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OPERATING MODEL

GET OFF THE DRAWING BOARD
DESCRIPTION
• Describes relationships between these business
  operating units, decision and process flow for the
  units....
COMPONENTS


 BUSINESS
             TECHNOLOGY       PEOPLE
PROCESSES


      OWNERSHIP     METRICS
REASONS FOR DEVELOPING OPERATING
              MODEL
• Build reusable Core Capabilities
• Guide IT Investment decisions.
•...
HOW IS OPERATING MODEL
     DIFFERENT FROM STRATEGY?
• Business strategy and priorities change
  frequently based on exter...
TARGET OPERATING MODEL
• Align all components to effectively
  evaluate opportunities to
  maximize customer value.
   •  ...
CAPABILITY MAPS

TARGET OPERATING MODEL
DEVELOPMENT
BUSINESS CAPABILITY MAP
• A model of the firm associating the business
  capabilities, processes, and functions required
 ...
EXAMPLE – CAPABILITY MAP
TARGET OPERATING MODEL - POSSIBLE
   ORGANIZATIONAL STRUCTURES
2009 EXAMPLES

TARGET OPERATING MODEL
SHELL CHEMICALS
•    The Operating Model expresses the direction being followed by Shell Chemicals in
     delivering bulk...
GLAXOSMITHKLINE
•     GSK is a complex organization which has recognized the need to simplify the operating
      model to...
JOHN DEERE
•   Combines strengths of
    Agricultural Division and
    Commercial & Consumer
    Equipment Division into s...
CONTINUING TO DEVELOP…..
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Operating Model

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Transcript of "Operating Model"

  1. 1. OPERATING MODEL GET OFF THE DRAWING BOARD
  2. 2. DESCRIPTION • Describes relationships between these business operating units, decision and process flow for the units. • Describes how an organization operates across both business and technology domains. • Describes what is important for the organization. • Describes how the organization does business today. • Describes how the business co-operates across its business units.
  3. 3. COMPONENTS BUSINESS TECHNOLOGY PEOPLE PROCESSES OWNERSHIP METRICS
  4. 4. REASONS FOR DEVELOPING OPERATING MODEL • Build reusable Core Capabilities • Guide IT Investment decisions. • Drive the architecture and infrastructure foundation that enables the company to grow its business either organically or through acquisitions. • Implementation of business processes and IT systems.
  5. 5. HOW IS OPERATING MODEL DIFFERENT FROM STRATEGY? • Business strategy and priorities change frequently based on external factors. • Operating model provides the foundation and flexibility required to execute the firm’s initiatives.
  6. 6. TARGET OPERATING MODEL • Align all components to effectively evaluate opportunities to maximize customer value. • Business drivers are translated into new requirements that leads to a new Target Operating Model. • Target Operating Model represents the high level requirements, that drives the future Business and IT development. – Developing the Operating Model at a very detailed level requires substantial resources in both the business units and IT.
  7. 7. CAPABILITY MAPS TARGET OPERATING MODEL DEVELOPMENT
  8. 8. BUSINESS CAPABILITY MAP • A model of the firm associating the business capabilities, processes, and functions required for business success with the IT resource that enables them. - Forrester
  9. 9. EXAMPLE – CAPABILITY MAP
  10. 10. TARGET OPERATING MODEL - POSSIBLE ORGANIZATIONAL STRUCTURES
  11. 11. 2009 EXAMPLES TARGET OPERATING MODEL
  12. 12. SHELL CHEMICALS • The Operating Model expresses the direction being followed by Shell Chemicals in delivering bulk petrochemicals to large industrial customers, through standardized STRUCTURE global processes and at the lowest possible total cost. With sustainable development (SD) at its heart, the model also emphasizes the need for adherence to SD principles in all business areas. 1. Base chemicals (lower olefins, aromatics) 2. Styrene monomer/propylene oxide and DIFFERENTIATING THRESHOLD FACTORS derivatives 3. Ethylene oxide/ethylene glycols FACTORS 4. Solvents/phenol 5. Higher olefins and derivatives 1. Essential for the competitive positions of the Shell chemicals companies in the 1. Build strong customer relationships petrochemical sector to be secured. For CORE PROCESSES and offering customers the example, the portfolio of businesses products, services and ease of has to be balanced in line with the goal doing business that fits their of delivering bulk petrochemicals. • Operations and HSSE needs. 2. Each of the businesses in the portfolio • New Business Development and 2. Adopt standard global processes to also has to operate to world scale and Ventures ensure quick decisions and clear capture the resultant economies of • Strategy and Portfolio accountabilities. scale. • Human Resources 3. Right people, and the right 3. Working with the right cost structures, • Finance and Business Systems processes to ensure success. - an imperative that has led to • Innovation and Technology underlying emphasis on building substantial cost reductions in recent • Communications the ‘attributes’ and ‘behaviors’ years. among all Shell chemicals companies employees
  13. 13. GLAXOSMITHKLINE • GSK is a complex organization which has recognized the need to simplify the operating model to deliver on it’s strategic priorities. The company is removing unnecessary EVOLVE COMMERCIAL MODEL processes and structures. The new, simplified operating model will release more resources for investment and higher returns to shareholders. One single commercial structure to support Europe, Emerging Markets and Asia Pacific/Japan. In the US, TRANSFORM REDUCE WORKING CAPITAL pharmaceuticals business was restructured. This includes the transformation of the US sales force as MANUFACTURING well as the decision to designate a single • Current working capital requirement is headquarters for US Pharmaceuticals, located at around £7 billion. In September 2008 GSK Research Triangle Park, North Carolina to reduce • Manufacturing is a key capability at started a program which has successfully complexity and streamline US operations. GSK. Across the world manufacturing delivered cash flow benefits of more than operation is taking an ambitious £500 million. approach to transformation - matching network capacity to volume and leverage network of sites and CORE PROCESSES contractors to ensure the flexibility to sustain growth and adapt to changing business models. Also simplifying 1. Simplifying organization to speed up decision-making and improve alignment to business operating model to clarify roles and priorities. There are many different programs and initiatives across GSK including a responsibilities, improve prioritization comprehensive program to simplify and reduce costs in IT. Through an innovative partnership and decision making and introduce with Microsoft Online GSK will produce financial savings, improve productivity and enhance simpler, more efficient ways of collaboration internally and with our external partners. working. 2. Striving to ensure simpler and efficient cross-business processes and structures. For example, in Asia Pacific, GSK simplified the approval processes with Health Maintenance Organizations and public health bodies, resulting in an improvement in the quality of internal controls and savings on approval and collection times.
  14. 14. JOHN DEERE • Combines strengths of Agricultural Division and Commercial & Consumer Equipment Division into single Agriculture and Turf Division • Aligned regions represent geographies with shared customer characteristics • Five product platforms manage worldwide development, manufacture and delivery of equipment and solutions
  15. 15. CONTINUING TO DEVELOP…..

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