‘Operating Model’ is a term that many business people can understand in different ways. Transformation Leadership has consolidated and distilled the wide range of thinking in this area into a comprehensive framework and consistent approach to operating model analysis, development, and implementation.
An organisation’s operating model should provide a clear, ‘big picture’ description of what the organisation does, across both business and technology domains. It provides a way to examine the business in terms of the key relationships between business functions, processes and structures that are required for the organisation to fulfil its mission. The operating model philosophy can be applied to organisations of all types – including large corporates, not-for-profit organisations, and the public sector.
The Target Operating Model
Capgemini define a target operating model as:
A high-level design of the organisation’s future operating model – the structure and style which enables it to meet its business objectives.
This concept is a core component of large-scale transformation programmes. The high-level design and vision shows how the organisation should be working - both in terms of hard (structure) and soft (style) dimensions. From this, increasing levels of detail can be developed to focus on the transformations required in business processes, organisation design, infrastructure, etc.
The ability to check ‘vertical consistency’ as detail is developed ensures that all ground-level implementations are correctly aligned to the operating model – ensuring optimum contribution to the organisation’s goals, vitality and robustness.
The Design Framework
A core piece of thought leadership created by Capgemini is a rigorous design framework to support analysis and design of operating models. This integrates the five dimensions of an operating model, allowing each to be examined in turn, and in terms of the inter-relations between them:
- Levels – from industry-level issues down to the level of major processes within the organisation: this dimension ensures the proportion and impact of changes is measured on the appropriate scale.
- External drivers – the factors that provide context for the operating model: this dimension examines how corporate and customer strategies fit with the factors beyond the management team’s immediate control.
- Business model – how an organisation delivers stakeholder value across a diverse and often conflicting set of demands: this dimension examines value creation, transfer and realisation within the organisation, and creates opportunities for benchmarking, identifying competitive advantage and importing leading practice where appropriate.
- Business System Components – the ‘building blocks’ from which options can be constructed to enable the organisation to respond to the requirements, challenges and opportunities of three dimensions above: this dimension identifies the resources available to the business, breaking down the conceptions of the current structure, organisation and infrastructure.
- Design principles – policies and approaches that define how the components can be brought together to build the operating model: this dimension includes both contextual (scope) and conceptual (operational) principles affecting the components.
The Capgemini Approach
Transformation Leadership consultants build a specific, bespoke approach to Operating Model work with each client, typically developed in collaboration with the client themselves.
The starting point for the approach is based around five questions:
- How is our current operating model performing?
- What performance improvement should we seek?
- What are our options to improve performance?
- How can we transform effectively to the new model?
- What is the best way to performance manage the new model?
These broad and far-ranging questions lie at the heart of almost every complex, large-scale transformation programme. Whether transforming a large division, a region or the entire business, Capgemini’s Operating Model expertise offers a proven, robust and reliable approach to:
- Identify Optimum Strategies – maximising competitive advantage
- Maximise Resource Effectiveness – increasing return on capital
- Reduce Risk – increasing business value
- Accelerate Implementation – outpacing competitors
