Target Operating Models
Are all your ducks in a row?
A good TOM ensures that the organisational direction is fully aligned with its strategic goals and it is a key element in engaging and communicating the rationale for change to stakeholders. So you've heard of TOM but how can you be sure your organisations operating model is any good?
What is a Target Operating Model?
A Target Operating Model (TOM) acts as a bridge between the organisational strategy and the service delivery within an organisation. It is a "north star" by which to navigate and defines how the organisation will operate at some point in the future. The TOM is a high level representation of the end to end organisation, designed to efficiently and effectively deliver and execute the organisation’s strategy.
A TOM usually addresses the processes, technologies and organisation required to meet the organisational objectives and provides the link to a roadmap of change initiatives to establish the desired outcomes, services and behaviours.
The Key Considerations for implementing a new TOM
One of the early key considerations in changing or creating a TOM is to ensure that the scope is well understood:
- Organisations may for example chose to restrict scope by focusing on process and technology and not including organisational change.
- The TOM may also be restricted to certain functions within the overall departmental scope, such as applications development and application maintenance.
A blue-print model of processes can therefore be used to identify which activities are in scope for the TOM.
The future of IT service delivery in an increasingly digital and automated world will become dependent on a highly efficient and flexible TOM, incorporating internal and external delivery teams. The model will need to flex over time and adapt to the emerging disruptors in the IT and business environments.
This need for flexibility is driving innovations in Target Operating Models, including:
- Increased insourcing and internal capability build to enable the business to retain key knowledge and act as an “intelligent buyer” of services.
- Different supplier commercial models to deliver the needs of the business under the new TOM for example delivering committed innovations, end to end service incentives and one team working.
- The importance of knowledge retention and shared knowledge capital to enable the new ways of working.
- Structuring the TOM to meet the needs of bi-modal IT delivery.
- Tooling and automation such as service dashboards and collaboration tools.
A successful TOM also needs to adapt to market innovations such as:
- Delivery models such as DevOps/ Agile, Cloud and XaaS and globalised resource models.
- TCO focus, with application rationalisation and effective portfolio management.
- Innovation Labs developing prototype “fail fast” solutions.
- Technology and Tooling.
- Automation for example in testing and support services.
The Quantum Plus Approach
We would propose a 5 step approach to establishing the TOM:
- Defined outcomes and a fully aligned TOM vision.
- An assessment of the current state (As-is State).
- TOM options and analysis.
- Definition of the To-be State and roadmap for change, supported by our Organisational Change Management (OCM) methodology.
- Implement, support and maintain TOM.
Our approach is facilitated by our expert consulting team and enabled by our established methodologies and templates.
In addition, we would propose an “agile” based delivery approach to drive the road map for change, ensuring that change initiatives are prioritised and that the programme delivers incremental value, quickly for our clients. This embodies the change in agility and one team working many of our clients have as a part of their TOM.
TOM programmes fail as a result a number of factors including of a lack of stakeholder commitment, or a lack of understanding leading to the desire to treat this as one large and pre-defined “waterfall” programme, rather than a change journey that adapts as the business priorities change over time.
A failure to address the Organisational Change Management (OCM) aspects of the change (both internally within IT and in the end user community) could be disruptive and lead to a sub-optimised solution.
Benefits and Innovation
The key benefit of a TOM is that the model is optimised and fully aligned with core business objectives which are monitored and measured. This in turn drives improvements in time, cost and quality of the delivered service to users and in improved satisfaction and retention of staff (through innovations such as self-help and automation).
A successful TOM, supported by an approach of delivering incremental value throughout the change programme, will adapt to market innovations and the changing needs of the business, over time.
Our proven approach to defining, implementing, maintaining and supporting a TOM, engages leadership, staff, users and suppliers, building commitment and addressing resistance to change through OCM, as a core part of the process.
Is my operating model fit for today's changing environment?
So, if you are reflecting on whether your operating model is able to flex and accommodate the fast moving pace of change in today’s IT world, why not take some time to talk to us and understand how we have helped other organisations to set their “north star” through a TOM and then successfully implement the programme of change to drive business value through effective IT delivery.