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Target Operating Model
What Is a Target Operating Model?
A target operating model (TOM) is the future blueprint for an organisation’s people, processes and technology to successfully deliver on its vision and the desired customer experiences. It is a high-level representation of how an organisation can be best organised to more efficiently and effectively deliver and execute on its strategy.
In addition, it provides a common understanding of the organisation by allowing people to visualise the organisation from a variety of perspectives across the value chain as every significant element of activity is represented. People, process and technology are key components underlining any TOM and are critical to ensure its success.
Designing a Target Operating Model (TOM) involves creating a blueprint for the structure, processes, and resources necessary for an organisation to achieve its strategic objectives.
Pink Elephant’s Approach to a Target Operating Model
- Define the Vision and Objectives: determine the long-term vision of the organisation and establish clear strategic objectives that the TOM aims to support.
- Assess the Current State: analyse the existing operating model and identify gaps between the current state and the desired future state.
- Design Key Components
- People: define required skills, competencies and cultural attributes.
- Processes: map out and optimise the core processes.
- Technology: identify all necessary technology and systems
- Organisational Structure: define roles, responsibilities and reporting lines.
- Governance: establish decision-making frameworks and compliance measures.
- Develop Implementation Plan: create a detailed roadmap with timelines, milestones, and resource allocation and test the new model in a controlled environment.
- Monitor and Refine: set KPI’s to measure success and establish mechanisms for ongoing monitoring and adjustments to drive continuous improvement.
Six Benefits of a Target Operating Model
- Strategic Alignment: A TOM provides a clear framework that aligns your operations with its strategic objectives and ensures consistency in how strategic initiatives are executed across different parts of the organisation.
- Operational Efficiency: A TOM streamlines processes and optimises resource utilisation to achieve maximum productivity.
- Improved Customer Experience: by focusing on customer needs and preferences, a TOM helps improve the overall customer experience and ensures consistent delivery of high-quality products and services.
- Cost Reduction: reducing redundancies and inefficiencies, streamlined processes and optimised resource allocation lead to significant cost savings.
- Improved Decision-Making: designing a TOM establishes clear governance structures and decision-making frameworks. In addition, the analytics and reporting mechanisms that a TOM includes, provide data-driven insights that support informed decision-making. In addition, a TOM
- Innovation Enablement: designing a Tom includes leveraging new technologies and drives digital transformation and fosters a culture of continuous improvement.