Introduction

Companies on a growth journey often come to a point when taking the decision to set aside time to refine and/or reassess its operating model. Initiating such a program is often associated with multiple challenges but would also bring multiple benefits if successful. Regardless of whether your business model is built on flexibility and tailored solutions or aimed at streamlined operations focusing on efficiency, volume, and cost – a well-oiled operating model is needed and can help your business in the execution part.

To help getting off to a good start and to make sure an operating model program keeps on track, several factors need to be addressed. The complexity and scope of such a task may be daunting. To help power program efficiency and limit the risk of not reaching the desired target, we propose paying extra attention to a number of aspects as listed below.

Laying the Groundwork: Defining Processes, Scope, and Objectives

 

1. Agree on a high-level process landscape

Without strong agreement on what your company’s key business processes are, there is a high risk of getting stuck in debates on scope, (functional) responsibilities, and overall ambition level with the Operating Model program.

Ensure agreement of scope with key stakeholders early on and assign ownership to each of key process to help make sure key decisions are taken in the work with developing future state. Below is an example on how a high-level process landscape might look like for one company. However, what is considered a supporting process for one company can for another be considered a core business process.

2. Identify and Address Core Pain Points

Understanding and prioritising the real pain points across the organisation is important to ensure that focus is on solving the most pressing questions that help the business see the true value of the work.

Engage with people in the organisation to identify, categorise, and prioritise pain points in appropriate categories (e.g., process, people, IT, governance). Typical pain points within e.g., the travel & expense process in finance, might be a time-consuming process for handling expense receipts, a document intensive process for applying for corporate credit cards and lack of personnel to handle the requests.

 

3. Tackling High-Impact Areas First: Do not try to solve everything at once

Trying to solve everything (all at once) and not just the most important pain points may probably result in a prolonged and inefficient operating model program and the desired target may not be achieved.

Build your future state by continuously focusing on the true pain points and manage your scope to ensure progress (e.g., in sprints). It is not possible to address all management processes, core business processes and supporting processes at once. If, for example, finance is considered one of the areas with most urgent pain points, it should be addressed first and later pain points within other areas can be addressed.

 

4. Collaborative Redesign: Involve relevant stakeholders

Cross-company involvement is vital to ensure that the organisation understands what the desired target is and the expectations on them as well as their contribution in capturing current issues that they experience (which would need to be addressed). Change is embraced best when you feel involved.

Make sure to involve people across the business, ensure that there is a combination of functional representation and operations. For instance, when addressing a process such as order to cash, many stakeholders (finance controller, treasury, tax, project manager, etc.) need to be involved as they are all part of the process.

 

5. Set up a Governance Framework

Inefficiencies and unclarities often come down to issues related to decision-making at various levels in the company. Agree on what key decisions there are, who should take them and when. Avoid bottleneck situations and limit the number of roles involved when possible.

For example, within finance there are many processes and the processes in turn have multiple decision points or approvals. There should be one role responsible for the order to cash process to ensure that the process runs smooth and without bottlenecks. The decision points within the process can have other roles assigned to them, e.g., treasury to decide on funds flow.

Conclusion

In summary, to ensure program efficiency and achieving the target when reassessing the operating model, make sure to agree on a high-level process landscape, find the true pain points, address what is important and do not try to solve everything. Try to involve the business as much as possible, and secure that governance and decision-making are clear in the processes.

At Opticos, our team of experienced management consultants specialize in guiding companies through complex operating model transformations. With our strong background in IT management and business process optimization, we offer tailored solutions to align your strategy, people, processes, technology, and governance for sustainable growth. If you’re embarking on an operating model reassessment, Opticos can be your trusted partner.

Authors

Jessica Grundström & Rickard Holmkvist