Design target operating model

Define the outline target operating model that describes how the target environment will be run when the source infrastructure and applications have been migrated.

Target operating model

Target operating model is a description of the desired state of the operating model of an IT room. When working on the operating model, it is normal to define the “as is” model and the “to be” model. The target operation model is the “to be” model.

The MIT Center for Information Systems Research (CISR), a research group at the MIT Sloan School of Management, suggests that an operating model is useful to guide IT investment decisions. IT investment must support the operating model.

Ross, Weill and Robertson summarized found that an organization with an operating model reported 31% higher operational efficiency, 33% higher customer satisfaction, and a 34% advantage in new product development. In the book Enterprise Architecture As Strategy, they outline four operating models:

Process standardization and integration

  • Coordination – low process standardization but high process integration (compare with allied strategy, where subsidiaries provide varied products to the same customers).
  • Unification – both high standardization and integration (compare with integrated strategy).
  • Diversification – businesses requiring low standardization and low integration (compare with holding company strategy).
  • Replication – high standardization but low integration (compare with franchisees or replicated facilities of an integrated strategy).

Operating models inform the appropriate level of business process integration and standardization to deliver the organizations promises to stakeholders.

The operating model informs IT leaders about how various technical and business components should be designed and implemented to enable the chosen operating model.

There are many different frameworks identifying the components of a target operation model. Hence each IT room migration project to define a target operation model will focus on slightly different aspects depending on the challenges facing in the IT room. Some target operation models are created to help with the link between IT and strategy, others to help with the link between IT room design and strategy, and so on. A target operation model converts strategy ideas into operational plans.

Target operating models provide the vision for IT rooms undergoing change. The reason for any new target operation model is likely to be a new location or new technology model or a significant failure in the performance of the existing operations for one or more stakeholders. Hence target operation model work should be closely linked to strategy work. Form follows function; in other words, target operation model follows strategy. Typically, a target operation model project also includes the roadmap over time that specifies what the company needs to do to move from the “as is” to the “to be”.

A good place to start is with a value-chain map. First identify the product/market segments that IT is serving. Clarify the offer being given to each segment. Then define, for each segment separately, the value chain of activities that is needed to deliver the offer. Different value chains can then be compared side by side in order to identify steps in the chain that can be “aggregated” to gain economies of scale or “standardised” to gain consistency or “separated” to gain local adaptation. These choices then lead directly to IT room implications.

 Tasks

  1. Obtain and confirm target service delivery requirements including Disaster Recovery.
  2. Analyse existing Business as Usual (BAU) Operating Model
  3. Define target operation model.
  4. Identify and resolve operability issues.
  5. Validate Disaster Recovery requirements.
  6. Build Disaster Recovery scenarios for in-flight and post migration invocation.
  7. Update IT room data repository.

Hints and tips

  • The target operation model may already exist but in cases where it does not, or has yet to be defined, then this work must be undertaken if in the IT room migration project scope.
  • There are a set of common target operation models with some analysis on the various characteristics offered. Search online for this material and adapt for the specific circumstances faced.

Activity output

  • Target operation model definition document

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