There is a lot of literature about defining and establishing an enterprise architecture for an organization, and plenty of models to choose from. Unfortunately, many of these resources approach the subject as if the organization is brand new – just starting to define itself – and you have the opportunity to define your model up front. That’s not a realistic situation for most organizations; rather, most need to move their architecture from one model to another over time. So, what do you do if you have an existing organization, and inherently an existing business model of some sort, and you want to further refine or transition your model for future strategic growth?

There are two important elements when considering an operating model change. Selecting the right operating model for the future is certainly a critical decision, and should be tied directly to the business strategic objectives. (Need I state you need to understand why you think a change in operating model is even necessary?) In addition, it is imperative to understand your current operating model (such as it is), so you can 1) better understand why your current model is not meeting your expectations and/or needs, 2) determine the gap between the present environment and the future environment, and 3) identify opportunities and define priorities for moving the organization in a new direction.

While these steps are rather straight forward, it can be a bit intimidating trying to figure out where to start in defining your current environment. Using the steps and questions outlined below, you should be able to get off to a good start in understanding your organization’s current model.

Level of business process integration and standardization
The first step in determining your current operating model is to understand the high-level business processes, or value chains, in your organization, and the degree to which these processes are standardized and integrated across your organization. Understanding the level of integration and standardization (across multiple business units, if that applies) gives you a perspective of how decisions are currently made, and where the control points are for decisions related to strategy, business process execution and technology investments.

For example, if your business units operate fairly autonomously (in decision making, and business process definition and implementation), then you have a business with little business process standardization. (Note: this does not mean that your employees are executing a specific process inconsistently!) If, on the other hand, your business units centrally define and control business processes, or business units with common functions operate similarly, then your organization is operating with a high level of business process standardization.

If your organizations’ business processes do not generally impact one another, and few customers or suppliers are shared, your organization has a low level of business process integration. Enterprises with many shared customers, products and/or suppliers are likely operating with a high level of business process integration.

Use the following questions to stimulate your thinking about how your organization operates:
To what degree:

• Do your major business units share customers, products, and/or suppliers?
• Do transactions in one business unit impact other business unit transactions?
• Does business management have autonomy in the business unit for process design?
• Are business units operationally different?

Level of technology integration and standardization
After understanding how your business units interact and make decisions, consider your current technology infrastructure (technical architecture as well as business-facing software applications). How your technical environment operates will tell you a lot about the business model you currently have. Evaluate your governance procedures and technology investment decision making, the types (and numbers) of software applications implemented in production (enterprise versus stand-alone or business unit specific applications), and the level of data sharing across the enterprise.

As an example, if you find you have few enterprise applications with mostly individual applications supporting a variety of functional areas and business units, your operating model probably has a low level of business process standardization. If you have standardized and shared data, common business applications across the entire enterprise, and central IT investment decision making, then your organization has a high level of business process integration supported by technology.

As you evaluate your technical architecture, consider the following:
To what degree:

• Is customer, supplier and/or product data shared across the enterprise?
• Is data standardized across the enterprise?
• Are “enterprise applications” used across the enterprise?
• Are IT investment decisions made at the business unit level?

Remember, by definition, your operating model is defined by the level of business process standardization and integration (for more information, see . Using the information collected through the above steps, you should be able to map your current environment to a business model. While you might not be executing the operating model in its pure form, you will likely be closer to one model than any of the others. Consider also that, if you have a large corporation, you could have multiple operating models within the entire enterprise – one at the top corporate level, and another at a business unit level.

Once you understand your current operations and have made a decision about what model makes the most sense for the future, you will be in a position to develop a gap analysis and set strategies and priorities for moving the organization forward in a logical manner.

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