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How To Design A Target Operating Model9 min read

Aug 4, 2022 6 min

How To Design A Target Operating Model9 min read

Reading Time: 6 minutes

A target operating model (TOM) is a blueprint for the future state of an organization. It defines the strategic goals of the organization and the specific ways in which the organization will achieve them.

Designing a TOM is a complex process that requires input from a variety of stakeholders. The following steps can help you create a TOM that meets the needs of your organization.

1. Define the business goals of the organization.

The first step in designing a TOM is to define the business goals of the organization. What are the organization’s strategic objectives? What are its key priorities?

2. Assess the current state of the organization.

Next, you need to assess the current state of the organization. What are its strengths and weaknesses? What is working well and what needs to be improved?

3. Create a vision for the future state of the organization.

Once you have a clear understanding of the organization’s goals and current state, you can begin to develop a vision for the future state of the organization. What does the ideal future look like? What are the key components of the TOM?

4. Define the specific functions and processes of the organization.

Once you have a vision for the future state of the organization, you need to define the specific functions and processes that will be needed to achieve that vision. What are the essential business functions? What are the key processes that need to be streamlined or improved?

5. Create a roadmap for implementing the TOM.

Finally, you need to create a roadmap for implementing the TOM. This will outline the steps that need to be taken to bring the organization to the desired state. It will also identify the key stakeholders who will be responsible for each step of the process.

What is a target operating model example?

A target operating model is an example of the ideal state that an organization wishes to achieve with respect to its operations. It can be used as a guide to measure performance and make improvements.

The target operating model should define the key processes and functions of the organization and specify the desired outcomes for each. It should also identify the resources and capabilities that are needed to support the operations.

Once the target operating model is developed, the organization can use it as a roadmap to guide the transformation of its operations. The target operating model can be used to measure progress and make adjustments as needed.

How do you create an operating model?

An organization’s operating model is a high-level plan that outlines how it will go about achieving its strategic objectives. It describes the key components of the organization and how they interact with one another.

There are a number of factors to consider when creating an operating model. The first is the organization’s strategy. It’s important to ensure that the operating model aligns with the strategic objectives.

The next step is to define the key components of the organization. This includes things like the business model, governance model, and organizational structure.

Once the key components are defined, it’s important to outline how they interact with each other. This includes things like how the business model affects the organizational structure and how the organizational structure affects the governance model.

It’s also important to consider the resources and capabilities of the organization. This includes things like the size of the organization, the skills and expertise of its employees, and the financial resources available.

Once all of this is taken into account, the final step is to develop a roadmap for implementing the operating model. This includes things like detailed implementation plans and timelines.

Creating an operating model can be a complex process, but it’s important to have a clear plan in order to achieve the organization’s strategic objectives.

What should be included in an operating model?

An operating model is a high-level plan that documents how a company expects to operate. It should include a description of the company’s products and services, its organizational structure, and the processes it will use to deliver those products and services.

An effective operating model should be tailored to the company’s specific needs and should be easy to update as the business changes. It should also be scalable so that it can be adapted to meet the needs of a growing business.

The components of an operating model vary depending on the company, but some of the most common elements include:

-Product and service offerings

-Organizational structure

-Processes and procedures

-Technology infrastructure

-Marketing and sales strategies

-Human resources policies and procedures

-Financial and accounting systems

-Quality assurance and risk management procedures

An operating model is an important tool for companies that want to be able to scale up quickly and efficiently. By clearly documenting how the company operates, an operating model can help ensure that all employees are on the same page and that the company is able to meet customer demand.

What are the 4 operating models?

There are four operating models that businesses can use to run their operations:

1. The centralized model

In the centralized model, all decision-making authority is concentrated in a single location. This model is usually used in larger businesses where there is a need for a single authority to make decisions that will affect the entire organization. The centralized model can be effective in ensuring that decisions are made quickly and efficiently, but it can also lead to communication problems and delays in decision-making.

2. The decentralized model

The decentralized model is the opposite of the centralized model – in this model, decision-making authority is distributed among different locations within the organization. This model is usually used in smaller businesses where there is a need for faster decision-making and more flexibility. The decentralized model can lead to better communication and more efficient decision-making, but it can also be more difficult to manage and can lead to disagreements among different locations.

3. The functional model

In the functional model, the business is divided into different functional areas, such as marketing, finance, and operations. Each functional area is responsible for its own operations and decisions. This model is often used in smaller businesses where there is a need for specialization and expertise in different areas. The functional model can lead to better communication and more efficient decision-making, but it can also be more difficult to manage and can lead to disagreements among different areas.

4. The divisional model

In the divisional model, the business is divided into different divisions, such as sales, marketing, and manufacturing. Each division is responsible for its own operations and decisions. This model is often used in larger businesses where there is a need for specialization and expertise in different areas. The divisional model can lead to better communication and more efficient decision-making, but it can also be more difficult to manage and can lead to disagreements among different divisions.

Why do I need a Target Operating Model?

A Target Operating Model, or TOM for short, is a strategic planning tool that helps organizations achieve their desired outcomes. It provides a blueprint for how an organization should operate in order to achieve its goals.

There are many reasons why an organization might need a TOM. Perhaps the organization is experiencing rapid growth and needs a way to ensure that all of its operations are aligned with its strategic objectives. Or maybe the organization is struggling with inefficiencies and needs a way to streamline its processes.

Regardless of the reason, a TOM can be a valuable tool for any organization. It can help to ensure that all departments are working together towards the same goal, and it can also help to improve organizational efficiency.

If you’re thinking of implementing a TOM for your organization, there are a few things to keep in mind. First, you’ll need to determine the goals of the organization and the specific areas that need improvement. Second, you’ll need to create a detailed plan of how the TOM will be implemented. And finally, you’ll need to make sure that everyone in the organization is on board with the plan and understands their role in achieving the organization’s goals.

If you’re looking for a way to improve your organization’s efficiency and achieve its strategic objectives, a Target Operating Model may be the solution you need.

What is Target Operating Model ey?

What is a Target Operating Model?

A Target Operating Model (TOM) is a business model that defines how an organization plans to create value for its customers. It identifies the key activities and processes that the organization will focus on in order to achieve its goals.

The TOM is a key part of the organization’s overall business strategy. It helps to ensure that the organization is focused on the right things and that its resources are being used in the most effective way possible.

The TOM can be used to guide the development of specific business processes and systems, and to help make decisions about where to allocate resources.

The TOM should be reviewed and updated on a regular basis to ensure that it remains relevant and effective.

What are the five core operating model functions?

A company’s operating model is a high-level plan that defines how it will organize and manage its resources to create value for its customers. There are five core functions that all operating models should include:

1. Strategy

All businesses need a clear strategy for how they will create value for their customers. This strategy should be based on an understanding of the company’s strengths and weaknesses, the needs of its target market, and the competitive landscape.

2. Organization

The organization function of the operating model defines how the company will structure its resources to support its strategy. This includes the division of labor, the allocation of resources, and the management hierarchy.

3. Processes

The processes function of the operating model defines the key business processes that the company will use to create value for its customers. These processes should be designed to be efficient and effective, and should be tailored to the company’s unique strengths and weaknesses.

4. People

The people function of the operating model defines the company’s workforce strategy and the skills and competencies that the company will need to execute its strategy. It also includes the company’s HR policies and procedures.

5. Technology

The technology function of the operating model defines how the company will use technology to support its business processes. This includes the selection and implementation of enterprise software, the use of technology to improve process efficiency, and the management of IT resources.