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Our Understanding of Next Generation's Target Operating Models




The current situation in the world economics requires a rethinking of business strategies. The worldwide crisis in the financial segment increases the pressure on every company. All companies have to lean their operational processes and their high risk activities to ensure customer satisfaction. They really have to find new ways of operating the business. Current operating models have to be enhanced and should be more innovative. The future challenges to successfully manage a company necessitate a restructuring and rethinking. In our point of view, companies have to concentrate on their key qualities and services and need to slim down their organizational and operating structure. The paper starts with describing common rationales of functional models which are essential for setting up the individual target operating model. After that, the target operating model will be enhanced with innovative aspects from the organization’s corporate governance, human resources, and lean management point of view. This consolidated mix will build a framework, which fulfills upcoming challenges. At the end of the day, our approach illustrates of how the usage of a conventional target operating model could be stepwise transformed to the next generation in order to finally establish a self-optimizing organization system. It concludes that the prospects seem to be quite promising even though there are no significant experiences in practice yet.

Suggested Citation

  • Andersen, Andreas & Faulbecker, Nicolas, 2012. "Our Understanding of Next Generation's Target Operating Models," Journal of Financial Transformation, Capco Institute, vol. 34, pages 149-153.
  • Handle: RePEc:ris:jofitr:1504

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    More about this item


    Target Operating Model; Risk; Corporate Governance; Lean Management;

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure


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