How do you get started with an Operating Model Transformation? In my last blog I talked about Target Operating Model versus Service Design or Service Redesign, and why how you go about designing operational change is more important than the actual size and scale. I touched on my five-stage change approach and in this series I’m explaining it step by step. 

Operating Model Transformation

Whether you’re fixing a problem or exploring a new idea all change is best when it’s designed. Your Operating Model Transformation or Service Design doesn’t have to be complicated and if you follow this five step approach you will make informed decisions and the right changes for your business. The first place to start your transformation or design is the Discovery phase. 

The 5 stages of an Operating Model Transformation or Service Design approach. Discovery is highlighted as the fist step, followed by Insights/Analysis, Scenario modelling/options, Business Case and Delivery.

What is the Discovery phase?

You should use Discovery to provide an evidence-base for your initial problem or opportunity, and to gain a deeper understanding of a user’s experience. This will typically involve collecting, understanding, and analysing, some or all of the following information: 

Four types of information to gather during the Discovery phase of an Operating Model Transformation or Service Design: Data and statistics, staff feedback, process and system mapping and customer experiencesWhen conducting Discovery, you need to examine and understand your organisation by looking closely at the four key areas of capacity and demand, staffing/resources, finance, and outsourcing.  

Infographic showing the information gathering completed during the Discovery phase of an Operating Model Transformation or Service Design.

Capacity and demand

You need to gather information on customer capacity and demand for your services or products to understand both the current and historic position. This is important to be able to look back and get a good view of the demand trend.  

While it’s not likely you can ever truly and accurately predict future demand, you can still understand the impact different levels of demand have had historically, with the potential to understand those times where you’ve tried something different or made changes and tweaks to your service or operating model.  

You also need to understand what your capacity has been, and currently is. For a product, this could have multiple factors, including, production or manufacturing capability, supplier stock levels or internal storage. For a service, this is likely to be heavily linked to staff levels and organisational capability, as well as potentially connected to any partnership arrangements or outsourced third-party contracts that may be in place. 

Three men are looking at data charts and graphs that pinned to a white board. Operating Model Transformation.

Staffing and Resources

As a great starting point, you can’t beat an organisational chart with a complimentary data table. You need key data points to get full value, like a unique identifier (preferably not the employee’s name), role type, team, salary, FTE. It’s simple data but provides a great organisational overview in its own right. One which you are going to want to play with the shape of as you model potential changes and you build your business case options. This data will also start to help you add more context and quality to any services or products and understand the relationship between your organisational areas. All of which will add value to your Analysis and Insights stage that comes next in a Operating Model Transformation or Service Design. 


Boring right? Wrong! It spans everything you do in a Discovery phase. Financial business targets always need to be in view and your budget is effectively another capacity measure. You may also influence future budgets with the outcome of this work – income generation or cost cutting projects in the Public Sector for example. Then of course, knowing the current in-year position is key to ensuring any future decisions are based on the most up to date information.  

Much like your staffing data, some variety of data points and the ability to align it to different parts of your organisation is important. Examples would be the ability to interrogate the data by month and ledger name or code, as well as having enough initial analysis to be able to understand this then by, area, team, budget holder etc. 


If you are contracting with any third parties to support your service or product delivery, you will effectively need to understand what you are getting from them in relation to the three areas above. For example:

  • Capacity and Demand – Does the contract have demand limits, such as product volume, customer numbers etc.? 
  • Resources – What support does the contract deliver? What’s the scope and limitations of delivery? How many people, hours etc? 
  • Finance – What’s the annual cost? What costs are fixed, what costs are variable? What period does it cover? Are there any ceilings or floors or any tipping points where when you get over a certain volume, then costs can change? 

In the event you don’t currently outsource any part of your service or product delivery, it’s still very likely to come up later as an option to support your Business Case.  

You can never have too much data and information as it’s usually always easier to clean and filter it than it is to go and gather more and combine it. 

Documents and contracts being reviewed by three people. Operating Model Transformation.

Build data relationships

As I’ve started to reference above, the real value in Discovery comes from the relationships you build between all the information you gather. The ease of creating these relationships will absolutely depend on how aligned your different pieces of data and information are, but if it’s not in good shape, it’s well worth the likely manual effort to give this exercise a boost in quality. 

Indeed, maintaining these data and information relationships and being able to draw on them to dynamically enhance your day-to-day business decision making, is one that can create a whole new stream of transformation activity. A good quality Discovery exercise can only serve to validate and support.  

Creating these links and relationships between your areas of Discovery, not only enhances your understanding at this stage, but as you move on to fully develop your Analysis and Insights on the particular service area or product, it then sets you up nicely to create and model Scenarios and Options – both of which I will cover in more detail next time. 

For help and guidance on your Operating Model Transformation or Service Design reach out to us.

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