Target Operating Model (TOM) Design

A target operating model (TOM) describes how a company must work in order to achieve its strategic goals. In commerce organisations, this means specifically: aligning processes, organisation, technology and management logic so that data-driven decisions, cross-channel consistency and operational scalability function not as the exception, but as the norm. Developing this target picture is one of the most demanding strategic tasks, because it requires analytical depth, operational knowledge and the ability to translate complexity into manageable structures.

Context and relevance

Many companies have a digital strategy, but no operating model to match it. The consequences are familiar symptoms: initiatives that work in the pilot, but do not scale. Data silos that persist despite considerable technology investments. Responsibilities that are unclear as soon as processes extend beyond departmental boundaries. This gap between strategic ambition and operational reality does not arise from a lack of commitment, but from the absence of a well-considered target picture.

The relevance of a clear target operating model grows with the degree of digital penetration. The more commerce processes are to run automated, data-driven and AI-supported, the more important it becomes that roles, systems and management logic are explicitly aligned to this target picture. Without this alignment, AI integration remains at the level of individual solutions instead of developing a systemic effect.

Our approach

The Target Operating Model (TOM) Design captures four dimensions that together describe the complete target picture of a commerce- and AI-native operating model (Figure 1: The four dimensions of the TOM blueprint). Each dimension is considered not in isolation, but in its interactions with the others, because a management model that does not fit the organisational structure remains theory.

Figure 1: The four dimensions of the TOM blueprint

The target operating model is developed in three steps.

Step 1: Analysis of the starting position

Based on available documents, interviews and – where available – the results of an upstream Digital Maturity & Disruption Assessment, the operational as-is situation is captured for each dimension. The aim is not exhaustive documentation, but a precise picture of the key bottlenecks, structural inconsistencies and untapped potential.

Step 2: Development of the TOM blueprint

Together with the leadership team, the target picture is developed along the four dimensions. The result is a TOM blueprint that describes the target architecture of the operating model: process design, organisational structure, system architecture and management logic. In addition, a governance framework is developed that clearly assigns decision-making authority, escalation paths and operational responsibilities within the target picture. The KPI dashboard design defines the metric structure with which the new operating model is managed.

Step 3: Validation and handover

The TOM blueprint is aligned with relevant stakeholders in a structured validation process – to ensure that the target picture is not only strategically convincing, but also operationally accepted. The agreed model forms the direct basis for the Digital Transformation Strategy, in which the prioritisation, sequencing and business-case assessment of the implementation are developed.

Results and impact

Clients receive a fully developed TOM blueprint with process architecture, governance framework and KPI dashboard design, in which all four dimensions are consistently aligned with one another. The result is not an abstract concept, but a working document: concrete enough to serve as a basis for implementation decisions, and structured enough to be communicated internally and represented to investors.

The essential value lies in the commitment embodied in the target picture: clients leave the process with a jointly developed, documented understanding of how the company should operate, and why this model fits the strategic direction. This provides orientation, accelerates follow-up decisions and reduces the risk of transformation measures pulling in different directions.

Position within the service portfolio

The Digital & Operational Performance portfolio comprises services of varying scope and focus. FOSTEC & Company offers comprehensive services to enhance digital and operational performance:

• Digital & Commerce Operating Model Design
• Strategic Cost Reduction Program
• AI-Powered Process & Workflow Automation
• Commerce Operations & Supply Chain Performance
• Data-Driven Performance Steering
• Technology Efficiency & Platform Optimisation
• Intelligent Data & Analytics Foundation

Find out in a personal introductory conversation how FOSTEC & Company develops a commerce- and AI-native target operating model for your company – get in touch with us.