An IT operating model defines the framework an IT organization uses to interface with business, develop applications to meet requirements, and deliver services to customers. It establishes key elements like processes, governance, sourcing, service support, service delivery, and organizational structure. Designing an effective operating model is important because it provides a standard interface between business and IT, standardized functions and processes, and an approved view of how IT operates. The methodology to design an operating model involves conducting interviews with stakeholders to understand roles, functions, information exchange, processes, procedures, governance, and responsibilities.