Operating model is an abstract representation of how an organization operates across a range of domains in order to accomplish its function. There are different ways of classifying these domains. People, process and technology is one commonly used distinction. Process, organisation and technology is another. Andrew Campbell of Ashridge Business School refers to five domains: Process; Information systems; Locations and buildings; Organization and people; and Suppliers and business partners.
Ross, Weill and Robertson summarized found that an organization with an operating model reported 31% higher operational efficiency, 33% higher customer satisfaction, and a 34% advantage in new product development. In the book "Enterprise Architecture as Strategy," they outline four operating models:
- Coordination – low process standardization but high process integration (Compare with allied strategy – where subsidiaries provide varied products to the same customers)
- Unification – both high standardization and integration (compare with integrated strategy)
- Diversification – businesses requiring low standardization and low integration (compare with holding company strategy)
- Replication – high standardization but low integration (Compare with Franchisees or Replicated Facilities of an Integrated Strategy)