What is an operating model document?


What is an operating model document?

An operating model is a visual representation of how a company runs. It includes everything from how the company sources its products to how it structures its business areas and departments. An operating model serves as a blueprint for executing your strategy. Many people confuse business models with operating models.

How do you design an operating model?

Here is my 30 second guide to building your operating model:

  1. Define your operating model design principles.
  2. Define your operating model operating principles.
  3. Understand and document the value chain(s)
  4. Understand and define the capabilities required to deliver the value chains including supporting capabilities.

How do you document a target operating model?

Here are four simple steps you can take:

  1. DEVELOP DESIGN PRINCIPLES. Design principles are high level statements about how an organisation should operate.

What should an operating model include?

All elements of the operating model—structure, accountabilities, governance, essential behaviors as well as the way people, processes and technology get integrated to deliver key capabilities—must be explicitly designed to support the strategy.

What does a good operating model look like?

A good operating model carefully matches the capabilities of the teams, companies or business groups to the functions of the business. It may be easy to consolidate functions within a single team and tempting to do so because the functions may sound the same.

What are the components of an operating model?

What is the difference between operating model and Organisational design?

The target operating model only provides the delivery blueprint for a company’s business model, whereas organizational design deconstructs the model, focusing on the granular level of how to ‘Make it Real’ (see Figure 2 and Figure 3).

What are the layers of business operating model?

To overcome this weakness, the KPMG Target Operating Model includes not three, but six ‘layers’ – Process, People, Service Delivery Model, Technology, Performance Insights and Governance.