A target operating model, or TOM, represents the ideal future state of your business. If everything were working perfectly, this is how people, processes and systems would function.

Read on to discover the benefits of a TOM and four areas to consider when creating one.


A target operating model helps set the business direction

A TOM is not a strategy, although the two are linked. It’s the template for how you want the business to work, whereas strategy is the plan that gets you there.

Every organisation should have a target operating model, whether it’s a small, innovative start-up or a huge, long-established corporation.

Often represented visually, a TOM can be a single-page document or run into hundreds of pages.


Example operating model

Example operating model diagram

Image source: BusinessOptix


Use a TOM to drive operational excellence

TOMs are usually created to manage major changes, at the start of a business transformation process. As such, they involve input from senior leaders in the organisation.

Despite this, they’re not necessarily used exclusively to manage company-wide transformations. They can cover changes to an individual function, for example finance. And for a start-up business, showcasing your ambitions and plans can help gain funding from potential investors.

A good, well-designed TOM helps you structure your business transformation plans effectively. Understanding people, process and resource requirements enables you to focus on actions that will drive growth and achieve your objectives.


Four building blocks of a TOM template

In creating a TOM, you need to consider your business in relation to these four key areas:

  1. Understand the current state of the business (current operating model)
  2. Define the future state
  3. Implement the future state
  4. Monitor, measure and evaluate progress and achievements


Top-level operating model example

Top level operating model diagram

Image source: BusinessOptix


How to design a TOM template

We can help you define and create a customised, interactive TOM, using the capabilities of the BusinessOptix platform. Contact us for a free, no-obligation chat.

Find out more about what BusinessOptix can do for your business.


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This article is adapted from a more detailed white paper by BusinessOptix. Download the full white paper here: enabling your business to run, grow and transform.