The Target Operating Model (TOM) is a blueprint that outlines how an organization intends to operate in the future. It encompasses the processes, systems, structures, and culture required to achieve strategic objectives and deliver value to stakeholders. The TOM serves as a guide for transformation initiatives and helps align resources and capabilities with business goals.
TL;DR
The Target Operating Model (TOM) is a blueprint for future organizational operations, aligning processes, systems, structures, and culture with strategic objectives.
Key components include processes, people roles and skills, technology systems and tools, governance frameworks and policies, and organizational culture.
The benefits of TOM include aligning resources with goals, enhancing efficiency, facilitating change management, improving stakeholder satisfaction, and enabling better decision-making.
Implementation involves assessing the current model, engaging stakeholders for insights/alignment on objectives; developing a transition roadmap; monitoring progress to ensure effectiveness.
Key Components of a Target Operating Model
Processes: The workflows and procedures that define how tasks are performed within the organization.
People: The roles, responsibilities, and skills needed to operate effectively.
Technology: The systems and tools that support processes and enable efficient operations.
Governance: The frameworks and policies that guide decision-making and accountability.
Culture: The values and behaviours that shape the work environment and influence employee engagement.
Benefits of a Target Operating Model
Aligns organizational resources with strategic goals.
Enhances operational efficiency and effectiveness.
Facilitates change management and transformation initiatives.
Improves stakeholder satisfaction and value delivery.
Enables better decision-making through clear governance structures.
Implementation Considerations
Conduct a thorough assessment of the current operating model.
Engage stakeholders to gather insights and align on objectives.
Develop a clear roadmap for transitioning to the target operating model.
Monitor progress and adjust the model as needed to ensure effectiveness.
In summary, the Target Operating Model is a critical framework for organizations seeking to optimize their operations and achieve long-term strategic goals.
Richard Keenlyside is a Global CIO for the LoneStar Group and a previous IT Director for J Sainsbury’s PLC.
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