Enterprise Operating Model Introduction

Enterprise operating model (or business operating model) is the combination of roles, skills, structures, processes, assets and technologies that allow any organization to deliver on its service or product promises. In effect, it is the way the business is set up to deliver.

Before your business can generate income, and even before you build your company’s business plan, your business must have a model. The business model serves as the core of your business. It explains how your business will generate income without consideration of the internal and external environments that can affect successful implementation.

Identifying An Business Operating Model
An operating model is the first layer in the foundation for execution in an enterprise architecture.  The operating model is the business process standardization and integration necessary to deliver value to customer segments. It is the conceptual component in the organizing logic that defines an enterprise architecture. In this sense, the operating model is the initial manifestation of the business model when it is deployed as it indicates how value is created, delivered and captured by the business units in the enterprise.

How to Improve Your Current Business Operating Model?
Most organizations have a business operating model which has evolved rather than been designed from a clean sheet of paper. The design may never have been optimal, and it may be largely out of alignment with today’s realities.
Organizational design principles guide the way you create your business operating model. It is crucial that each organization develop their own principles, as they limit the possible design options. Without a clearly defined set of design principles you will end up either with too many options to consider, or you will apply a hidden set of principles that have not been tested.

Luckily, there is a structured approach to improving a business operating model. The following provides an overview of this approach. It is important to be able to integrate a number of factors into your design:

A clear understanding of what you want to be as an organization, and a high level plan to get there (the “strategy”);
A set of principles to inform your organization design;
A willingness to look outside of the organization and even outside of the industry for different ways of doing things;
A willingness to challenge the organization’s assumptions and sacred cows;
An ability to capture role and process information in detail quickly so that you can plan how to get from where you are to where you want to be);
A willingness to involve a broad representation of personnel and management in an intensive organizational design workshop so that the design is not just done at the desk of the CEO, but engages staff and maximizes buy-in.

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