In many areas of strategic planning, we often rely on a map to clearly visualise our current state, our envisioned state, and the path to get there. For organisations managing strategic transformations, a Target Operating Model (TOM) is this map.
A TOM communicates how the key components underlying the operations of a business can continually be restructured and aligned to meet the demands of an ever-changing economic landscape. It serves as an instrument for effective group planning and decision making and provides the high-level view and language for assessing and implementing change. As operations become increasingly digital, distributed and fluid, our maps must also reflect this level of dynamic activity.
Imagine a chess board with hundreds of pieces, where every piece represents a discrete activity that together constitute the entire operations of your business. Co-ordinating all of these pieces into a coherent strategy of attack is incredibly challenging, and in the retail world, many organisations don’t have clear visibility of all the pieces in play, how they interact and how they respond to the external forces that drive markets. Without an accurate model, we’re blind to the broader and longer-term consequences and goals of our changes.
From budgeting and design to logistics and sales, a TOM helps understand the complexity of your operations across different functions and levels. It captures all the business processes that define your product curation and selling cycle and helps organise and categorise those processes in ways that get to the heart of the operational structure that fulfils your value.
As retail becomes increasingly digitised , correlating with a faster rate of operational change, our models must become more dynamic and flexible, adapting to opportunities and complications as they arise. Recent events have forced retailers to operate in a much more agile way, becoming omni-channel, highly logistical and data-intensive. This agility becomes increasingly difficult to execute without the right level of over-sight.
Thinking of upgrading your ERP system? Thinking of restructuring roles and departments? Thinking of expanding into new channels of commerce? Thinking of offering new delivery mechanisms? The TOM helps you understand the impact of all of these changes across the organisation and the benefits and risks that they entail. It triggers insights and guides feedback on an optimal operating model, and crucially, it helps gain perspective on how each change contributes to the global aims of the company.
TOMs are often represented as static charts created in an ad-hoc, disposable way for a singular purpose, but the best TOMs are dynamic, interactive and long-lived, guiding areas of business development and constantly evolving as you execute on your strategic objectives over the long-term. They help us recognise opportunities for investment over long- or short-time horizons and how to stay agile when we need it most.
The importance of a Target Operating Model has led us to develop our own tool to support the operational and business vision of our clients. CMG’s Retail TOM Tool is designed to:
• Pinpoint areas requiring development and assess their impact and priority
• Analyse changes and risks and contrast the As-Is and To-Be models
• View your business model from different perspectives and levels of granularity
• Organise roles and responsibilities
• Architect information and technology infrastructure
• Map ways to efficiently allocate resources
• Support process optimisation and Value Chain development
• Build complete operational awareness and stakeholder buy-in
• Support continuous feedback and iteration on organisational change
• Promote regular review of operational and strategic objectives
• Organise tasks and share documents
• Plan long-term strategic goals and execute short-term tactical projects.
Our Retail TOM Tool serves as a long-term roadmap towards operational excellence and agility. Through our international work across the retail industry, we constantly refine our models of an operationally effective organisation based on market trends, technological innovations, and economic conditions. We help map your TOM and align it with your ambitions for growing business value. We advise on common pain points, risk areas, strategic approaches, options, hidden dependencies, and effective priorities.
Get in touch to find out how CMG can help you build a Target Operating Model to meet, plan and realise your strategic objectives.