May 20, 2016 - Explore rajatdhawan3591's board "Operating model" on Pinterest. Target operating model (TOM) is a blueprint of a firm’s business vision that aligns operating capacities and strategic objectives and provides an overview of the core business capabilities, internal factors, and external drivers, strategic and operational levers, organizational and functional structure, technology, and information resources of a company. Operating Model Cross-industry observations and lessons learned. The International Integrated Reporting Council’s framework describes a company’s business model as “its system of transforming inputs, through its business activities, into outputs and outcomes with the aim to fulfilling the organisation’s strategic purposes and create value over the short, medium and long term”. Companies like Spotify have been doing this from the start, with the ability to quickly introduce new products and services tailored to changing consumer needs. In effect, it is the way the business is set up to deliver. The latter will change frequently based on external factors. Debating the principles gives senior executives a chance to address the most vital issues, identify potential problems, and resolve ambiguity. In a nutshell, the core difference between a business model and an operating model is that a business model describes how a business generates value.

Eskom's business model.

See more ideas about Operating model, Business process, Model. A Target Operating Model provides the foundation and flexibility required to execute the firm’s goals. The Canvas has limited capacity; so only the highest-level thoughts can be included.
Business Model vs Operating Model – What is the Difference? For more detail, separate charts and models are needed for each section of the Canvas. A Target Operating Model is different to a firm’s business strategy. Operating models, which may also be called value-chain maps, are created to help employees visualize and understand the role each part of an organization plays in meeting the needs of other components.

Business Model Massmart has evolved a business model that empowers its Divisions to take trading decisions suited to their individual operating needs but within a strategic operating and financial framework set by the Group.

A Business Operating Model is the combination of roles, skills, structures, processes, assets and technologies that allow any organisation to deliver on its service or product promises. Before a company redesigns its operating model, a carefully drafted set of principles, typically between 7 and 15 statements, help align the leadership team around a set of objective criteria for designing the model. The cars that he produces are far more valuable than the raw materials that were combined to produce the car.


A business strategy is essential for helping achieve the target operating model and in turn influences the strategy. The Operating Model Canvas PowerPoint Template is an outstanding presentation of business strategies. 2 Digitalization forces organizations to place flexibility and time-to-market at the core of their business model.

The term Target Operating Model (or TOM) has been used a lot in many of the organisations that I have worked for all around the world, from London, to Mexico City, to Moscow, to Sydney, to Johannesburg, to Singapore, to Shanghai, and all the way away in Sao Paulo too.Many 100s of millions of dollars in business change budget has been invested in TOM projects all over the world.

Current Operating Model Assessment; Assess your current ways of working and your service capability and if these already exist in your business in any form; Analyse current operating model strengths and weaknesses; Conduct root cause analysis; Create high level recommendations to support the re-design of your operating model.