Creating a successful target operating model (TOM) is essential for any organisation looking to streamline its operations, increase efficiency, and ultimately achieve its strategic goals. A TOM serves as a blueprint for how an organisation will function at its most efficient state, and outlines the structure, processes, and capabilities needed to deliver on its objectives. In this essay, we will discuss the key steps that organisations can take to create a successful target operating model.
The first step in creating a successful target operating model is to clearly define the organisation’s strategic objectives. This involves identifying the long-term goals and vision of the organisation, as well as understanding the key drivers of success. By aligning the TOM with the strategic objectives of the organisation, leaders can ensure that the model will support and enable the achievement of these goals.
Once the strategic objectives have been defined, the next step is to conduct a thorough assessment of the organisation’s current operating model. This involves analysing the existing processes, systems, and capabilities to identify areas of inefficiency and opportunities for improvement. By understanding the current state of the organisation, leaders can develop a clear roadmap for how the TOM can be optimized to better support the strategic objectives.
After assessing the current operating model, the next step is to design the target operating model based on the findings from the assessment. This involves defining the desired future state of the organisation, including the structure, processes, capabilities, and technology needed to support the strategic objectives. The design phase should involve collaboration across different functions and levels of the organisation to ensure that the TOM is aligned with the needs and priorities of all stakeholders.
Once the target operating model has been designed, the next step is to implement the changes needed to transition from the current state to the desired future state. This may involve redesigning processes, implementing new technology, developing new capabilities, and restructuring the organisation. It is important to have a clear implementation plan that outlines the timeline, resource requirements, and key milestones for the transition to the new operating model.
Finally, continuous monitoring and evaluation of the target operating model is essential to ensure its ongoing success. This involves tracking key performance indicators, gathering feedback from stakeholders, and making adjustments as needed to optimize the model over time. By regularly reviewing and refining the TOM, organisations can ensure that it remains aligned with the strategic objectives and continues to drive efficiency and effectiveness across the organisation.