The rapid advances in new technologies mean all organizations need to continue to refine business and operational models in order to mitigate risk.
Claudio Stadelmann, Partner at BearingPoint
In today's fast-paced business environment, significant changes are being driven by the rapid advancement of technologies such as Generative AI, Quantum Computing, the Internet of Things and many more. Across all industries, organizations know adapting to market changes is no longer optional; it is a critical necessity. As increasingly accelerating changes reshape established conventions, the notion of a fixed operating model approach is becoming outdated.
Setting strategic goals, creating governance structures for a culture of autonomy, and facilitating the organization's utilization of valuable data all requires a fresh operational approach that includes supervision and clearly defined responsibilities. Amid rapid change, various departments can lose clear definitions of their duties, leading to a feeling of uncertainty and disarray.
Defining a future-ready Target Operating Model begins with conceptualizing a strategy, embodying the organization’s aspirations. This is followed by an analysis of the existing business model which ultimately leads to the customization of the Target Operating Model that caters to the unique requirements of each organization. Leveraging a diverse set of expertise and experience promotes adaptability, ensuring that the operating model is not a static blueprint but a dynamic framework.
An organization’s strategy is not created in a vacuum. It requires a well-structured approach that considers external and internal aspects. This process begins with a clear understanding of the organization's objectives and goals, both in the short- and long-term. It further entails conducting a thorough analysis of the market, including competitors and emerging trends, to identify opportunities and threats. Engaging key stakeholders is crucial to understand the organization’s history and gain diverse perspectives. Additionally, fostering a culture of innovation and adaptability is essential, encouraging ongoing refinement of the strategy in response to evolving circumstances. Finally, the establishment of key performance indicators (KPIs) as mechanisms for feedback and measurement enable the organization to monitor progress and make necessary adjustments to the strategy implementation as required.
Success depends not only on an organization’s strategy but also on a clearly defined business model that seamlessly aligns with the strategy. Clear roles and functionalities must span each department across the entire organization to drive value creation. Companies need to pinpoint the business model, outlining the processes of generating, delivering, and capturing value. This model delineates core activities, target audiences, revenue streams, and competitive advantages. In this phase, the strategy evolves into actionable steps and tangible outcomes.
With the foundational cornerstones in place, the process of selecting the appropriate Target Operating Model can commence. While there are numerous Operating model blueprints, a universal solution cannot be applied, as each organization's distinctiveness necessitates a bespoke approach. Critically evaluating multiple models is essential to pinpoint the most suitable one as a starting point and subsequently tailoring it to the organization's unique requirements.
After the definition of the customized Target Operating Model, a proven approach is to initiate the implementation process in conjunction with the capabilities outlined below.
In today's dynamic market, influenced by rapid technological advancements and various unpredictable factors, there lie both opportunities and challenges. It is imperative for every company to showcase flexibility in order to sustain economic prosperity. Achieving this demands a thoughtful and customized alignment of strategy, business- and operating model.