Although the business units have distinct operations, high-level business process owners work to standardize business processes across the business units. Centralized management of these processes typically leverages a matrix approach to keep track of the business unit composition. Business units have similar operations where process and data are designed centrally so they can be shared. The Unification Operating Model is based on a globally integrated set of business processes where customers and suppliers are distributed geographically. Visually a Coordination Operating Model is represented in the following diagram. These autonomous business units have a high degree of control over business process design to adapt to its specific operations. The Coordination Operating Model is characterized by shared customer, product or supplier data but operationally unique business units that can impact each other’s transactions.
Operating Model Quadrant (Enterprise Architecture as Strategy, Ross et al, 2006) 4īased on survey and case study research at more than 200 companies in the United States and Europe, MIT’s CISR developed a quadrant based on the two dimensions of business process standardization and integration in which high performing enterprises that had implemented an operating model could be classified. 29% greater strategic agility than those companies that did not.Research conducted by MIT’s Center for Information Systems Research found that enterprises implementing an operating model reported the following: In this sense, the operating model is the initial manifestation of the business model when it is deployed as it indicates how value is created, delivered and captured by the business units in the enterprise.
It is the conceptual component in the organizing logic that defines an enterprise architecture.
The operating model is the business process standardization and integration necessary to deliver value to Customer Segments. In Part 3 of the Enterprise Architecture for Business Model Innovation Series, an enterprise operating model will be selected based on the business model design described in Part 2, Using Design Thinking to Design Business Models.Īn operating model is the first layer in the foundation for execution in an enterprise architecture.
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