Introduction and challenges
There are many questions raised when organizations are considering their operating model. Is our existing operating model fit for purpose? What is its scope? Who should be involved in the review and design? What level of detail is required? Where do we start?
The challenge faced by many organizations is that they know they need to address their operating model, but the sheer scale of the task can be overwhelming. There is often a resistance to change, with people only able to see how things are done today. There can be an aversion to risk, with pressure to protect revenue and short-term financial performance, and often the complexity of the task is underestimated.
An operating model breaks an organization into its component parts, helping people to understand how everything fits together. Typically, this is split into areas such as supply chain planning, manufacturing, distribution, customer service, order to cash, sales and marketing. It should include processes, organization, systems and technology, people and capability, ways of working and governance.
It is important to recognize that transformation needs to be systematic. It is often about ensuring clarity of the end state and prioritizing and embedding changes in a sustainable way.
How we can help
We partner with clients at different stages of the journey, depending on their needs, and provide the following support:
- A clear framework to assess, design and embed a new operating model
- Clarity between the business or corporate strategy and the operating model. Identification and alignment to a clear set of operating principles
- A clear statement of future business requirements over the relevant time period (typically 3-10 years)
- Analysis of an organization’s strengths and weaknesses, highlighting existing core capabilities and gaps. We use our scprime® assessment approach to enable a rapid assessment
- Creation of the target operating model
- Education and engagement with stakeholders at all levels to ensure buy-in and alignment
- Business case development, including benefit case and cost of change analysis, highlighting realistic returns on investment depending on implementation options
- Implementation of the agreed transformation program, including central program management and delivery of agreed milestones
- Delivery of the governance structure to enable continuous review and development of the operating model; the market is an environment affected by continuous change, and organizations need to embed a capability to adapt accordingly
Implementing a new operating model should not be oversimplified. The approach needs to be customer-centric, it must be technology-enabled, it needs to challenge the status quo, and it needs the right leadership and capabilities in the organization to make it stick. We hold a mirror up to our client organizations so that they succeed the first time.