Incorporate environmental policies in the plan that you create.

Sustainable
development guidelines preserve the environment and also help your business
appeal to people who are very interested in conservation.
1. Step 6
Work a production threshold into your business operating model so you know how
much growth you can sustain before you need to expand your facilities. Your limit
may depend more on capital than space if you are in a small startup company.
!. Step "
#reate a target operating model that details how the company will develop in the
best case scenario. In addition to things like market share and $nancial goals% the
target model should include infrastructure% personnel and technology growth.
&ead more' (ow to )evelop a *usiness +perating ,odel -
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Tips & Warnings
+nce you develop your operating model% try to sum up your plans in :ust one
sentence that explains what you make% who you sell it to and why you;re doing it. <se
this sentence in your company literature to lure investors to your company.
Your operating model must also include things like company culture% decision
rights and use of technology.
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model.html4ix550v6:ree=s
A business operational model is a roadmap for managers and employees to use as a guide for
leading a business along a path to success. Operational models place the mission of the
company, and the means to achieve that mission, in front of employees for reference and
inspiration. A good operational model is easy to access by all stakeholders and is open to
amendment and change as environments and conditions change around and within the business.
Even the smallest business enterprise should have an operations model.
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manual.html4ix550v6k>?c,I
Conceptual Business Operating Model
The Conceptual Operating Model of a business is used to understand what the key areas of the organisational
structure should be, how they would associate with each other and what each area does.
The conceptual model is concerned with how the business should look, not how it does look now. It can be
useful to allow understanding of what the key areas of the business are and how they interact. It allows an
organisation to focus on where they need to be and to plan to move towards this.
Capturing the Operating Model
The Business Operating Model is captured - in terms of the design of the organisation - by defning Business
Roles. These are used to represent the DESIGN of the organisation, in terms of the roles that are required and
how they are related. Business Roles perfom Business Processes and can be groups, departments, teams or
job roles within the enterprise, representing many levels of granularity as to how the processes are performed.
Roles can also own a process.
To capture the business operating model, the key relationships between Business Roles are:
Containment - capturing the sub-roles that make up a Role, e.g. the Business Roles that are required to
make up a logical team (Group Role)
Responsibility - capturing those roles to which a Business Role is responsible
http://www.enterprise-architecture.org/business-architecture-tutorials/92-conceptual-
business-operating-model
Operating Model is a term that is used in many contexts. An Operating Model is the abstract
representation of how an organisation operates across process, organisation, technology
domains in order to deliver value defined by the organisation in scope.
Any organisation is a complex system consisting of several different interlinked logical
components. An Operating Model breaks this complex machinery down into its logical
components and deploys the appropriate analysis and design techni!ues for each component in
order to deliver better value.
An Operating Model can be used as a framework for formulating Operations "trategy # explicit
choices about the best deployment of organisation$s elements to achieve the business goals. %t is
usually informed by the &usiness Model. %n some cases, an Operating Model can become the
source of competitive advantage and can inform the &usiness Model.
'he Operating Model can be a vehicle product to describe how the organi(ation does business
today ) the *as)is* Operating Model. 'his can be the foundation for an organi(ation that wants to
transform its business. +ew business drivers can be translated into re!uirements that can lead to
a new *to)be* or *'arget* Operating Model. 'he 'arget Operating Model represents the high level
re!uirements that drive the future &usiness and %' Architecture design.
Contents
[hide]
1 Operating Model in Contet
2 Operating Model !e"ined
# $istor% o" Operating Model !e&elopment
o #.1 Origins in Corporate 'trateg%
( Center "or )n"ormation '%stems *esearch
+ *ole in !e"ining the ,usiness and -echnical
.rchitecture
/ Creating a !ialogue between ,usiness and )-
0 )ndustr% 'tandard Operating Models
1 'ee also
9 *e"erences
[edit]Operating Model in Context
"everal related terms are often used interchangeably to describe a business but are actually
!uite different as illustrated in ,igure -.
