II, risk management is divided into credit, market and operational risk management. In many cases, credit and market risks are handled through a company's financial department, whereas operational risk management is perhaps coordinated centrally but most commonly implemented in different operational units (e.g. the IT department takes care of information risks, the HR department takes care of personnel risks, etc)
More specifically, Basel II defines operational risk as the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events. Although the risks apply to any organization in business, this particular way of framing risk management is of particular relevance to the banking regime where regulators are responsible for establishing safeguards to protect against systemic failure of the banking system and the economy.
Coming to your query in specific, while formulating capital budgetng for a project, over and above the financial risk involved, its execution and its success also depends upon the operation risks such as business risks, fraud risks, Client, Products, and Product Life Cycle risks, etc. Keeping all such "Non Financial Risks" in view, the Operating Risk enters into consideration.
Reference:
http://www.riskglossary.com/link/operational_risk.htm
http://en.wikipedia.org/wiki/Operational_risk
I hope the above helps...
Regards,
Financial Advisor
Technical Analyst in Financial Markets -- Experience of more than 10 years in consulting