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Differentiation Begins with A Target Operating Model

Target Operating Model


A target operating model is a blueprint that defines how an organisation will operate to achieve its strategic objectives. It outlines the structure, processes, capabilities, technologies, and governance required to deliver value to customers and stakeholders.

Having a target operating model is important, as it ensures alignment between strategy and operations within an organisation. It also enables effective resource allocation and can drive efficiency and effectiveness. Perhaps most importantly, it supports innovation and growth, two things needed to allow a business to not only expand but keep up with changing market conditions.

The components of a Target Operating Model include:

– An organizational structure under which roles and responsibilities and reporting structures are laid out.

– Processes, which includes not only workflows but also systems and tools.

– Capabilities, which include things like skills and competencies, and also the development and maintenance of such through training and development.

The Technologies category includes infrastructure and applications.

– And last, but by no means least, governance. This is the all-important decision-making processes and of course the management of performance. 

Having a target operating model can have a multitude of benefits for organisations. For example, through enhancing agility and flexibility, improving decision-making, and increasing collaboration and communication. TOM’s can also reduce the costs and risks involved in running operations.

For the successful implementation of a target operating model, a few important things need to be put in place – there must be an assessment of the current state of the organisation, and the ideal future state needs to be defined to ensure a resource friendly. After these are determined, work needs to be done to develop the transition plan between the two states. Finally, the changes can be implemented, but the process cannot stop there, as continuous monitoring and adjusting needs to take place.

In conclusion, a target operating model is essential for organizations looking to differentiate themselves in a competitive market. By aligning strategy with operations and optimizing resources, companies can achieve sustainable growth and success.

target operating model (with experts such as these) – ensuring structures, capabilities and processes align with strategic ambitions to create the conditions for success”

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