Who is TOM?
TOM is the targeted operating model of a business. This allows a business to identify what people, technology and processes need to exist for the business to be as effective, efficient and productive while creating the best value the business can.
What we need to know
Firstly we need to think about how the business can deliver the most effective, efficient production line to meet our customer’s needs while delivering the quality of service or product that they want into the market.
The first question the business needs to make very clear as part of the objective of the business in line with its vision is:
What does the customer want?
From this we then get the following question
How do we supply the customer with what they need?
You have a product/service that meets that need or want to create one but you need to have a way of making sure your business is set up correctly to manage the end to end capability of supplying the product or service to your customers and the market.
This is where the TOM comes in, we need to look at the three elements that make up a TOM and work out how they can best be utilised to deliver what the customer is looking for.
Identifying the core processes required to deliver value to the customer requires looking at how the different elements of a business need to work to meet the objective. A common way of doing this is to use the Value Chain Method devised by Michael Porter.
By using this method you can quickly identify that we have ensured the design of the TOM for the entire organisation including the primary/core and supportive functions. These could include sales, IT, HR, Finance etc. all which are key to delivery of the objective from the vision and strategy.
Once each processes has been identified it is really important to look at how the business will need to deliver the processes making sure that they add the value that is required and try to be as efficient as possible.
Identifying the roles needed and the number of people in each role, what skills, capabilities and knowledge required doing a role.
Analysis of what people and roles will be carried out in a business that is already operating to understand what skills currently exist and how they can be used and training can be provided to skill up people in to new roles. Also we should think about what other changes to people may need occur including possible need to hire new skilled workers.
When looking at ways of supporting the process that need to be carried out this is where technology come in both the manual systems and automated/support technologies can that be used to complete or aid the process? How will they be used, will they be owned/rented or developed to fit the needs that have been identified. How will systems be administered and maintained.
As technology is developing quickly this could even start to have an effect on people. Are the systems that can automate the role and responsibility of people in the business. What would the impact of this type of change create? Keeping these questions constant helps to make sure that the business is a forefront of technology when developing its TOM.
The next two parts need to be considered together as a type of technology may have an impact on people vise versa.
If it feels like there are still gaps in the TOM then you can break these down further using the McKinsey 7s analysis
The TOM is a very important part of getting thing right. If the business is set up incorrectly you could be loosing money, customers, employees and opportunities. This is not easy but the reward for doing this analysis and implementing change based upon it is well worth the effort. I also think that good research about customers, competitors and market help to make sure that your TOM is current and not built solely off internal knowledge.
A OK business knows its self
A good business knows its self and its competitors
A great business knows it customers its competitors and its self better than anyone else.