AnOperatingModel is the unique configuration of people, processes, and technology used to conduct the day-to-day operations of an organisation. In effect, an ICT/Digital Operating Model implements an ICT/Digital Strategy.
An ICT/Digital Operating Model translates strategic intent into operational capabilities. It serves as the foundation for execution and provides a clear guide for the organisation’s leadership team, line managers and operational teams. A well-defined and articulated operating model provides the bridge between organisational business strategy and day-to-day operations that guides the team, provides the context, and enables behaviours that will realise the strategy and vision. Operating models aren’t just reserved for large companies – regardless of size, all organisations should have an operating model of some kind. In some cases, it might be brief or not very prescriptive, but should still exist and be maintained to help bridge the gap between the why and how. ICT organisations without an operating model of any shape at all run the risk that strategy won’t be realised, processes will not be optimised, and staff won’t be aligned to a common view of how the technology organisation should work to deliver business value.
The operating model in its simplest form shapes where and how critical work gets done across an organisation. It serves as a vital link between a organisations’ strategy and the detailed organisational design that it puts in place to deliver on the strategy.
Building a fit for purpose operating model continues to be an elusive goal for many organisations. They are struggling with the symptoms of an underperforming operating model, including business units and functions that protect their own priorities to the detriment of the overall organisation, hoarding or wasting resources and a culture that dismisses accountability.
Among other things, an operating model determines and drives behaviour, workflow and process design, decision making, and investment decisions. When an organisation’s operating model is inconsistent with the broader objectives of the business, that misalignment affects the day-to-day actions of individual employees and ultimately creates an insurmountable gap between strategy and execution.
Organisations with a Capabilities-Driven Strategy have a great starting point for developing their operating model because they have clarity about the “what” (the way the company creates value through its capabilities) and can therefore define the “how” (the way to organise to create value).
Starting with a Capabilities-Driven approach to establish clarity about the “what” (the way an organisation creates value through its capabilities) before defining the “how” (the way to organise to create value). After that’s in place, working to develop an operating model that brings strategy to life, by determining the organisational imperatives for:
- delivering the value proposition
- building the company’s differentiating capabilities
- executing its strategic priorities
Finally developing an operating model blueprint that puts differentiating capabilities at the heart of key organisational elements and develops a roadmap for change.