A Target Operating Model is essentially the blueprint for how an organisation operates. It defines how people, processes, and technology work together to deliver value. More importantly, it provides a framework for how the organisation will evolve, not just how it operates today.
Defining Success and Understanding the Customer
Every TOM project begins with a fundamental question: where do we want to be?
Defining success is often more complex than it first appears. Organisations need to establish a clear vision for the future and determine how progress towards that vision will be measured.
From experience, the starting point should always be the customer. Understanding customer needs, expectations, and pain points provides the foundation for any effective operating model.
At the same time, it is important to understand internal perspectives. Leadership teams, operational managers, and front-line employees all play a role in shaping how the organisation functions. Gathering insight across these groups helps ensure the model reflects both external demands and internal realities.
Innovation, KPIs, and Change Management
Innovation is frequently discussed in transformation programmes, but it only becomes meaningful when it is linked to measurable outcomes.
Organisations must identify where they can differentiate themselves and create additional value. Clear key performance indicators (KPIs) are essential in this process, providing the benchmarks needed to track progress and evaluate success.
Equally important is change management. Establishing a strong Case for Change early in the process helps build organisational alignment and reduces resistance later on. Clear stakeholder mapping and defined responsibilities, often through tools such as a RACI model, ensure that accountability is understood from the outset.
Assessing the Current State
Before defining the future operating model, organisations must first understand their current state.
This involves evaluating existing processes, systems, and performance metrics. Are current technologies being used effectively? Are operational processes delivering the intended outcomes? How do existing KPIs compare to the organisation’s strategic goals?
Data plays a central role at this stage. The more insight organisations gather about how they currently operate, the more informed their transformation decisions will be.
Ideation and Alignment: People, Process, and Technology
Once the current state has been assessed, the focus shifts to developing ideas that move the organisation closer to its future vision.
This ideation phase is where strategy begins to translate into practical initiatives. Potential improvements are identified and then prioritised based on their expected value and implementation effort.
A critical factor in this stage is alignment between people, processes, and technology. Organisations often invest heavily in new systems without ensuring that supporting processes and workforce capabilities evolve alongside them. When these elements are not aligned, even the most advanced technology can fail to deliver its intended value.
Roadmapping and Delivering the Transformation
With priorities defined, the next step is to build a clear roadmap for implementation.
The roadmap outlines how initiatives will be delivered over time and how they contribute to achieving the target operating model. Effective programme management ensures progress is tracked and benefits are realised.
Tools such as PMO trackers, benefit registers, and performance dashboards help maintain visibility throughout the transformation journey.
Celebrating milestones is also important. Communicating progress and demonstrating early wins can build momentum and encourage wider organisational engagement as the transformation progresses.
