Business Architecture Consulting

Target Operating Model Design

Strategy without an operating model is a plan that cannot be executed. ClarityArc designs Target Operating Models that define how your organization will be structured, governed, and resourced to deliver on its strategic objectives — with enough precision to drive real change and enough flexibility to survive implementation.

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When Organizations Need This
A major strategic shift — new markets, new business model, or post-merger integration — requires the operating model to be redesigned from the ground up
The current structure is creating friction — slow decisions, duplicated work, unclear accountability — that strategy alone cannot fix
Technology transformation is underway and leadership needs to know what the organization will look like once it lands
Cost reduction targets require structural change, not just headcount reduction
The current operating model was designed for a different scale, market, or ownership structure and has not been formally updated since
Operating Model Design Governance Structure Capability Alignment Span of Control Decision Rights Service Delivery Model Org Design Operating Model Design Governance Structure Capability Alignment Span of Control Decision Rights Service Delivery Model Org Design
What a Target Operating Model Does

A Target Operating Model defines the future state of how your organization works — not just what it looks like on paper.

A TOM answers six questions that strategy decks cannot: Who does what? Who decides what? How are services delivered? How are capabilities resourced? How is performance measured? And how does the organization change as conditions evolve?

Without a TOM, transformation programs stall because no one can agree on what success looks like in organizational terms. The TOM makes that concrete — and buildable.

67%
of enterprise transformation programs that fail do so not because the strategy was wrong, but because the operating model was never redesigned to deliver it. (McKinsey & Company)
What the TOM defines
Organizational structure — how business units, functions, and shared services are configured
Decision rights and governance — who has authority to decide what, and at what level
Service delivery model — what is centralized, decentralized, shared, or outsourced
Capability requirements — what the organization needs to be able to do in its future state
Performance model — how outputs are measured, managed, and improved at each level
Transition path — the sequenced steps from current state to target state
How We Design It

Three phases. One operating model built to land.

TOM design fails when it is done in isolation or delivered as a slide deck. ClarityArc runs a structured three-phase process that connects current-state diagnosis to future-state design to implementation sequencing — producing an operating model that leaders can actually act on.

Phase 01 — Diagnose

Current State Assessment

Before designing the future, you need an honest view of the present. We assess your current operating model across structure, governance, capabilities, and performance — identifying the friction points, gaps, and misalignments that are holding the organization back.

Org structure and reporting line analysis
Decision rights mapping and governance review
Capability gap identification against strategic requirements
Service delivery model review — what is centralized vs. decentralized
Output: Current-state operating model assessment
Phase 02 — Design

Target State Definition

The TOM design phase defines the future operating model across all six dimensions — structure, governance, service delivery, capabilities, performance, and people. We develop design options with trade-offs, validate with leadership, and produce a TOM that is specific enough to act on.

Multiple structural design options developed and evaluated
Governance model and decision rights framework designed
Shared services and centralization decisions made explicit
Capability and workforce implications assessed
Output: Target Operating Model with design rationale
Phase 03 — Sequence

Transition Roadmap

The TOM is only as valuable as the plan to reach it. The transition roadmap defines the sequenced path from current state to target state — with milestones, dependencies, risk points, and the governance required to manage the transition without disrupting operations.

Transition sequencing across people, process, and technology
Dependency mapping between workstreams
Risk and disruption assessment for each transition phase
Governance and accountability model for the transition period
Output: Transition roadmap with milestone governance
What You Receive

Deliverables that give leadership something to decide and act on.

A TOM engagement produces four core deliverables. Each one is designed as a working tool for leadership decision-making and implementation governance — not a presentation to be filed away.

Deliverable 01

Current-State Assessment Report

A structured diagnostic of your current operating model — covering structure, governance, capabilities, and service delivery — with a clear view of what is working, what is creating friction, and what needs to change to support the target strategy.

Deliverable 02

Target Operating Model Design

The full TOM documentation: org structure, decision rights framework, service delivery model, capability requirements, and performance model — with the design rationale and trade-offs documented so future decisions can be made consistently.

Deliverable 03

Design Options Analysis

Two to three structural design options evaluated against your strategic priorities, cost targets, and organizational constraints — with a recommendation and the explicit trade-offs of each option documented for leadership review.

