Operating model: conceptual and/or visual representation of how an organization cocreates value with its customers and other stakeholders, as well as how the organization runs itself:

• Business models illustrate how a business captures value
• Operating models illustrate how the organization will run

Represents a series of practices and choices:

• Interactions determine value proposition delivery and market position
• Value proposition is not directly in the operating model, but it is the driver for the operating model

Tool facilitating the design/configuration of organization’s operations, 2 themes:

• Key work that takes place
• Context in which the value streams perform

1. Operating model canvas

2. Operating models for digital organizations

Contents shared with operating models:

• Describes how value is created
• Defines value streams and their management
• Defines roles of people, processes, and technology in those value streams
• Defines the partners, their roles, and contracts
• Emphasizes importance of culture, defines how to promote the necessary of culture
• Identify consumers and their roles in the value streams, the products and services consumed and influencing factors
• Includes a portfolio of projects, services, and products, and investing information maintain it

Unique features include:

• Technologies specified are emerging technologies
• Emphasizes innovation and experimentation
• Processes will be more agile in nature (e.g. speed to market, minimum viable products, incremental development of products and services)

3. Structuring the organization

A digital business needs to be flexible and responsive in order to rapidly respond to market conditions and to adopt new emerging practices and technology to provide sustained competitive advantage:

• Traditional hierarchical organizational structures are changing (flat structures, time to market, Agile/Lean/DevOps)
• Shift to a product model moves customer management away from the product team (decentralization)
• Customers expect delight, not just satisfaction

To be successful, must have:

• A known strategic alignment and accountability across all teams, departments, divisions…
• Common understanding of value, outcomes, costs, risks (VOCR)
• Collaboration and partnerships
• Executive leadership open to learning

Go back to ITIL 4 Strategic Leader Certification Course: Implementing a Digital Strategy to finish this chapter or to the main page ITIL 4 Strategic Leader Certification Course.