A &usiness Model describes the rationale of how an organi(ation creates, delivers, and
captures economic, social, or other forms of value. 'he process of &usiness Model design is
part of business strategy.
An Operating Model describes the necessary level of business process integration and
data standardi(ation in the business and among trading partners and guides the underlying
&usiness and 'echnical Architecture to effectively and efficiently reali(e its &usiness Model.
'he process of Operating Model design is also part of business strategy.
A /apability Model describes the capabilities necessary to execute the Operating Model.
'he process of /apability Model design is part of Operations 0lanning.
Figure 1: Relationship between Operating Model and Capability Model
[edit]Operating Model Defined
An Operating Model for a business is a strategic schematic which illustrates
the relationships among the operating units and trading partners and provides a set
of guidelines for both the business architecture and technology infrastructure that enable a
company to grow its business either organically or through ac!uisitions.
Strategic. an Operating Model is a strategic choice as to the extent of process
standardi(ation and data integration desired to achieve business results.
Relationships. refers to the degree of cooperation across business units including
customers, suppliers and trading partners, re!uired for efficiency or leverage.
Guidelines. clarify what is important for the organi(ation today and the rationale for
investments so that leaders are aligned. 1hen the Operating Model is changed, the *to)
be* model sheds light on the transformations re!uired for future success and the
decision process for investments among the units.
[edit]History of Operating Model Development
[edit]Origins in Corporate Strategy
Operating Model as defined here is similar to Corporate Strategy. *the relationships among
the businesses in the corporation2s portfolio and the process by which investments will be
determined among them.*
3-4
'here are three basic models.
Holding Copany. each business has wholly self)contained brands5businesses with
dedicated core and support work. 'he businesses are tied together only by a common
funding source and financial re!uirements 6e.g., 'yco %nternational7
Federated or !llied. each business contains the core work re!uired to create advantage
autonomously. %ssues of common interest are identified and worked among businesses.
"upport organi(ations develop uniform policies and practices across geographies, tailor
them to meet the needs of each business and help achieve synergies across
businesses where desired 6e.g., access to customer, product files, needs to have own
accounting tied to corporate7. "ome support work may be shared across businesses
6e.g., /anon or 8E today7
"ntegrated. single business, re!uiring a single business strategy for competitive
advantage. %mportant business issues are formulated centrally and tailored for local
needs to optimi(e the entire business. "uccess is measured by adding up the global
numbers 6e.g., Mc9onalds or :arley 9avidson7.
,ollowing are some of the operating implications of the choice
3;4
.
Component Integrated Allied Holding
,usiness 'trateg% One Man% Man%
Customers 'ame 'hared Man%
Corporate *ole *esource allocations !e"ine 2rotocols 3inancial roll-ups and anal%sis
$uman Capital Common 'ome 'hared )ndependent
)- '%stems Common Common !i""erent
4nabling 2rocesses Centrali5ed Centrali5ed !ecentrali5ed
'his *large grain* view informs many decisions about how to design and build the
capabilities that make up the organi(ation. ,or example, the first choice for a :olding
/ompany such as 'yco %ndustries would not be to try to run all of the companies in its
portfolio on a single configuration of the same financial management business applications.
:owever, the *large grain* view insufficiently informs decisions within each model. ,or
example, the ,ederated5Allied model suggests common %' "ystems. :owever it is common
that the /orporate5:ome Office /ompany shares little with its 9ivisional /ompanies. M%'2s
/enter for %nformation "ystems <esearch presents a useful model which provides a way of
thinking about the need for multiple Operating Models for a given /orporate "trategy.
