What is Operations Design?
Operations design is about structuring a company’s systems and resources for efficient goods or services production. It focuses on finding optimal methods to meet customer demand effectively.
Business models, crafted through business design, condense key business aspects into a concise, easily understandable format. They facilitate external analysis, providing answers to “what” and “why” at a conceptual level.
Business models embody abstract concepts, open to diverse interpretations. Similar models prompt competition through operational design and quality. Internal analysis reveals strengths, weaknesses, aligning operations with desired models. This provides a deep insight into a company’s capabilities, operations, and business strategy execution.
A broad perspective isn’t sufficient. To be practical, we must pinpoint tangible entities for deployment and management in our operations.
Individuals, their skills, reporting structures, business divisions, functions, and tangible assets such as offices, plants, and warehouses.
Collaborative methods, tools, and teamwork strategies are employed to accomplish predetermined business goals.
Product technologies, manufacturing technologies, and information and communication technologies, encompassing computers, communication devices, and software, aid the organization and its processes.
Operating models, comprised of various elements, underpin every business model. Incremental improvements focus on refining these components.
Operations Design Phase I - Business Outcomes
In the initial stage of operations design, specific business goals are pinpointed based on the internal analysis of the existing operating model’s strengths and weaknesses. These goals are quantified, measured, and set as Key Performance Indicator (KPI) targets for a future date. For instance: Expand private sector contacts to 2500 by December 2018.
Operations Design Phase II - Business Capabilities
In the second phase of operations design, it’s crucial to pinpoint the features or capabilities within the operating model that require enhancement to attain the desired business results.
A business capability, essentially a planning element, integrates the necessary components of the operating model for a targeted improvement area. It serves as a scope for development programs or projects. A strategic approach involves examining the company’s interactions with its external environment or value system to identify these capabilities.
Considering constraints in resources and focus, management usually selects a few business capabilities at a time, putting other operational enhancements on hold.
As-is vs. To-be Operating Models
Operating models and business capabilities are categorized based on their status and timeframe. The first set represents the current state or existing business operations, depicting day-to-day functioning overseen by operational management. A clear representation of this state, along with operative Key Performance Indicators (KPIs) and process mining, is vital. This current state serves as the foundation for financial planning, including running costs, as it involves real-world elements like personnel, facilities, and technology.
The second set outlines future or prospective operating models, forming the basis for investment planning in operational enhancements. For instance, through internal analysis, management might identify areas such as online service marketing, customer relationship management, and resource management for focus. These become specific business capabilities for operational development until desired outcomes are achieved.
In Figure 4, service marketing and communications are broken down into elements requiring change or improvement, setting the scope for a development program. Similar breakdowns apply to the other two capabilities. These programs form the company’s operational development portfolio. Operations design now concentrates on optimizing each capability, managing their synergies and interdependencies using relevant enterprise architecture methods and tools.
The pending tasks involve organizing and implementing capability development programs, which include:
- Organizing, staffing, and resource allocation
- Setting objectives for individuals
- Monitoring execution
- Implementing corrective actions
These areas fall within the domain of program and performance management.