Deliverable 04

Transition Roadmap

A sequenced plan for moving from current state to target state — with milestones, workstream dependencies, risk assessment, and the governance model required to manage the transition. Built for implementation, not just approval.

The Difference It Makes

Before and after a designed Target Operating Model.

Organizations that operate without a defined TOM spend more on transformation and get less. The TOM is what turns strategic intent into organizational reality.

Without a Target Operating Model
Transformation programs launch without a clear picture of the organizational end state
Structural decisions made reactively — driven by headcount pressure rather than design principles
Governance gaps create decision bottlenecks that slow every initiative
Shared services and centralization decisions made inconsistently across business units
Each reorganization resets the organization without building toward a defined future state
With a ClarityArc Target Operating Model
Every structural decision tested against the TOM — with a clear rationale for what fits and what does not
Governance model defines decision rights at every level, eliminating ambiguity that causes delays
Service delivery model makes centralization and outsourcing decisions explicit and defensible
Capability requirements identified before hiring and technology investments are made
Leadership aligned on what the organization is building toward — and how to get there
What Separates Good from Great

Most TOMs are designed in workshops and forgotten before implementation starts. Ours are built to drive decisions.

Dimension Typical Approach ClarityArc Approach
Scope TOM covers org structure only — governance, service delivery, and capabilities left undefined All six dimensions covered: structure, governance, service delivery, capabilities, performance, and people
Design Options One design presented as the answer — trade-offs not surfaced or documented Multiple design options evaluated against strategic priorities, cost targets, and constraints — with explicit trade-offs
Grounding TOM designed from strategy documents without operational validation Current-state assessment conducted first — TOM designed against real organizational data, not assumptions
Transition Planning TOM delivered without a credible path from current state to target state Transition roadmap built into the engagement — sequenced, with dependencies and governance defined
Durability TOM is a one-time deliverable — not designed to evolve as strategy and conditions change TOM documented with design principles so future structural decisions can be made consistently
Common Questions

What organizations ask before starting a TOM engagement.

How long does a TOM engagement take?
Most engagements run twelve to sixteen weeks from kickoff to a final TOM with transition roadmap. Scoped engagements focused on a single function or business unit can move faster — often eight to ten weeks. The timeline is driven primarily by the complexity of the current-state assessment and the number of stakeholders involved in design validation. We structure the process to minimize disruption: the majority of synthesis work happens on our side, with focused working sessions at each milestone.
We are in the middle of a reorganization. Is it too late to design a TOM?
No — and it is often better to start during a reorganization than to wait until it is complete. A TOM engagement during active restructuring gives leadership a design framework for the decisions being made in real time, rather than making those decisions ad hoc and then trying to rationalize them afterward. We have structured TOM engagements specifically to run alongside active organizational change programs.
How does the TOM connect to our business capability model?
The capability model and the TOM are complementary and work best together. The capability model defines what the organization needs to do — the TOM defines how it will be organized and governed to do it. If you already have a business capability model, we use it as a direct input to TOM design. If you do not, a scoped capability assessment is often the right starting point before TOM design begins.
Can you design a TOM for a single function rather than the whole organization?
Yes. Function-level TOM design — for finance, technology, operations, or a specific business unit — is a common starting point, particularly when a specific function is being restructured ahead of a broader organizational change. A function-level TOM is built with the enterprise-level model in mind so that it integrates cleanly when the scope expands.

Business Architecture Consulting

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Solutions Capability Mapping & Modeling Target Operating Model Technology Roadmap Process Architecture Application Rationalization M&A Integration Architecture Shared Services Design
Guides & Education BA vs. Enterprise Architecture What Is a Capability Model? How to Design a TOM BA for AI Readiness Why Transformation Programs Fail Capability Maturity Assessment Value Stream Mapping Technology Portfolio Rationalization
Industry Applications Energy & Oil and Gas Banking & Financial Services Mining & Industrial Legacy System Modernization Post-Merger Integration
More Resources What Does a Business Architect Do? BA & Strategy Alignment BA for Mid-Market The BA Assessment TOGAF vs. Business Architecture Related Services AI Strategy & Enablement Process Optimization Application Portfolio Management Data Strategy for AI

Ready to Define the Operating Model Your Strategy Requires?

ClarityArc designs Target Operating Models for mid-market and enterprise organizations across energy, banking, and industrial sectors in Canada and the US.

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