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Factors to Consider while Choosing Operating Model for the Business

By CIOReview | Thursday, August 10, 2017

Today, most of the C-level executives have strong aspirational visions, to recruit highly skilled professionals. These proficient staffs have streamlined processes, which help them to finish the assigned task. However, in many cases, great leaders fail to achieve the true vision, because their executives couldn’t connect to the strategy in a practical way.

One of the major reasons for this downfall is the void between strategy and day to day operations. This calls for an efficient IT operating model that can guide the team, deliver the context, and enable the behaviors that will realize the strategy and vision.

There isn’t any universal way to operate an IT platform. The way of carrying out business model completely depends on individual Company, few companies choose to adopt fully owned data center, while others host everything in the public cloud—and there are various options in between.

An operation model helps enterprises in creating, delivering, and capturing value. Every business is in need of an efficient operation model that facilitates description and discussion. The complex part here is keeping the business model simple, relevant, and intuitively understandable. To achieve these demands, CEOs need to implement an appropriate operating model.

The higher executives must decide where to invest, what model fits best for the organization and also provide personal fulfillment. By keeping these following points in mind, CEOs can create a robust operating model: firstly, CEOs must know the objectives, needs and existing investment. In addition, they should also be aware of what type of team they need to ensure execution, and their mode of engagement with others in the organization. These are some of the fundamental choices that help a CEO to not just manage the operational process but also thrive in the fast-paced modern business environment.

The operating model basically provides a clear-cut clarity of how resources are organized and operated to get critical work done. It spans decisions that revolve around the shape and size of the business, how to distinguish between each line of business, how people work together within and across these boundaries, how the corporate center will add value to the business units, and what are some of the standards that should be encouraged.

IT Operating Models

Many executives think IT operating model just as a collection of boxes and lines connected to each other, while others perceive it as a detailed prescriptive guide. Generally, there are three standard types of operating models namely: Owned IT Operation model, Hosted Operation model and public cloud model.

Owning Cloud Environment

Cloud services, enable enterprises to cut down costs and operate more flexibly compared to conventional IT infrastructure. If a firm has plethora of custom proprietary software/ applications deployed across multiple systems then purchasing the IT cloud environment should be most efficient. However, the promising opportunities of this technology are followed by certain risks arising from migration.

Core elements to focus on while designing operating model:

Design principles: transforms the strategy into a set of defined rules on how the organization should operate. They also offer consistency, context and structure to assist the design process.

Governance: describes the decision-making and delegation of representatives, and builds the framework that stabilizes stakeholder interests and risk mitigation.

Culture & values: Defines the major attributes that organization intend to imbue within its people—by upholding the values of the company and acknowledging the company’s unique flair to work more effectively together.

Process: Defines the key capabilities the organization commonly exemplifies from an end-to-end perspective.