IT Transformation and the “Target Operating Model” Approach

A lot of IT Service organizations are facing significant challenges due to the economic situation, new business models and strategies (i.e. mergers and acquisitions), sourcing models (i.e. cloud services) and technology opportunities (i.e. social media, “big data” management, BYOD).

Often, CIOs find themselves in a position where they have to undergo a complete re-thinking of their current operating model to take into account all those new challenges and influencing factors and to set their teams up for a transformation program.

An excellent approach for a structured and comprehensive method to gather and categorize requirements, to build relationships and dependencies is a “Target Operating Model” (TOM). Such a TOM is an excellent starting point to define the “To-be” status for any transformation.

A Target Operating Model could be seen as a set of interdependend dimensions that need to be defined, managed and transformed in a typical IT Service Provider Organization.

Since the “Service” is the ultimate deliverable of any IT Service Organization, this dimension has been placed in the center of the model surrounded by the dimensions contributing to the services:

–       Processes, Organization, People, Technology

The umbrella is the “Governance” dimension. It holds together all dimensions, defining the perimeter of the TOM, its drivers, constraints and the anchoring within cooperate vision, mission and strategy.

Each dimension needs to be detailed with a set of documents describing the targets aligned with mission, vision and strategy.

The “Organization” dimension enfolds a set of deliverables, like

  • Organizational design criteria
  • IT function definition (i.e. 1st, 2nd 3rd level support)
  • Functional mandates (i.e. Service Desk)
  • Sizing and sourcing
  • Organizational charts

The order of detailing this dimension depends on the maturity of the IT Organization, its understanding of industry best practice frame works and the priorities of the transformation objectives.

The suggested order rather mature IT Organizations would run with, would be:

  1. Governance (vision, mission, strategy, risk and compliance, ownership)
  2. Services (the portfolio defines the scope)
  3. Processes (landscape)
  4. Organization (see above)
  5. People (job descriptions, training and development Framework, transformation matrix)
  6. Technology (standards)

Needless to say that this order is going to be performed within as much iterations as needed in order to complete the details based on checking the dependencies across all dimensions.

After the details of each dimension have been completed and the results have been syndicated with the IT Organization’s customers, partners, suppliers and other stakeholders, an implementation program of the TOM has to be defined.

How such an implementation frame could look like will be discussed in one of my future blogs about the “Controlled Service Environment” (CSE) – stay tuned.



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