[edit]Center for Information Systems Research
/%"<, a research group at the M%' "loan "chool of Management has defined Operating
Model in terms of this lightweight method to capture the business needs for degree of
&usiness 0rocess "tandardi(ation and 9ata %ntegration. /%"< suggests that this type of
Operating Model is useful to establish re!uirements for reusable /ore /apabilities and to
guide %' %nvestment decisions governance. 'he Operating Model can be used to drive
architecture and infrastructure development ensuring that business needs are met with the
right %' foundation. 'he resulting %' systems enable the company to grow its business,
without having to do deep surgery on the %' systems each time the business grows either
organically or through ac!uisitions. 'he implementation of integrated business processes
and %' systems is the reali(ation of the Operating Model.
'he team of =eanne 1. <oss, 0eter 1eill and 9avid /. <obertson summari(ed their
research in Enterprise Architecture as "trategy.
3>4
'hey found that an organi(ation with an
explicitly defined operating model report >-? higher operational efficiency, >>? higher
customer satisfaction, and a >@? advantage in new product development. %n an extension
to the earlier /orporate "trategy work, they outline four operating models.
#rocess Standardi$ation
Process Integration Low High
High Coordination 6ni"ication
Low !i&ersi"ication *eplication
Coordination # businesses re!uiring low business process standardi(ation but
high business process integration 6/ompare with Allied "trategy # where
subsidiaries provide varied products to the same customers7
%ni&ication ) businesses re!uiring both high business process standardi(ation
and high business process integration 6/ompare with %ntegrated "trategy7
'i(ersi&ication ) businesses re!uiring low business process standardi(ation and
low business process integration 6/ompare with :olding /ompany "trategy7
Replication ) businesses re!uiring high business process standardi(ation but low
business process integration 6/ompare with ,ranchisees or <eplicated ,acilities
of an %ntegrated "trategy7
[edit]Role in Defining the Bsiness and !echnical
"rchitectre
Operating Models drive the necessary level of business process integration and
standardi(ation to deliver the organi(ations proposition, goods and services to
customers, shareholders and it people.
3@4
On the &usiness Architecture side, the Operating Model informs &usiness
Architecture as to the number of distinct market facing entities, the number of uni!ue
value propositions, and the number /apability Models re!uired. ,or example, an
%ntegrated Enterprise would have one customer facing brand and a single core
/apability Model and a :olding /ompany would have one for each company in its
portfolio. 9epending on business strategy choice 6profit propositions and value
propositions7, a ,ederated5Allied "trategy may re!uire more than one /apability
Model.
'he Operating Model also informs %' and other support services as to the value and
appropriateness of shared services and related "ervice Aevel Agreements.
On the 'echnical architecture side, the Operating Model informs %' leaders about how
various technical and business components should be designed and implemented to
enable the chosen Operating Model.
3B4
Component Coordination Unification Diversification Replication
Customer !ata 7 7
2roduct !ata 7 7
'hared 'er&ices 7 7 7 7
)n"rastructure -echnolog% 7 7 7
2ortal -echnolog% 7
Middleware -echnolog% 7
Operational 2rocesses 7 7
!ecision Ma8ing 2rocesses 7
.pplication '%stems 7
'%stems Component -echnolog% 7
,rom the table above, it is shown that /oordination and Cnification models benefit
more from consolidated views of /ustomer and 9ata across the enterprise than do
9iversification and <eplication models.
[edit]Creating a Dialoge #et$een Bsiness and I!
'he Operating Model is an important tool in the dialogue between business and %'.
'he dialogue can take place with top management and enable them to decide which
operation models best describe the way they choose to operate the company. %' can
also start with individual business units to identify the models 6or mix of models7 are
currently in place helping clarify both intent and sources of synergy and disconnect
between business and %' systems.
"uch dialogues allow %' management to use the Operating Model as "trategy to drive
design of concrete plans to enable the business in the form of %' proDects.
As valuable as the result of the dialogue may be in terms of aligned plans, is the
organi(ational learning that takes place through the dialogue, choices, and translation
of the Operating Model intoEnterprise Architecture and %' 8overnance that guide and
control %' investment over time.
[edit]Indstry Standard Operating Models