Target Operating Model (TOM)
Describes the desired future state.
PURPOSE
Organizations seeking transformation need a clear picture of their desired target state to coherently align change measures. The Target Operating Model describes how the organization should function in the future and serves as a North Star for the transformation. It prevents individual measures from going in different directions and contradicting each other.
HOW TO USE
The leadership team defines the desired target state across multiple dimensions: processes, organization, technology, governance, and culture. The current state is compared with the TOM and gaps are identified. Based on the gap analysis, transformation measures are prioritized and translated into a roadmap.
WHAT IT IS
The Target Operating Model (TOM) is a strategic planning instrument that describes the desired future operating state of an organization. It typically encompasses dimensions such as strategy, processes, organizational structure, technology, governance, and culture. The framework is used by leading consultancies such as Bain & Company and serves as the foundation for comprehensive organizational transformations.
EXAMPLE
Example: Your insurance company wants to be fully digitized in three years, but there is no shared picture of what the organization should look like then. The Target Operating Model describes the target state across all dimensions — processes, technology, governance, people. The entire organization now has a clear target picture against which all transformation measures are aligned.