The TOM - Target Operating Model
The Target Operating Model is at the heart of every Finance Transformation program. It conjures up different images for different people based largely on their experience. To some it's just the new Finance Organisation Charts, to others it includes everything from Culture to Customer to Channels. However, it includes all of those and more!
The Target Operating Model or TOM for short, is the 'Blueprint for Finance'. In simple terms it is the blueprint for your home and that home is Finance!
At Finance Transformation UK we have our proven methods for successfully launching a Finance Transformation program and the design of TOM is integral to that. Our Team has worked on over 30 Finance Transformation programs across multiple industries and geographies which gives us proven experience in what works best.
We abide by a simple but effective 5 Step process, based on our experience and we do not allow Clients to deviate from it. These 5 Cardinal Rules can be applied to creating any TOM:
1. Exam Question - The why?
Every Project in the World must start with a Statement and Stakeholder agreement to the 'Exam Question.' On Day 1 it is critical to reach Stakeholder consensus on the Why! Knowing Why we are doing this will sustain us through months of challenging Change and critically it sets the Tone, informs the Vision, and anchors the Objective of the program.
2. Vision - The What?
All great Leaders set a Vision to inspire their people to change, prosper and succeed! There must be a crystal-clear Vision of what we are trying to achieve. We work with graphic designers to bring your Vision to life with images. A Vision represented by an appropriate Image and inspiring Tagline will inspire staff at all stages through the program. Make it clear, easy to understand and easy to remember - Just Do It!
3. Baseline - Start Line
We must accurately document our starting point across areas that are part of Finance Target Operating Model design - Process, People, Technology, Customer, Business Operating Model, Governance, Customer, Channels and more and more until you have them all!
4. Current Operating Model - The Present
We keep a tight rein on Clients, who may tend to see only the Vision and their preferred way forward. Based on our proven experience everybody must understand the strengths and weaknesses of the Current Operating Model, the COM. Designing a TOM in isolation is not advisable or realistic.
Only the most advanced Organisations such as NASA, Tesla or Google could design a TOM in a vacuum. For all Businesses we recommend that time spent studying your present COM is critical in successfully designing your future Target Operating Model.
5. Target Operating Model - The Future
Based on the above Steps we propose a short list of TOM Options to the Finance Transformation Board for consideration. These TOM Options will have a high-level Cost Benefit analysis as Cost will be a primary driver in the TOM Option selected.
We back our experience, so the final Step includes our TOM Recommendation and Roadmap to implementation. The 5 Steps typically average 12 weeks to deliver.
Author: Michael Ryan
With 25 years' experience Transforming Finance across multiple Sectors as a Consultant and as a Finance Transformation Leader, Michael Ryan is uniquely placed to advise Clients on creating a World Class Finance Team. Call him now on 0203 1466878