How to Design an Operating Model

Have you ever been faced with the challenge called ‘Operating Model’? Well, to be honest, I have. Actually, I was under a huge pressure then as I was expected to deliver something that I had never worked on before, in a quite short period of time. But, I successfully worked it out.

Therefore, I would like to share my experience and briefly describe how I approached to designing operating model, hoping that It might help others who find themselves in the similar situation.

Step 1: Define the scope of the operating model

 The principle for this is exactly the same as that needed for defining the scope of any project.

 Step 2: Bear in mind the following (simple) description of operation model

 The operating model is required to answer who/what/when/where/ how are operations performed. It means that the operating model should cover relevant operations, inputs, outputs, resources, control mechanisms (rules, instructions etc) and their correlations.

 Step 3: For mapping the operations, put in use the same methods that apply for business process mapping

Learning about operating models, I was overwhelmed with hundreds of articles explaining differences between business and operating model design and strategy. But, I have noticed that every presented operating model was based on who/what/when/where/ how elements, thus realizing that the identical structure was used for building both business and operating models.

 Step 4: Present the operating model graphically with a type of diagram that will include all of the elements mentioned in Step 2.

The major issue for me was that I could not find standard diagrams intended for designing operating models as they seemed to miss. On the other hand, I could not interpret any of the examples of operating models that I had an opportunity to see, and I needed ‘my’ operating model to be understood by both IT and non-IT audience. Therefore, I decided to use one of business model diagrams to create the operating model, and it worked fantastic.

 (My choice was IDEF0 diagram. It was/is supported by MS Visio, but I used ER Win Process Modeller)

At the end, one additional suggestion… No matter what approach you decide to take in designing operating model, I believe that creating an operation hierarchical tree would be a good start. In my case, It was very helpful as I managed to identify and remove redundant operations, reducing complexity of the operating model I worked on.

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