Target Operating Model - An Overview

By T.O. Adetunji

Introduction

Today's business world is more complicated than ever. The growing role of remote workers, increasing potential risk issues, and more sophisticated customer requirements make successfully navigating an ever-evolving market increasingly difficult.

For a company to remain prosperous, operate efficiently, and adapt quickly to such circumstances, it needs to develop a strategic plan for managing change. All companies share a common goal of expansion and growth, but each has its own goals and objectives.

To successfully achieve these goals and develop plans for further development, an organization must be able to adequately define its current state and the driving forces behind it. Target Operating Model (TOM) gives companies the tools to focus on their goals without jeopardizing their current work environment.

What is Target Operating Model?

A target operating model (TOM) is a blueprint that outlines the ideal structure, processes, and functions of a business or organization. It is an essential tool for business analysts (BAs) as it helps them identify areas of inefficiencies, redundancies, and improvement opportunities.

A target operating model is not a one-size-fits-all solution. Instead, it is tailored to a specific organization's needs and goals. The model is created by analyzing the organization's existing processes, systems, and structures, and identifying areas that can be improved to enhance efficiency, reduce costs, and increase productivity.

The primary objective of a target operating model is to help businesses optimize their operations and achieve their strategic objectives. The model can help identify potential risks and develop a mitigation plan. It can also help organizations identify opportunities for growth and expansion.

Steps In Developing A Target Operating Model

There are several steps involved in developing a target operating model.?

• The first step is to identify the organization's current state, including its strengths, weaknesses, and areas for improvement. This requires a comprehensive analysis of the organization's processes, systems, and structures, as well as its culture and people.
• The next step is to define the organization's desired state. This involves setting specific goals and objectives for the organization and defining the metrics that will be used to measure success. The desired state should align with the organization's overall strategy and vision.
• Once the current and desired states are identified, the next step is to identify the gaps between them. This involves analyzing the differences between the organization's current state and its desired state and identifying the areas that must be addressed to achieve the desired state.
• The final step is to develop a roadmap to bridge the gaps between the current and desired states. This involves identifying the specific actions that need to be taken to achieve the desired state and developing a plan to implement these actions.

Implementing a target operating model can have several benefits for an organization. It can help to streamline processes, reduce costs, increase efficiency, and improve productivity. It can also help to align the organization's operations with its overall strategy and vision, which can help to improve performance and drive growth.

Conclusion

In conclusion, a target operating model is a critical tool for business analysts. It helps organizations identify areas of improvement, optimize their operations, and achieve their strategic objectives. By following a structured approach to developing a target operating model, organizations can streamline their processes, reduce costs, and improve their overall performance.