The Digital Essentials

Digital Operating Model 

An operating model serves as the bridge between strategy and execution, articulating the organization of resources and the use of those resources in fulfilling critical activities. If strategy is a business’ head, then the operating model is its beating heart.

A digital operating model (DOM) builds upon this notion to describe the resources, processes, and technologies used in performing digital operations and in delivering digitally enabled experiences. More than any other management tool, a DOM answers the “how” of digital transformation and enables the velocity, coordination, and customer focus CX leaders require.

Bridging Strategy and Execution

Since the start of the digital revolution, businesses have been evolving their operations to meet changing demands. Digitalization, rising consumer expectations, regulatory swings, and environmental pressures are but a few of the forces driving operating model change today. To keep up with these changes — and encroaching digital natives — incumbents must adopt core digital models built to deliver agility and customer focus.

For many organizations, developing a digital-first mindset and installing a robust DOM at the heart of the business is a critical step on the path to digital mastery.

The DOM should consider the company’s digital strategy, its market situation, and available assets and resources. A comprehensive DOM comprises six core components: structure, governance, processes, people, systems, and performance. Each component must be thoughtfully designed to respond with agility to customer priorities, supplier realities, and business needs. When fundamental factors and needs change, the model should too.

Choosing the Ideal DOM

There are five generally recognized types of DOMs: Innovation Lab, Digital Factory, Decentralized, Shared Services, and Fully Integrated. Collectively, they represent a continuum of digital evolution and involvement.

Operations leaders must evaluate the five DOM types and choose the one that best fits the unique vision and needs of the business. By carefully calibrating expectations of digital against the capabilities embodied by the ideal DOM, an organization can achieve its goals with maximum impact and speed.

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