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2024-12-10 00:00:00

The role of a Target Operating Model within your organisation

Written by Airwalk Reply Senior Consultant Oliver Hibbitt

In the fast-paced, evolving world of IT, having and understanding your target operating model (TOM) is crucial. As technology advances and business needs differ, your organisation should have a structured blueprint to navigate these changes.
 
A well-defined TOM ensures you have the right people, processes, and technology in place to meet today's demand and remain adaptable and scalable for future challenges.
 
Without an appropriate TOM, your business risks falling behind, and you may struggle to adapt to disruptions and miss out on new opportunities. A number of studies indicate that anywhere between 70-90% of businesses face challenges or fail when moving from strategy to practice, resulting in many business inefficiencies.
 
There is no one-size-fits-all for a TOM, and it can be visualised in many forms, but the right TOM for your organisation can provide the strategic foundation to drive innovation, resilience and efficiency in an ever-changing landscape.

Some Key Benefits

Understanding your gaps - assess current operations to highlight inefficiencies and opportunities for improvement that can be addressed in your desired state.
 
Strategic Alignment – helps align IT capabilities with your wider business objectives that support the long-term vision.
 
Operational Efficiency – by clearly defining roles, workflows and technologies, a TOM streamlines operations by reducing redundancy, improving utilisation and enhancing the end-user experience.
 
Improved Decision Making – helps prioritise projects, backlogs and allocation of resources to inform decision-making against business objectives.
 
Risk Mitigation – a clear TOM allows for proactive risk management, prepping your organisation for future changes in technology or market conditions.

Target Operating Model FAQ's

There are any number of scenarios in which you might want to review your operating model to ensure continued relevance, such as:
 
Scenario 1 – Implementing New Technology
When introducing a major new system such as cloud infrastructure, the operating model should be re-assessed to ensure processes, roles and capabilities are aligned with the new technology so an optimal integration can be achieved.
 
Scenario 2 – Organisational Restructure
A large-scale business re-organisation like merging departments or moving to a Product-led structure would require realigning workflows, responsibilities and communication channels.
 
Scenario 3 – Market or Regulatory Changes
There may be cases where new market regulations arise, and your operating model may need to be reviewed to ensure compliance, mitigate risks, or seize new opportunities.
 
Scenario 4 – Scaling for Growth
Your organisation may experience rapid growth or be entering new markets. Reviewing the operating model can help ensure that your resources, processes and technology can scale effectively while minimising bottlenecks and inefficiencies.

As the quote goes, ‘If you stay still, you’re moving backwards,’ and reviewing your TOM is essential for staying competitive in a rapidly evolving landscape. Rather than being reactive to changes, a proactive shift in your operating model allows you to anticipate needs, optimise your resources and improve your overall delivery.

Whilst the two are heavily interlinked, a TOM is more the high-level roadmap that focuses on outlining the overall structure, processes and systems that an organisation needs to reach its goals as opposed to Service Design, which looks at the individual services that are created and optimised within that framework.
 

This can vary depending on the complexity and scope of the change; however, we usually find it can take anywhere from several months to over a year. Ensuring regular reviews and adjustments are key to achieving your desired operating model outcome that aligns with business timelines.

Absolutely, a TOM is designed to be adaptable and should stay aligned with the organisation’s growth and strategic objectives. This flexibility alone makes it a powerful tool for long-term success.
 
At Airwalk Reply we understand that every situation is unique. With decades of experience, we dive into the details and work alongside you to turn the ideas and theory into practical results. If you wish to speak to us about this in more detail, please Get in Touch

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