THE OPERATING MODEL BLUEPRINT:


LINKING WHERE YOU ARE NOW TO WHERE YOU WANT TO BE IN THE FUTURE

"Culture eats strategy for breakfast." Peter Drucker

The operating model of a business links strategy to operations by providing a clear view of how the organisation functions to support the business. It breaks down the essential components of an organization or function i.e. People, Processes and Technology.

By examining and documenting your current operating model (the present state) you have the foundation to redesign your target operating model (the future state). It is the programme level of planning, sitting betweeen the high level strategy and detailed project planning and execution.

Designing an effective target operating model, or blueprint, it needs buy-in from the key stakeholders. Why people commit to change? Because it will deliver the outcomes and benefits outlined in the vision and strategy. The case for change is it will enable benefits to be realised after enhancing the organisation's capability. This can be analysed in the following scope groups:

Digital Teams
People

All transformations will fail without a permanent positive change in people culture and behaviours.

Process Workflows
Process

Where the end to end process mapping becomes key to identify steps that should be removed.

Digital Teams
Technology

It is vital to the change as a key enabler, but without the other two groups there is no transformation.

With all the available digital tools and technology it should be easier than ever for Finance to transform. Why then is this not the case? Perhaps because Finance Leaders have too many options that it’s difficult to identify the perfect solution.

In this case where it limits progress we should consider simply aiming for better rather than perfect. Other reasons that may prevent securing the support for a transformation programme include:

  • Finance see no urgency to change and see their existing systems as fit for purpose, is this true or merely complacent?
  • Limited expertise with a proven change methodology and insufficient capability to transform
  • Weak Business Case and low ROI e.g. teams that cannot link investment in Finance to business growth
  • Not committing to any solution due to fear of vendor lock-in
  • Complex business systems with multiple failure points that need significant resource to analyse fully
  • Low risk tolerance because risk of failure linked with change prohibits progress, further enabled by the fact that...

... the costs and risks for Finance to transition away from legacy architecture increases as more time passes making executing change much harder!

Project Management Image

"Ideas are easy. Execution is everything." John Doerr

The change process has been defined by various proven methodologies and frameworks i.e. Waterfall (PMP, MSP/PRINCE2), AGILE (SCRUM, KANBAN), Lean Six Sigma (DMAIC, SIPOC, KAIZEN), Change Management (ADKAR, Culture mapping) etc. With the same basic components, but greater emphasis on different parts. As with Finance these are a collection of tools, each with their own unique strengths and applications, best placed to tackle certain specific problems.

However, the general components to executing a transformation successfully are:


Charter
Define the purpose and need to change laying out a clear vision for the desired future state

Stakeholders
Identify and communicate to those impacted by the proposed change to get alignment and buy-in

Business Case
Analyse the benefits vs costs, determine funding and key resources needed to ensure a tangible Return on Investment

Kick off
Get formal approval for funding and initiate the project start by announcing using appropriate channels

Project planning
Get all the necessary inputs and develop ambitious, achievable plans that can be monitored

Resources
Assemble and coach effective teams to champion the project and apply their role to success as change agents

Governance
Monitoring project progress in terms of timing, cost and scope plus ongoing Risk and Issue management

Analysis
Analyse the gap between the current state and design the blueprint to the desired future state

Measuring performance
Establish effective KPI’s that focus on leading indicators with an emphasis on both timing and quality

Reporting
Ensure progress status reports are accurate, timely and easily accessible to stakeholders

Communication
Continuously keep everyone informed so issues can be effectively addressed

Project Closure
Monitor post-launch and follow up to ensure stakeholder satisfaction and that benefits are realised

There are many essential traits required to execute transformation successful comprising both technical (hard) skills as well as interpersonal (soft) skills. Some soft skills required to lead successful transformations are influence, communication, focus, ownership, integrity, curiosity, creativity, empathy, persistence and resilience.