“An operating model helps you see how strategy translates into day-to-day activities.”
An operating model can be thought of as the way that people, processes, and infrastructure (including technology) combine to deliver a set of organisational results or outputs. Or to put it another way, it is a way of modelling how an organisation, business unit or function translates strategy into day-to-day delivery of products and services to its internal or external customers.
Operating model redesign is often one of the first steps in strategic execution. Sometimes an organisational restructure suffices. In other instances, leaders find that a full-scale operating model redesign is required as the restructure necessitates changes to business processes, IT, facilities as well. For example:
- When a process is outsourced, operations management roles are replaced by vendor management roles, engagement with other parts of the organisation change, and physical facilities and infrastructure may no longer be required. Cost structures and risks need to be managed differently.
- When a shared service operation is established, there is a change in the mix between centralised and decentralised services. Jobs can migrate between the shared service operation and business units, and roles for both may change. Cost recovery mechanisms can also lead to behavioural changes in users.
- The introduction of a new technology, say, migration to a software-as-a-service or “cloud” application usually leads to job role and infrastructure changes within IT, and may also require new processes and procedures in the business as well.
“I hired Stephanie as a consultant to help me develop an operating model in response to a regulatory requirement. Her well-honed structured thinking skills and focus meant that we were able to deliver a quality product against a tight deadline. She was also great value for money.” – Rajeev Dewan, Strategist at MLC
Example past assignments:
- Review of operating model to align with a business unit’s strategic requirements (read more)
- Managed a A$25M program to implement a new HR operating model in a major bank, consisting of a new shared service operation for transaction-based services, centres of expertise for specialist HR services, and a restructured line HR function to provide strategic HR support close to the business.
- Designed the operating model for delivering compliance training, as part of a remedial program to address ASIC Enforceable Undertakings in a wealth management organisation.
- Designed the operating model for a proposed market entry insurance venture, using a combination of offshoring, outsourcing, and internet-based elements.
- Assessed the feasibility and financial model for an offshore finance shared service operation for a global professional services organisation.
- Designed and implemented a new operating model for project risk management within a major division of a major bank, including the change strategy for impacted stakeholders.
- Reviewed the structure and roles between business units and corporate centre for a bank’s operational risk function with a view to redesigning its operating model.