Target Operating Model

• A Target Operating Model (TOM) defines the desired future state of an organization and illustrates how structure, processes, roles, and systems must interact to execute the strategy effectively.

• It is built on clear structures, defined processes, explicit responsibilities, and integrated IT systems.

• Together, these elements form a coherent framework that enhances efficiency, transparency, and controllability.

• A TOM is particularly relevant during transformations, reorganizations, mergers, or strategic realignments.

• Successful implementation requires active change management and strong employee involvement.

A Target Operating Model (TOM) defines how a company structures its people, processes, and technology to deliver on its corporate strategy. In an environment of constant change — with evolving markets, new technologies, and rising expectations for agility — a TOM provides the framework that connects strategy, structure, and execution.

A modern Target Operating Model translates a company’s business model into clear business capabilities, organizational structures, and management systems. It defines how the organization achieves its goals: efficiently, adaptively, and based on data. By aligning process and technology with strategy, the TOM becomes the foundation for business transformation, resilience, and sustainable growth.

A Target Operating Model is the target state of an organization — a high-level blueprint that describes how business capabilities, processes, and technology must interact to achieve strategic objectives. It sets out the desired structure, key roles, governance, and performance management systems needed to deliver the future state vision of the business.

Unlike a traditional org chart, which depicts the current setup, the TOM defines the future state operating model — how the organization should work to realize its strategy. It translates the corporate strategy into actionable design elements that shape how value is created and revenue streams are sustained.

A comprehensive Target Operating Model typically includes several components that together define how the organization operates:

• Organizational structures: departments, reporting lines, and governance hierarchy.
• Processes: end-to-end workflows, accountability, and decision-making frameworks.
• Roles and responsibilities: clearly defined ownership and authority.
• Technology systems: digital platforms and tools that enable efficiency and transparency.
• Performance and metrics: measurable KPIs and key performance indicators for control and improvement.

In short, the Target Operating Model is the operating model definition that translates strategy into operational reality — the bridge between the company’s ambitions and its ability to execute.

The key elements of an effective Target Operating Model are well-defined structures, efficient processes, clear roles and responsibilities, and integrated technology systems. Together, they form a cohesive framework that links people, operations, and technology into a responsive, data-driven system.

Below, each component plays a crucial role in achieving agility, alignment, and operational control.

1. Structures and Processes
   Structures and processes determine how work is organized and executed. A technology operating model ensures that organizational design and technology infrastructure work hand in hand — uncovering redundancies, increasing transparency, and reducing friction.
   A well-designed TOM identifies which structures support the business capabilities most critical to strategic success.
2. Roles and Responsibilities
   Roles and responsibilities define who makes decisions and who owns outcomes. A Target Operating Model clarifies accountability and collaboration across teams, preventing overlaps and creating stability in leadership and execution.
3. Technology Systems
   Technology systems provide the foundation for data-driven management and continuous improvement. They connect information, enable real-time analysis, and allow leaders to monitor key performance metrics. In modern organizations, the TOM integrates digital tools and management systems to support agile operating models and decentralized decision-making.

The strategic importance of the Target Operating Model lies in its ability to align corporate strategy with operational reality. It defines how strategy is translated into structures, processes, and capabilities — making it far more than a conceptual framework.

Whether in organic growth, consolidation, restructuring Businesses, or post-merger integration, a well-designed TOM ensures that every transformation is built on a stable yet adaptable foundation. It enables organizations to balance control and flexibility — a core requirement for agile organizational development and sustainable success.

In practice, the Target Operating Model provides clear governance, transparent data flows, and a holistic view of the organization. Companies that actively use their TOM gain the ability to respond faster, plan more accurately, and steer transformation initiatives with precision. As a result, the TOM becomes a key instrument for organizational effectiveness and a lever for competitive advantage.

A Target Operating Model becomes effective when it is not only designed but also actively embedded and continuously improved. Real impact comes when the TOM moves beyond theory and becomes a dynamic management system integrated into daily operations.

This operating model framework functions as a living system that maps the organization, measures performance, and highlights areas for action. Tools like Ingentis org.manager make this possible through visualization, KPI analysis, and scenario simulation.

Organizations can test how structural changes — such as new reporting lines, workforce adjustments, or process redesigns — affect performance in real time. This turns the TOM into a living steering instrument, creating transparency, supporting informed decisions, and empowering organizations to manage change with confidence.

Change Management is essential for implementing a Target Operating Model successfully because it builds acceptance and guides the organization through transformation. Every new operating model introduces change — and with it, uncertainty. Without a structured change process, even the best TOM design risks resistance.

Successful TOM initiatives are characterized by transparency, involvement, and clear communication. Employees must understand why changes are necessary, what benefits they bring, and how their roles will evolve.

Key success factors for TOM implementation include:

• Early stakeholder involvement and leadership commitment.
• Clear, transparent communication.
• Data-driven decision-making supported by visualizations and simulations.
• Training and empowerment for new roles, processes, and tools.
• Continuous feedback and improvement cycles.

Effective Change Management ensures that the Target Operating Model is not perceived as a top-down restructuring but as an opportunity for collective growth and organizational learning.

A Target Operating Model is more than an org chart or process map — it is the strategic link between vision and execution. It defines how a company achieves alignment between its corporate strategy, business capabilities, and management systems.

In a world of constant change, a dynamic operating model becomes a compass for decision-making and adaptability. It helps organizations stay resilient, data-driven, and future-ready — turning complexity into clarity and transformation into measurable success.