Do you know the Difference?
A Target Operating Model is a transformational TO-BE vision of the current AS-IS Operating Model which must be aligned to deliver the objectives of the Business Model as defined by the business Strategy.
The Operating Model must not be confused with the Business Model, even though this is often the case in many organisations.
The Business Model delves into an organisation’s markets, customers, and value propositions and how to effectively commercialise the business.
Its focus is on how to bring about profit through revenue streams from product offerings, while looking at some of the activities and resources that are required to deliver the product offerings, and service customers.
The Operating Model, on the other hand, is a lot less sexy because it is responsible for the HOW, WHERE and WHEN. It is part of the execution lifecycle of the business Strategy while the Business Model is part of the design.
Success comes from both the design of the best strategies and then the execution of these strategies to the right degree.
So, a Business Model without an Operating Model is lost, and unlikely to succeed in delivering the value that it promises to a business enterprise and its customers.
At Explic8 Limited, we have years of experience assisting companies to define the correct Operating Model to ensure success of the Strategy and Business Model, taking the best from the AS-IS and dovetailing it into the TO-BE.