Business Operating Model (BOM)
Business Operating Model (BOM)
The main goal of any firm is to satisfy its customers and clients. This satisfaction is achieved through performing complex various operations in terms of technology, individuals, geographic location, organizational structure and many other things.
How is it possible for the employees to understand and deal with all of these complications?
Business Operating Model (BOM)
Scientists in the field of management developed a model to be taken as a reference for the implementation of the strategic plan of the company so that the company satisfies its customers and clients. This model experienced different stages of development and now it is known as (BOM).
What is (BOM)?
BOM was defined by some as the tool used for determining the style followed by the enterprise in creating or achieving a goal. Others have given it a simple definition being a model whereby the nature of producing something or proving a service is determined. This includes delivering this product or service to the clients.
Some describe (BOM) as the map of a firm and others call it the (Business architecture). They liken it to the map of a building in the sense that they both illustrate in details the form as well as the characteristics of the building or the firm. Both also have sub maps illustration other specific things like those of electricity. Thus, there is a general map that determines the relationships among these operations known as (BOM) that includes other specific sub maps for each element.
The elements of (BOM)
BOM includes five elements known as (PILOS) taken from their initials
- Processes and activities – the elements to be performed like financial, human resources, corporate governance operations.
- Information and information systems to support work.
- Locations, buildings and other assets used to support work.
- Organization and people who perform the work and they are organized.
- Resources and partners from outside the first.
Imagine a retail store adopted a famous European trade mark, for sports outfits for example, which produce high quality products with reasonable prices available in various countries. The following operations illustrate how it works:
- The central administration is in Europe.
- Manufacturing in Asian countries.
- The targeted markets are Africa and the Middle East.
- The sale is online.
- Prices are competitive with those of other companies.
According to the above mentioned, the general frame of (BOM) will illustrate the following items that facilitate the final delivery with the quality and the value expected by the client.
- The company’s ability to develop and cope with market change.
- Tasks and operations like manufacturing, distribution among other things
- Geography represented in work and sell in more than one place
- Roles and process design
- Organizational structure showing the practical and geographic Integration of roles
- Technology including electronic transactions with customers.
Is (BOM) beneficial to the firm?
The presence of clear (BOM) helps to:
- Explain the mechanism by which the firm is operating.
- Clarify operational and technical tasks.
- Determine operational disorders and work clashes.
- Detecting responsibility for vulnerabilities and risks.
- Highlight data fragmentation, system and tasks.
How can (BOM) prevent operations’ breakdown?
- A stable solid (BOM) leads to organizational decision making.
- It helps to achieve the vision and the message and determines the areas of questioning as well as the effectiveness in dealing with the weaknesses.
- The presence of a strong leadership to carry out the strategies can prevent such breakdowns.
- (BOM) prevents personal hesitation that may lead to centralization on the strategies.
- It organizes the roles of the individuals and their responsibilities and enhances consultations and dependence in the right time and place.
- It improves productivity, time management, determines which tasks need to be prepared and answers what and how questions.
- It represents an organizational road map to ensure the preparedness and make sure to find the right people in the right time on the long run.
Is (BOM) considered ideal in my company?
It should be said that (BOM) should be present in every firm. However, not all models are the same and effective in supporting the goals of the firms.
Thus, how to know that there is a problem with the (BOM) of your firm?
Positive answers to the following questions indicate the strength and the effectiveness of your model:
- Are the capacities of the organizational structures well-defined in a way to fulfill the strategies of your company?
- Are you performing many transactions through trademarks and in different places more effectively than the past?
- Are you performing your central operations cheaper and more effective with fewer distractions than those in other places by your firm?
Are your ways and practices allow presenting appropriate people in appropriate times to solve challenges or respond to threats with the least amount of bureaucracy?
- Are your strategies, budget, planning well-connected with the financial resources bearing in mind the available opportunities?
- Does yours firm professionally take and implement decisive decisions faster than the competitors?
- Is there a clarity in taking the most important twenty strategic and operational decisions at the firm and who takes these decisions and on what basis?
- Does your firm have a well-coordinated and an effective style of work reflecting its culture and achieving its aims positively?
At the end, it can be said that the right (BOM) differs according to the nature, culture and the trade mark of the firm. An ideal (BOM) takes into consideration the culture, identity, and the philosophy of the firm and enables it to operate well.
BOM needs a high level of expertise and in most cases can be outsourced to a specialized company like Bakkah Inc. We will write a whole article explaining some models of (BOM) and their designs.
Bakkah team for training and consulting