Target Operating Model TOM – Optimum operational design

Winchester White can help you develop an Operating Model in 6 to 8 weeks.

There is no such thing as the perfect operating model. Our world is dynamic and by definition businesses will, therefore, continue to find improvements to their operating model to meet business objectives. The investment in exploring the optimum operating model should therefore be pragmatic and seek to avoid highly complex labour intensive programmes that could:

• absorb significant resource
• create political tensions as people try to define their “patch”
• take many months (even years) to complete
• take the business on an implementation journey that is overly complex and ultimately unachievable.

Building a new operating model or improving on an existing one must be predicated on a balanced set of business objectives. Focussing purely on cost reduction, for example, may satisfy a short term aim but will not necessarily improve the customer experience.

The size of the task will depend on how out of date the current model is against the external business environment. During a period of high market growth, it is easier to overlook poor performance in terms of efficiency and effectiveness. As growth slows, maintaining or increasing market share begins to rely more on the delivery of a competitive customer experience. Frequently in the financial services industry high volume growth is matched by increasing short-term fixes in service and support areas. The resulting strain between the customer offer and reality of the experience can put the entire business into permanent fire fighting duty. Backlogs, error rates, customer complaints and costs can grow at an overwhelming rate. Stabilising the business to attract new and retain existing customers requires clear and coherent thinking, looking at the business from a customer perspective.

Rarely is there a silver bullet solution. The financial services industry has tried in many cases to address the sins of the past through large technology programmes – for example, new operating systems or CRM initiatives. In some cases these have been effective in achieving an improved customer experience with the resulting benefits of increased sales and profits. However, many have failed, often because the technologies were not rooted in a clearly articulated and relevant Target Operating Model, together with a manageable and realistic route towards achieving the desired model.

The Winchester White approach demystifies the process of building and moving towards a practical operating model. Our experience shows that the easiest way to achieve this is to have the customer at the heart of the programme. This makes the exercise relevant to all the participants in the end-to-end process and facilitates breaking down barriers between the various parties. From the customer perspective, the purchase and subsequent service associated with a financial product, be it long-term savings or a simple protection product, should be seamless. The customer experience should not jolt from sales into administration and further down the journey encounter a completely different service when it comes to a claim or change of circumstances. Achieving the optimum solution requires input from all parts in the organisation, including alignment of the processes and supporting technologies.

What does your business need, a Target Operating Model that you can sit back and admire, or an optimum operating model that helps you drive your business forward? Contact us to help make the correct choices.

Please contact Aileen Croft on 01256 363000 or acroft@winchesterwhite.co.uk for a discussion on how we might meet your particular needs.